- The Washington Times - Wednesday, August 20, 2003

Taiwanese officials and lawmakers are in an uproar over the cancellation earlier this week of a visit by Vice President Annette Lu to Boeing Co. facilities near Seattle, accusing the aerospace giant of snubbing a major customer under pressure from mainland China.

Taiwan’s transport minister has demanded that China Airlines, the state-controlled national carrier, lodge a formal protest with Boeing, and several key parliamentarians and leading newspapers have suggested canceling a massive $2 billion contract for 10 747-400 jumbo jets awarded to Boeing last year after heavy lobbying by U.S. officials.

“If you want to make money, you better make friends rather than make enemies,” Miss Lu told reporters in Seattle on Sunday at the start of a two-day visit on her return from a Latin American trip. “Shame on Boeing.”

Parris Chang, chairman of Taiwan’s Legislative Yuan, or parliament, and a member of Miss Lu’s delegation in Seattle, said he felt certain that pressure from Beijing forced the cancellation of the Boeing visit. He compared it to efforts by Arab countries in the past to blacklist companies doing business with Israel.

“We have to take this very seriously, because if China sees it can pressure a major company like Boeing, this will never stop,” Mr. Chang said in a telephone interview. “If they can take an inch, they will try to take a mile.”

China regards Taiwan as a breakaway province, and foreign travel by Taiwanese government officials often sparks major diplomatic battles between Taipei and Beijing.

The United States does not formally recognize Taiwan, also known as the Republic of China, but has allowed top officials to make private “transit stops.”

Mainland China is also a major customer for Boeing, which won a $2 billion contract from Beijing for 30 737s in October 2001 and is discussing even-larger deals in the world’s fastest-growing aviation market.

Bob Saling, spokesman for Boeing’s commercial-airplane subsidiary, said Miss Lu’s overall schedule was worked out between the U.S. and Taiwanese governments.

A “short, private visit” to a Boeing production plant had been on the early agenda, but was removed before the vice president’s arrival Monday.

“I don’t know the process that caused the change to happen,” Mr. Saling said.

He said Boeing executives suggested that Miss Lu instead tour Seattle’s port with a group of local business leaders. However, Boeing officials would not have been part of that group, he said.

Mr. Chang said the Taiwanese delegation was told the Boeing plant was too busy to accommodate a visit, but he said they learned public tours of the facility were still being held.

Under heavy pressure from both American and European leaders, China Airlines in December placed multibillion-dollar fleet orders with both Boeing and Airbus, a rival consortium controlled by several European governments. A government foundation headed by Taiwan’s Transport Ministry controls 71 percent of the carrier’s stock.

Lin Ling-san, the transport minister, accused Boeing of canceling the visit. He called the cancellation “outrageous” and “impolite,” stopping just short of demanding a cancellation or downgrading of the airplane-purchase deal.

A caucus of lawmakers from President Chen Shui-bian’s ruling Democratic Progressive Party (DPP) this week called for a review of the contract as well.

DPP legislative whip Chen Chi-mai said Boeing “apparently failed to abide by the rule that business is business concerning its handling” of Miss Lu’s visit.

China Airlines has already made an early down payment on the $2 billion Boeing deal, and authorities said canceling the contract now would mean hefty fees and penalties.

A spokesman for Taiwan’s Foreign Ministry also accused Boeing of canceling the visit and called the action “utterly unacceptable.”

President Chen’s office has said the incident should not be allowed to affect overall U.S.-Taiwanese relations.

The incident has also received wide coverage in Taiwan’s press.

The Taipei Times in an editorial yesterday wrote, “Without mutual trust, it will be inappropriate for the government to continue its business relations with Boeing.”

Mr. Saling said Boeing has had a profitable 35-year relationship with Taiwanese partners, both as a supplier and a customer.

“We take this misunderstanding very seriously,” he said. “We want to sort it out and move past it.”



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