SENATOR ROCKEFELLER'S TRIP TO TAIWAN

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 002989

SIPDIS

STATE PASS AIT/WASHINGTON

E.O. 12958: DECL: 06/02/2015
TAGS: ECON ETRD MARR OVIP PGOV PREL TW
SUBJECT: SENATOR ROCKEFELLER'S TRIP TO TAIWAN

Classified By: AIT Acting Director David Keegan, Reason 1.4 (b/d)


1. (C) Summary: During his May 28-30 visit to Taiwan, Senate
Finance and Intelligence Committee Member John D. Rockefeller
(D-WV) met with President Chen Shui-bian, Premier Frank
Hsieh, and Foreign Minister Mark Chen. In these meetings and
in his public speech to an economic think-tank, Senator
Rockefeller expressed his support for pursuing a Free Trade
Agreement (FTA) and stressed the importance of passing the
USD 18 billion Special Defense Procurement Budget. Senator
Rockefeller also encouraged pragmatic economic and political
policies to temper cross-Strait tensions and told Taiwan
officials that despite his own understanding of the value of
a well-contructed FTA, many Members of Congress and the
American public are growing wary of FTAs and that it will be
difficult to achieve an FTA agreement. End summary.

2. (C) In his May 30 meeting with Taiwan Premier Frank Hsieh,
Senator Rockefeller offered his support for moving on
Taiwan-US FTA talks, but advised Hsieh that such an agreement
would not be easy to achieve. Rockefeller pointed out that
the mood in the US Congress toward FTAs has soured because of
outsourcing and job losses in the manufacturing sector.
Senator Rockefeller added that a US-Taiwan FTA would not pass
quickly because there are many other FTAs that are currently
under consideration in Congress. Nevertheless, he maintained
that it is important to begin the FTA process because it will
encourage other nations to consider similar pacts with
Taiwan. Rockefeller also expressed to Hsieh his
disappointment over Taiwan's political in-fighting and the
current cross-Strait situation and encouraged quick approval
of the constitutional reforms that are under consideration in
the National Assembly (NA) to bring Taipei into a two party
system. He further urged Hsieh to adopt policies that would
contribute to stable cross-Strait relations and maintain the
status quo.


3. (C) Premier Hsieh thanked Rockefeller for engaging in FTA
negotiations, noting that he realizes the FTA approval
process will be difficult. Hsieh told the Senator that an
FTA is vital for Taiwan's future economic growth and agreed
with Rockefeller that other countries would follow suit if
Taiwan had an FTA with the US. He expressed his hope that an
FTA would be achieved within two years. Noting that the PRC
has been using its growing power to isolate Taiwan
economically, Hsieh pointed to Taiwan's efforts to sign FTAs
in Latin America that were derailed by Beijing. Hsieh agreed
with Senator Rockefeller that stable cross-Strait ties should
be Taiwan's main priority and suggested that once
constitutional reforms are passed by the NA, more progress
will be made on cross-Strait relations.


4. (C) Senator Rockefeller expanded his FTA and cross-Strait
discussions during his May 30 meeting with President Chen.
He told Chen that he supports moving forward on an FTA with
Taiwan, but that many Members of Congress and Americans are
suspicious of FTAs and are growing wary of rising trade and
budget deficits. The Senator said that he believes that it
is important to push forward on an FTA because such an
agreement with the US would remove some of the hesitancy of
other nations on associating with Taiwan because of PRC
pressure. Senator Rockefeller told to Chen that he would
work to pursue an FTA, but explained that success might not
be achieved right away. The Senator also expressed his
disappointment over Taiwan's declining defense budget and
said that most Americans erroneously believe that Taiwan has
a robust defense capability. He expressed his hope that
Taiwan can put aside political differences and pass the
Special Budget soon.


5. (C) President Chen told Senator Rockefeller that Taiwan is
being marginalized around the world and that the PRC is
blocking Taipei's efforts to integrate into the global
economy. Chen said that Beijing's efforts have a direct
impact on Taiwan's economic stability and Taipei's national
security capabilities. Noting that economic security is just
as important as defense security, he said that an FTA would
play a vital role in ensuring Taiwan's future economic
prosperity. Chen expressed his appreciation for
Rockefeller's support and said, while he understood an FTA
would not happen right away, Taipei and Washington should
begin FTA discussions soon because this would have tremendous
symbolic benefit for Taiwan. Without an FTA, Chen lamented,
Taiwan will not be able to meet future PRC challenges and its
economic and security posture will continue to weaken.


6. (C) In response to Senator Rockefeller's concern over
Taiwan's declining defense budget, President Chen insisted
his government is committed to the Special Budget. He
predicted that after July the timing and political
environment would be more suitable for the Legislative Yuan
(LY) to take action on the Special Budget. There were many
roadblocks over the past year which contributed to the
political deadlock in the LY, he explained, including the
presidential election, the LY elections, Pan-Blue trips to
the PRC, and now the July KMT party Chair election. After
July, however, opposition political maneuvering will decline,
Chen told the Senator, and the Special Budget will have a
serious chance of passage then.


7. (U) Senator Rockefeller has reviewed and cleared this
message.
KEEGAN