TAIWAN REJECTS EU PROSPOSAL FOR GPA ACCESSION

C O N F I D E N T I A L TAIPEI 003095

SIPDIS

STATE FOR EAP/RSP/TC, STATE PASS USTR AND AIT/W, USTR FOR
WINELAND, FREEMAN AND WINTERS, USMISSION GENEVA FOR SHARK

E.O. 12958: DECL: 07/20/2015
TAGS: ECON ETRD TW
SUBJECT: TAIWAN REJECTS EU PROSPOSAL FOR GPA ACCESSION


Classified By: AIT Director Douglas Paal, Reason 1.4 b/d


1. (U) This is an action request. See Para 7.


2. (C) Summary: On July 19, AIT passed USTR-provided copies
of the latest EU proposed language designed to allow Chinese
Taipei's accession to the WTO Committee on Government
Procurement (GPA) to Taiwan's Bureau of Foreign Trade and to
the National Security Council's Connie Yang. After
consulting within the NSC, Yang told AIT she was advising the
Chinese Taipei office in Geneva to reject the new EU proposal
in favor of the November position. She thought this new
proposal was an unacceptable compromise of Taiwan's
sovereignty that came without a guarentee that the PRC
delegation would accept Chinese Taipei's membership in the
GPA Committee. End Summary.


3. (C) In November 2004, the EU proposed a two-step process
that would have GPA Committee members first adopt a
resolution that nomenclature used in the committee would "be
without predjudice to the position of WTO Members concerning
status in international law." The second decision would
refer to the first in allowing Chinese Taipei to accede to
the committee. After the Chinese refused to accept this
formulation, the EU revised their proposal to refer directly
to "nomenclature ... provided by a Delegation representing a
separate customs territory" and to "note that none of this
terminology has implications for sovereignty." In other
respects, the EU's two-step proposal remains the same.


4. (C) On July 19, AIT shared this new proposal with NSC
Senior Advisor Connie Yang (Yang Guang-hua). Although she
had not seen a copy of the proposal, she had been contacted
by the Chinese Taipei representative in Geneva and planned to
speak with him shortly. Her initial reaction was that the
new language, while possibly acceptable in the right
circumstances, was too large a concession to make without a
guarantee that the Chinese Delegation would accept Chinese
Taipei's accession to the GPA Committee. Copies of the new
EU proposal were also provided to the BOFT Multilateral
Affairs Office.


5. (C) After an internal meeting, Yang informed AIT that the
NSC had decided to advise Chinese Taipei's Geneva office that
it believed the EU-proposed "second decision" should not
refer back to the first decision since that now explicitly
mentions "a Delegation representing a separate customs
territory". In addition, the NSC advocates dropping the
reference to sovereignty and returning to the November 2004
language on "international law" in the first decision.


6. (C) Comment: Yang implied that she would be willing to
reconsider this position if the U.S. and EU were willing to
make strong efforts with the Chair of the GPA Committee to
overcome Chinese objections. She claims to see no advantage
to giving up a bargaining chip by agreeing to this new
proposal referencing sovereignty, especially so soon after
the "blue book incident," without getting a Chinese chip, in
the form of a commitment to allow Chinese Taipei's accession
to the GPA Committee, in return. Yang's instructions to
Geneva were not the product of careful consideration or
consultation, but rather were based on a hastily called
meeting on the afternoon of July 19. If the U.S. supports
this new EU proposal as a means to facilitate Chinese
Taipei's entry into the GPA, a concerted effort by the U.S.
and EU to explain the benefits of this new proposal to the
Chinese Taipei delegation in Geneva and to players in Taipei
could lead Taipei to reconsider its position. End Comment.


7. (C) Action request: Please advise whether the U.S. views
this EU proposal as a realistic means to facilitate Chinese
Taipei's entry into the GPA and if so, authorize AIT/T to
work with local EU Representatives on an approach to the
Taiwan government designed to encourage a reconsideration of
the EU proposal.
PAAL