U.S. business group faults Bush on Taiwan F-16 delay

By Jim Wolf

WASHINGTON (Reuters) - A U.S. business group accused the Bush administration Friday of jeopardizing Taiwan's security by stalling a potential $4.9 billion deal for 66 advanced Lockheed Martin Corp F-16 fighter jets.

In recent weeks, the administration has heaped pressure on President Chen Shui-bian to abort a planned referendum on United Nations membership in the name of Taiwan.

As part of its drive to derail what it deems a provocation to Beijing, U.S. officials have told Taipei to delay formal efforts to acquire the F-16C/Ds, said Rupert Hammond-Chambers, president of the U.S.-Taiwan Business Council.

"This is unprecedented in any bilateral U.S. security relationship," Hammond-Chambers said in a telephone interview. "Depriving Taiwan of the arms it needs is inherently destabilizing."

The business council represents about 100 U.S. companies doing business with Taiwan, including top U.S. military contractors such as Lockheed Martin, Boeing and Raytheon Co.

Taiwan's legislature adopted a 2007 defense budget on June 15 that included funds to start buying new F-16s provided the United States released price and availability data -- the first step in the arms-sale process -- by Oct. 31.

Chen said Friday that funds earmarked for the F-16s -- which would supplement 150 F-16A/B models sold to Taiwan by Bush's father, the first President Bush, in 1992 -- would no longer be earmarked for this purchase if Washington failed to meet this deadline.

"Why are they holding back?," Chen asked in videoconference with reporters in New York, speaking through an interpreter. "Why are they waiting until the next president to issue the price quote?"