JAPAN POLICY AT A CROSSROADS

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 003742

SIPDIS

STATE PASS AIT/W

E.O. 12958: DECL: 10/10/2013
TAGS: PREL PGOV JA CH TW
SUBJECT: JAPAN POLICY AT A CROSSROADS

REF: 03 TAIPEI 3491

Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D)


1. (C) Summary: Taiwan officials say they are willing to be
patient with the glacial pace of development in formal
relations with Japan because they need time to resolve a deep
internal policy division over how to manage the relationship.
The policy debate is driven by sharply divergent assessments
over future trends in Sino-Japanese relations. Taiwan's
National Security Council (NSC) is looking to shape a policy
that seeks to prevent Taiwan from becoming a negative factor
in Sino-Japanese relations. They advocate discarding
Taiwan's traditional ties with the Japanese political right
in favor of interaction with younger, more pragmatic
policymakers in Tokyo. NSC moderates and academic observers
say they fear that association with Japan's nationalists will
not only fail to advance Taiwan-Japan relations, but may also
make Taiwan an even bigger target for Chinese nationalists
than it already is. On the other side of the debate is a
coalition of pro-independence fundamentalists close to former
President Lee Teng-hui and a group of foreign policy
hard-liners in the Executive Yuan (EY). Both groups seek to
align Taiwan with Tokyo in expectation of a future strategic
confrontation between Tokyo and Beijing. While the NSC has
the formal lead on Japan policy, President Chen Shui-bian has
made a series of public statements and personnel assignments
over the past six months that have favored the hard-liners.
End Summary.

All Quiet on the Northern Front
--------------


2. (C) Japan policy officials in Taipei say there have been
few significant developments in Taiwan-Japan relations since
Tokyo opened a low-level annual policy dialogue in 2002.
Taiwan MOFA Japan/Korea Section Chief Kuo Chung-shi said that
Taiwan was pleased with Japan's enhanced support for Taiwan's
observership at the World Health Assembly (WHA) last May,
opposition to lifting the EU arms embargo on China, and its
recent moves to grant Taiwan visitors visa-free entry to
attend the 2005 Aichi Expo. However, Kuo said that all of
these initiatives were the result of a Japanese assessment of
its own interests, rather than skillful diplomacy on Taiwan's
part. "Japan's health authorities had real concerns about
having its neighbor outside of the WHO, its military is
obviously concerned about PLA modernization," he added, "and
the visa initiative is largely the result of pressure from
Aichi officials, who expect Taiwanese to be a major source of
tourists for their expo."


3. (C) Kuo noted that the Japanese government, particularly
the Foreign Ministry, remains reluctant to deepen the
official relationship for fear of exacerbating already
strained relations with Beijing. To illustrate the static
state of the official relationship, Kuo noted that Japan
continues to demand that the Taiwan delegation to the annual
round of quasi-official policy exchanges started in 2002
(Reftel) be headed by an academic, with the rank of official
participants from Taiwan's MOFA and NSC kept below the
section chief level. Kuo added that there has been similarly
little progress on a bilateral Free Trade Agreement (FTA)
since the two sides agreed in 2002 to authorize private
sector think tanks to study the costs and benefits of the
initiative. "It has been studied to death," Kuo commented,
"but the Japanese keep coming up with excuses over why we
can't move any further." Reading between the lines, Kuo said
that Tokyo's clear message is "we will negotiate an FTA with
Taiwan only after we've completed FTA talks with everyone
else in Asia."

A New Policy for a New Japan...
--------------


4. (C) Taiwan NSC officials nonetheless say they are
comfortable with slow pace of the relationship, because they
see overall strategic dynamics working in Taipei's favor.
National Security Council (NSC) Senior Advisor for Asian
Affairs Lin Chen-wei told AIT that "Japan is increasingly
realistic about the challenges it faces in Asia -- protecting
sea lanes, encouraging the PRC's peaceful integration into
the region and the world economy, and energy security." Lin
added that these were exactly the same strategic issues
facing Taiwan. "Our task now is to demonstrate to Tokyo that
we can be a partner in meeting these challenges and are not
simply a source of further problems in Sino-Japanese
relations," Lin stated. One new area for contact is the
field of foreign aid, Lin asserted, both targeting China and
Southeast Asia. China's environmental and energy policies
have immediate implications for Taiwan and Japan, Lin
explained, and the two countries have complementary
technologies that could help the PRC. Lin added that Taiwan
also has comparative advantages in the field of commercial
development that could assist Japan maintain its economic
influence both in the PRC and among the overseas Chinese
business networks in Southeast Asia. Lin said that
anti-piracy and law enforcement cooperation, including
actions against North Korean illicit activities, also offers
potential for expanded contacts.


5. (C) Lin said that the other reason he is content with the
slow pace of development in the relationship is that it gives
the NSC more time to update Taipei's Japan policy
orientation. Lin asserted that before Tokyo and Taipei can
create a serious relationship, Taiwan will need to break the
bad habits of the past. "The traditional anti-Communist
basis underlying Taiwan-Japan relations is no longer relevant
today," he asserted. Lo Fu-chen, Chairman of the Association
of East Asian Affairs and recently departed Taiwan
representative in Tokyo, noted that the long-standing
division between pro-China and pro-Taiwan politicians in
Japan is fading into the past. "Up-and-coming politicians
like (Democratic Party of Japan's) Maehara Seiji and (LDP
Acting Secretary General) Abe Shinzo aren't pro-China or
pro-Taiwan," he stated, "they are pro-Japan and will do what
is best for their own country." Lo added that Taipei needed
to do more than simply bash the PRC if it wants to build a
sustainable relationship with Tokyo.

