DIRECTOR'S MEETING WITH TAIWAN'S AGRICULTURE CHAIRMAN

UNCLAS AIT TAIPEI 002612 SIPDIS SENSITIVE FAS FOR ITP/AAD/SHEIKH, MIRELES AND SMITH STATE FOR EAP/RSP/TC AND EB/TPP/ABT STATE PASS AIT/W STATE PASS USTR FOR ERIC ALTBACH SIPDIS E.O. 12958: N/A TAGS: EAGR ETRD TW SUBJECT: DIRECTOR'S MEETING WITH TAIWAN'S AGRICULTURE CHAIRMAN REF: (A) TAIPEI 01444 (B) TAIPEI 02542 (C) TAIPEI 2590 SENSITIVE BUT UNCLASSIFIED ¶1. (SBU) Summary. In his August 1 meeting with Taiwan's Council of Agriculture (COA) Chairman, Mr. Su Chia-chyuan, Director Young gained a commitment to finalize the documents establishing the Consultative Committee on Agriculture (CCA) by the end of October, reiterated the primacy of science-based import measures, and discussed the recent Sustainable Economic Development Conference. The CCA commitment suggests that the first meeting could be held at the end of 2006 or early 2007. End summary. ¶2. (SBU) On August 1, Director Young met with COA Chairman Su for the second time in four months. Building on themes established in his introductory call in April, (see Reftel A),Director Young noted the importance of our bilateral agricultural trade relationship and the need for further efforts to improve access for agricultural products. A primary purpose of the meeting was to push COA to begin serious discussion on establishing the Consultative Committee on Agriculture (CCA),as both sides agreed to do during the TIFA talks in late May. Over the past two months, COA has been conducting an internal review and assessment of documents presented during the TIFA that would formalize and establish a CCA. ¶3. (SBU) In response to the Director's query on the CCA, Chairman Su said that he supports the idea of a CCA, but he must first secure the concurrence of other agencies that will likely be involved, like Health and Economic Affairs. He also said that the benefits of a CCA must be mutual. If the focus is solely on U.S. interests, particularly with regard to market access, then it will be difficult for COA to agree. The Director assured Chairman Su that the intent of a CCA is to look at the broad range of bilateral agricultural issues in a way that benefits both sides. (Note: We do not anticipate any objections from Taiwan's Health or Economic ministries on the CCA. Indeed, we were told earlier that they had already provided their comments and endorsement to COA. End note.) ¶4. (SBU) With these assurances, Chairman Su directed his staff to complete their review and begin discussions with AIT on the ;Memorandum of Understanding and Terms of Reference (the documents presented during the TIFA talks). The process should be completed no later than the end of October. This schedule would allow the first CCA to be held at the end of 2006 or early in 2007. Director Young noted that USDA Under Secretary Penn will likely come to Taiwan to convene the first CCA. ¶5. (SBU) Director Young then noted that the next round of technical bilateral discussions on animal and plant health issues is planned for November. He reiterated the importance of basing animal and plant health and food safety related trade measures on scientific evidence and principles. He specifically noted our concern that BSE-related bans on certain animal-based feed products remain in place. COA's Director General of the Bureau of Animal and Plant Health and Quarantine responded by noting the seven years Taiwan has waited for a response to its request to export longans to the United States. ¶6. (SBU) Turning to the Sustainable Economic Development Conference (SEDC - See refs. B and C),Director Young asked to what extent Taiwan's agricultural economy figured into the proceedings. Chairman Su said that, except in the context of cross-straits trade, agriculture was not part of the discussion or outcome. With regard to cross-straits concerns, Chairman Su believes the PRC market for Taiwan's agricultural goods is illusory. Mainland consumers do not have the spending power of Japanese or U.S. consumers, Taiwan brand names and products are the victims of Chinese piracy, and the PRC is able to produce the same commodities, albeit with lower quality. Taiwan is also concerned about the competitive challenge it faces from China's agricultural products in third-country markets. ¶7. (SBU) Speaking more generally of the SEDC, Chairman Su noted the highly politicized nature of the conference. He specifically noted the objections of environmental groups and the Taiwan Solidarity Union (TSU) to the proceedings and the outcomes. The latter, he noted, oppose any opening to the PRC. Despite the party's small size, it is able to influence the decisions of the ruling party and events like the SEDC. ¶8. (SBU) Comment: It is noteworthy that agriculture was completely left off the SEDC agenda. While perhaps not a centerpiece issue, a sector of the economy that draws heavily on scarce resources (land, labor water),but contributes only 1.8 percent to overall GDP is calling out for attention. Achieving sustainable economic development in Taiwan will require a solution to this agricultural "problem". Despite agriculture's absence from the SEDC, our discussions with economic think tanks and policy analysts show that some thought is being given to encouraging an agricultural transition that will capitalize on Taiwan's technological, capital, and geographic advantages and allow Taiwan's agricultural sector to be more competitive in a global environment. End comment. YOUNG