CITING DESIRE FOR FTA WITH CHINA, NEW ZEALAND

C O N F I D E N T I A L WELLINGTON 000747 SIPDIS NOFORN STATE FOR EAP/ANP - TRAMSEY, EAP/CM AND EAP/RSP/TC STATE PASS USTR - BWEISEL COMMERCE FOR 4530/ITA/MAC/AP/OSAO/GPAINE E.O. 12958: DECL: 09/01/2014 TAGS: ETRD ECON PREL NZ SUBJECT: CITING DESIRE FOR FTA WITH CHINA, NEW ZEALAND WON'T ISSUE VISA TO TAIWANESE OFFICIAL REF: A. WELLINGTON 322 ¶B. WELLINGTON 217 ¶C. WELLINGTON 173 (NOTAL) ¶D. 2003 WELLINGTON 1213 Classified by Acting DCM Timothy Zuniga-Brown. Reason: 1.5 (b) and (d). ¶1. (C) Summary: Taiwan's economic affairs minister withdrew his application for a visa to attend a business conference in Wellington after the New Zealand government made it clear that it would not approve his visit. Although the minister, Lin Yi-fu, had traveled to Wellington two years ago to attend the conference, the New Zealand government said that circumstances had changed and that it did not want to antagonize the People's Republic of China nor jeopardize its negotiations for a free-trade agreement with Beijing. In the absence of a free-trade deal with the United States, New Zealand is anxious to secure an agreement with China and is aiming to start talks early next year. End summary. ¶2. (U) Minister Lin Yi-fu had expected to lead a Taiwanese delegation to the 17th New Zealand-Taiwan Business Council conference, scheduled to be held September 6-7 in Wellington. The conference was canceled August 30 after an official from the New Zealand Ministry of Foreign Affairs and Trade (MFAT) told the Taipei Economic and Cultural Office in Auckland that a person of lower rank would more likely be issued a visa. Lin then withdrew his visa request. ¶3. (U) Explaining the government's decision, MFAT Deputy Secretary Michael Green told the Dominion Post: "Two years SIPDIS ago, we didn't have the level of tension between the Chinese and the Taiwanese that we've had for about the last year ... and secondly, we didn't have a major government priority the carrying forward of this trade negotiation with the Chinese." On May 28, New Zealand and China signed a trade and economic cooperation framework for a free-trade agreement (FTA). Both governments are working on a joint study on the costs and benefits of an agreement, which they expect to complete before the APEC meeting in November in Santiago. Negotiations then could begin in early 2005. ¶4. (U) Green pointed to China's displeasure over Singapore Prime Minister Lee Hsien Loong's visit to Taiwan as suggesting the strain that a Lin visit would place on New Zealand-Chinese relations. ¶4. (U) A joint meeting of the Australian and Taiwanese business councils also was canceled over the same issue. ¶5. (C/NO FORN) Several New Zealand officials have told the Embassy that their government considers a deal with China as a lever for securing an FTA with the United States (ref A and C). New Zealand also sees itself as in a race with Australia. An MFAT official said this week that the government's major fear is that, after being left out of the U.S.-Australia FTA, Australia -- but not New Zealand -- will reach an agreement with China. He described the New Zealand government's desire for a Chinese agreement as "obsessive." ¶6. (U) The business conference was canceled two days before a conference in Auckland on doing business in China, sponsored by the Auckland Chamber of Commerce and Asia 2000, a nonprofit organization partly financed by the government. China is New Zealand's fourth-largest trading partner and Taiwan, its eighth. Swindells