S E C R E T SECTION 01 OF 02 PANAMA 001695

SIPDIS

NOFORN

DEPARTMENT FOR WHA/CEN, EAP/CM AND EAP/TW
SOUTHCOM ALSO FOR POLAD

E.O. 12958: DECL: 08/09/2015
TAGS: PREL PGOV PINR PM TW POL CHIEF
SUBJECT: (C) PANAMA: DIALOGUE WITH TAIWAN ON PRC ACTIVITIES

REF: A. STATE 143649


B. PANAMA 0909

Classified By: CHARGE DE AFFAIRES LUIS ARREAGA FOR REASONS 1.4 (B) AND
(D).

Nature of U.S. Contacts with Local Taiwans
--------------

1. (C/NF) Embassy maintains excellent informal relations
with Taiwan diplomats in Panama and frequently engages in
productive dialogue with them. For instance, PolOffs have
met with former Taiwan ambassador David Hu and current Taiwan
ambassador Tomas Hu several times. (See Reftel B.) PolOffs
also often have met with Taiwan DCM and military attache MG
Antonio Yang, Counselor Jaime Chen, first secretary Cristobal
Taur, and second secretary Trinidad Chen. DAO enjoys
excellent access to MG Yang through the military attache
association.

Quality of the Dialogue
--------------

2. (C/NF) The quality and reliability of the information
gleaned from our meetings with the Taiwans has been
excellent. For example, Taiwan Ambassador Tomas Hu predicted
April 19 that the outcome of the April 28 Oval Office meeting
between President Bush and Panamanian President Torrijos
would determine whether Panama would change its diplomatic
relations in favor of China or maintain the status quo with
Taiwan for the remainder of Torrijos's five-year term that
began September 1, 2004. Hu's source was "a high Panamanian
official," higher than the vice minister level. The timing
of the purported change in relations was unclear, but
probably following a Canal referendum in 2006. Supposedly
Torrijos would raise the topic on April 28 and evaluate what
he heard from President Bush. Taiwan worried that a switch
in Panama's relations to the PRC could well affect Taiwan's
relations with the entire Central American and Caribbean
region. (POL Counselor reported the conversation by email to
WHA and EAP.)

Taiwans Were Correct
--------------

3. (C/NF) Amb. Hu's prediction was largely correct.
According to POL Counselor's sources within the GOP, Torrijos
concluded from his Oval Office China/Taiwan discussion that
the USG would not object to Panamanian recognition of China
and that recognition of China has been in President
Torrijos's mind as an active possibility since that time.
(Comment: POL Counselor's sources disagreed with Hu about
Panama's timing of a switch in diplomatic recognition from
Taiwan to China (PRC). If it should happen, Panama would
wait until after passage of the US-Panama FTA, so as not to
complicate matters with Congress, perhaps by the end of 2005,
they maintained. The sources also confirmed that Torrijos
claimed to have found "independent" funding to complete the
Colon-Panama highway, which Embassy concludes to mean that
China has offered to pay for the highway. Other sources have
suggested that China may agree to buy Panama's banana crop.
Panama's banana industry and its 20,000-30,000 banana workers
have been in a state of depression since the multinational
firm Chiquita left Panama several years ago. End comment.)


4. (S/NF) In another example, at a June 21 meeting with POL
Counselor, Taiwan Counselor said that a high GOP official had
told his Embassy that Panama and China are engaged in active
negotiations on China recognition with Panama's commercial
office chief in Beijing. Embassy has corroborated that
report independently.

Value of Seeking Enhanced Dialogue
--------------

5. (C/NF) Embassy expects to use our existing good relations
with Taiwan diplomats as Department suggests, concentrating
on core mutual interests, and averting sending unintended
signals to the Taiwans, as Department already has noted, that
our diplomacy will "tilt" toward Taiwan in the future at the
expense of China. On the other hand, every Embassy
interaction with the Taiwans sensitizes us to their agenda
and their vested interest in spreading alarm about the PRC.
As described above, the most useful information that the
Taiwans have given us is information which they have
volunteered. As the relationship between Taiwan and Panama
has deteriorated during the past 12 months, the Taiwans tend
to look more to U.S. diplomats for support and encouragement.
We question whether they have a lot to say to us that they
have not already said.

ARREAGA