US President George W. Bush's successor should move to beef up Taiwan's military and forge a bilateral free trade pact as part of a common agenda to mend souring ties, an expert study said Friday.
The report was prepared by a 11-member American group led by ex-State Department and Pentagon officials and comprising experts from the business, human rights and other fields.
The current "broken dialogue" between the United States and Taiwan "increases the likelihood that what is now a dangerous situation will develop into an even more dangerous crisis," the report warned.
Bush's successor at the White House in January 2009 should ask the State Department and Pentagon chiefs to announce a new "common agenda" with Taiwan to boost the island's military capability, including anti-submarine warfare as well as air and missile defense, the report said.
It also called for a "roadmap" to investment, tax and free trade agreements with Taiwan, among other recommendations.
US-Taiwan ties have been troubled in recent years, especially after the island's independence-minded president Chen Shui-bian began pushing for a controversial vote scheduled next month on whether the island should apply for UN membership under the name "Taiwan."
Chen's move has touched a raw nerve with China, which considers it a provocative step towards independence, and was denounced by the Bush administration.
While the United States is concerned over China's military buildup, it wants to be cosy with Beijing whose help it needs to end North Korea's nuclear weapons drive, as well as back sanctions against nuclear renegade Iran.
The United States is Taiwan's leading arms supplier and under US law has to help defend the island if attacked. China and Taiwan are separated by a strait.
Taiwan, under its official name the Republic of China, lost its UN seat to China in 1971 and is now only recognised diplomatically by 24 countries. The United States switched diplomatic recognition from Taipei to Beijing in 1979.
The US expert report said "Beijing has successfully pressured Washington to further its agenda of squeezing" Taiwan that led to the island responding "by increasing its emphasis on its sovereignty."
"Our belief is that the current environment is ultimately not to our interests and probably not sustainable," Randy Schriver, a former State Department official in charge of East Asian affairs, told AFP.
"The next administration — either Republican or Democratic — has a chance for a fresh start, and we hope we have given them some ideas," said Schriver, co-director of the study, which received inputs from campaigns of White House aspirants.
Democratic candidates Senators Hillary Clinton and Barack Obama and Republican Senator John McCain are the frontrunners in the presidential race.
With Taiwan on the frontline of China's military buildup, "I don't think it would be more of the same" under a new administration, said Daniel Blumenthal, a former senior Pentagon official and the study's co-director.
The report said a US-Taiwan common defense platform could break the "negative cycle" in the bilateral relationship, an example of which was Washington's unprecedented delay in responding to Taipei's request for F-16 fighter jets to bring about cross-strait air balance.
"No issue in the relationship is more important than a common defense agenda," the report said. "Taiwan remains a potential international flash point for a great power war."
