The  deal

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4.2.1 The deal  

In June 1978, Taiwanese officials together with a German businessman representing the German air force approached Verolme Electra, at that time a company belonging to the Rijn-Schelde-Verolme (RSV) shipbuilding group. The peculiar composition of this group was explained by the fact that Taiwan was interested in buying Lockheed Starfighters from Germany. It was mentioned in the press that a new generation of highly ranked civil servants in Taiwan aimed to diversify the heretofore exclusive reliance on American arms. Taiwan should, they argued, try to find new arms suppliers (Everts, 1985, p. 270). Direct deliveries from Germany to Taiwan were impossible, but they reasoned that an indirect transfer through a Dutch company would be an interesting possibility. These initial contacts lead to a series of negotiations between the military authorities of Taiwan and representatives of RSV.

At first, the negotiations came to a stop when the Dutch government was not willing to break with the standard policy that no arms should be delivered to a state that was not recognized by the Netherlands. For the next two years to come, several arms deals with Taiwan were all refused. But the Taiwanese government was not so easily deterred. Although the Dutch government refused to cooperate in the transfer of the German airplanes, the negotiations eventually led to a package of civilian and military orders, which would include the construction of two advanced submarines (p.269). The board of RSV filed an official request at the Dutch authorities that were responsible for the granting of export licenses and on November 29^th 1980 the government agreed to issue the license (p. 269). The lobby of RSV had already started to gain the support of parliament. It met generally with positive responses from those members of parliament

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－most of them active in the economic sector －who were privately approached. When the matter became public, however, it turned out that the deal with Taiwan was controversial not only within parliament, but that also the cabinet was split.

Considerable differences of opinion existed within the various ministries. First of all, the Dutch government agreed on the view of the government of the People's Republic of China that Taiwan was a province of the PRC. The Netherlands did not recognize the Taiwanese government. They knew that a delivery of submarines to Taiwan would not be taken kindly by the Chinese government in Beijing. On the other hand, the order would serve to be a tremendous help in supporting the ailing shipbuilding sector in the Netherlands. Especially the Ministry of Economic Affairs was convinced by this argument. Others, including the Ministry of Foreign Affairs however, argued that the prospects of growing economic relations with the PRC were equally important and would perhaps become even more important in the future. It would, therefore, not make sense to antagonize this partner. Furthermore －and according to Everts this was the main argument of the foreign affairs specialists - some feared the diplomatic and international/legal consequences of carrying out the order. When the issue was discussed in parliament, the government was asked by Member of Parliament Waltsman to reconsider the granting of the license:

The Member of Parliament Waltsman, heard the deliberation, and believing that the delivery of strategic goods to Taiwan should be considered contradictory to the Dutch foreign policy aimed at peace and security, and a sustainable relationship with the People's Republic of China, condemns the decision of the

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delivery of strategic goods to Taiwan, and asks the Government to bethink its decision to grant these licenses. (K.T.K. 1980-1981)

Also Van der Hek and Ter Beek issued similar concerns (K.T.K. 1980-1981. Nr.

16520.4) but these motions, among others, were narrowly defeated. At this time the Chinese reactions became known, strongly condemning the continuation of the arms deal.

The matter was discussed once more in parliament in January 1981, and once more a new resolution was submitted suggesting the government to reconsider its decision:

Member of parliament Brinkhorst considers that given the developments and facts that occurred since the granting of the export licenses to RSV for the delivery of two submarines to Taiwan, a reconsideration of this decision is preferable, and requests the Administration to come back from its decision to grant the license to RSV. (K.T.K. 1980-1981. Nr. 16520.12)

The developed that Brinkhorst was referring to was the threatening response of China. The resolution was defeated by a narrow margin of 76 to 74 votes because the government parties now closed ranks and helped to secure the survival of the cabinet (Everts, 1985, p. 270). The next month the government would give its final verdict on the matter, emphasizing the benefits of the deal, and concluding that the license could not be withdrawn at this stage:

Letter of the Prime Minister, Minister of General Affairs to the Chairman of the House of Representatives : The Government cannot, given the very worrisome conditions of employment in our country, withdraw the request of RSV. As the

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Minister of Economic Affairs has said previously, this order - that partially involves military equipment, but also for a large part civil supplies - is associated with a great deal of employment. (...) The Government cannot ignore the fact that in recent years the Dutch community has invested large amounts of money in the shipbuilding industry. (...) The Government is not free to withdraw itself from its commitment. (...) In this case is not possible for the Government to meet the requirements of the Chamber. The Government has to keep its pledged word. (...) The Government wants to emphasize that the intended transaction (...) does not include any form of recognition of the current regime in Taipei. (K.T.K. 1980-1981. Nr. 16520.14)

So in the end the contribution to the employment carried the most weight, and the Ministry of Economic Affairs and the Taiwan-lobby won the argument. During the debates Prime Minister Van Agt had made clear that his government considered the matter to be a one-time affair, which made it politically very difficult to agree to any potential similar orders in the future. Nevertheless, China reacted immediately.

4.2.2 The reaction  

As the foreign affairs specialists already had anticipated, the delivery of the submarines to the 'rogue' state on Taiwan was considered to be completely unacceptable by the PRC. Primarily because of the One-China policy that the Netherlands and the People's Republic of China agreed upon in 1972, but also because Van Agt and Van der Klaauw didn't even mention the deal to the Chinese leaders during their visit. Several