Or an Old Policy for an Old Japan
--------------


6. (C) Moderates like Lo and Lin acknowledge, however, that
many do not share the view that PRC-Taiwan-Japan relations
can become a positive sum game. Lin said that biggest
challenge he and his NSC colleagues face is the dominance of
Lee Teng-hui and his disciples over the Japan policy process.
"These guys are frozen in time," complained Lin, "the
Japanese they speak is 50 years out of date and their
contacts, mostly retired Maritime Self-Defense Forces
admirals, are considered right-wing extremists in Japan."
While NSC Secretary General Chiou I-jen chairs the
government's formal Japan policy inter-agency task force, Lee
associates hold key Japan policy posts. Taiwan's Tokyo
representative, Ko Sekai, and his deputy, Chen Hong-chi, are
long-time Lee associates (Note: Lo is as well, but people
close to both say they have had a major falling out over
Lee's drift to the fundamentalist extreme. End Note).
Officials at MOFA and the NSC say that TECRO Rep. Ko is often
pursuing his own agenda, greatly complicating management of
the relationship. East Asian Affairs Association's Lo told
AIT that "we are getting constant complaints from Tokyo over
Ko's public remarks on Taiwan sovereignty issues."


7. (C) Not all advocates of an anti-PRC Taiwan-Japan alliance
are elderly fundamentalists, a fact that raises questions
about the NSC's ability to pursue a more moderate line over
the medium term. Senior advisors to Premier Yu Shyi-kun form
another influential hard-line policy node on Japan relations.
On the eve of taking his current post in May, Executive Yuan
(EY) Secretary General Arthur Iap (Ye Guo-xing) complained to
AIT that, outward appearances notwithstanding, it was Tokyo
that was more "realistic" about the "China threat" than
Washington. "Japan doesn't voice their fears outwardly
because it does not serve their immediate interests," he
asserted, "but when speaking privately, it is clear they
don't harbor the sorts of illusions about prospects for
"China's peaceful rise" that many in Washington seem to
have." Another active player on Japan policy is the Taiwan
Think Tank, which provides much of the intellectual input
into Premier Yu's foreign policy team. The think tank
maintains frequent contacts with conservative Japanese
counterparts such as the Okazaki Institute and former Prime
Minister Nakasone Yasuhiro's Research Institute for Peace
Studies (RIPS).
President Sets the Direction(s)
--------------


8. (C) Strait Exchange Foundation (SEF) Deputy Secretary
General Yen Wan-ching, a member of the NSC's Japan policy
committee, told AIT he is pessimistic that the NSC can win
the bureaucratic battle against the hard-liners. "The
problem is the president," Yen continued, "he is the only one
who can enforce discipline on the policy debate." Yen
bemoaned, however, that "the only time the president even
thinks about Japan is when there is a Japanese visitor
sitting in front of him." When the president has spoken on
Japan policy, he has appeared to side with the hard-liners
rather than the moderates in his NSC. For example, during a
November 20 meeting with Japan Interchange Association
Chairman Reijiro Hattori, Chen boasted that Taiwan provided
the intelligence that helped Japan track the Chinese
submarine that recently strayed into Japanese waters. During
the same open press meeting, Chen drew a comparison between
calls (from Japanese conservatives) for Japan to "become a
normal country" with his own efforts to give Taiwan full
sovereignty.

Avoiding Bad Company
--------------


9. (C) Moderates inside government and outside analysts warn
that the future direction of Taipei's Japan policy could have
ramifications beyond the bilateral relationship if it is
mishandled. Soochow University Professor Liu Bih-rong warned
that Taiwan is running long-term risks by siding with Tokyo
on Sino-Japanese disputes over things like territory. "Most
Chinese can tolerate U.S.-Taiwan relations to a certain
extent," he assessed, "but they cannot accept the idea of
Taiwan helping Japan against China, it brings back bitter
memories." The NSC's Lin offered a similar assessment. "If
we aren't careful, we could become the target of the growing
anti-Japan sentiment among the Chinese public," he cautioned.
Lin added, "the one thing that motivates Chinese nationalism
more than the desire for unification is bitterness towards
Japan."

Comment: More About Beijing Than Tokyo
--------------


10. (C) Taipei's policy debate may have a greater impact on
its ties with Beijing than with Tokyo. The Japanese
government has made it clear over the past three years that
it sets the parameters and pace for the relationship, not
Taipei. However, Taiwan's public diplomacy, especially its
positions on disputes between the PRC and Japan, is unlikely
to escape notice by leaders and the public on the Mainland.
Taipei's repeated embrace of Japanese nationalists like Tokyo
Governor Ishihara Shintaro, support for Japan's position on
Sino-Japanese territorial disputes, and boasts about
Taiwan-Japan military cooperation could further exacerbate
cross-Strait tensions. These actions may also complicate
Japan's efforts to manage its relationship with Beijing,
making Tokyo less willing to take risks on issues like the EU
arms embargo and Taiwan's observership in the WHO.
PAAL