Israel lobbying for Taiwan submarine buy

Thursday, September 30, 2004

Israel has been quietly lobbying for the launch of a U.S. project to provide advanced conventional submarines to Taiwan.

The reason: a Taiwan buy could launch a conventional submarine production line in the United States that would be used by Israel to procure additional subs.

"Israel really wants advanced conventional submarines but can't afford to buy them on the open market," a U.S. official said. "With a production line in the United States, Israel could purchase these vessels with U.S. military aid."

The official said he expected pro-Israel lobbyists in Congress to help Taiwan in efforts to win approval for the U.S. sale of advanced conventional submarines, Middle East Newsline reported. After years of delay, Taiwan has requested eight Type-209 submarines as part of a proposed purchase of $18 billion in U.S. platforms and weaponry. Taiwan's legislature was expected to vote on the procurement project in October.

In 2001, the Bush administration agreed to sell Taiwan eight diesel-electric submarines, 12 P-3C Orion anti-surface-warfare aircraft and four Kidd-class destroyers. But Tapei, amid heavy domestic opposition, failed to negotiate contracts with U.S. defense firms for the air and naval platforms.

In the meantime, Taiwan's request has stirred debate in Washington. The request has been opposed by the State Department, but supported by congressional leaders.

The U.S. Navy has also opposed the sale. Officials said the navy does not want the establishment of a U.S. electric-diesel submarine production line that could harm funding for nuclear submarine production. They said the Taiwanese request would be decided after the U.S. elections in November.

Israel, which has been struggling in efforts to procure additional submarines, has been closely following Taiwan's request. Officials said Washington's approval could lead to the establishment of the first diesel submarine production line in the United States since the 1960s.

In contrast, Germany has been alarmed over the prospect that the United States would launch a diesel submarine line. Germany has been the leading producer of diesel submarines and Israel has been negotiating with Howaldtswerke-Deutsche Werft, or HDW, for two Dolphin-class submarines. HDW has also begun producing and exporting the more advanced Type-212 submarine.

Over the last year, industry sources said, HDW has reduced its price of the Dolphin for Israel from $610 million to $375 million per submarine. Officials said this has reflected slumping HDW sales as well as a decision to continue production in Germany.

Israel has already examined the prospect of using U.S. Foreign Military Financing for the Dolphin sale, officials said. Under the FMF, Israel could seek an exception of the requirement that about half of the military platform undergo production in the United States. The exception could be applied if such a platform or its components were not available in the United States.

"Congress could promote the exception for Israel if the president decides on it," an official said.

In an effort to overcome U.S. Navy opposition, the administration was examining the option of purchasing Type-209 submarines for Taiwan from Argentina. The South American country has submarine production capability and officials said U.S. defense firms could order the hull in Argentina and later outfit the platform with electronic and combat suites in the United States.

Copyright 2004 East West Services, Inc.

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