PLANS FOR PRC-SPONSORED CONFERENCE, ECONOMIC

C O N F I D E N T I A L SECTION 01 OF 03 SUVA 000055 SIPDIS SIPDIS FOR EAP/ANP AND EAP/CM STATE PASS USTR E.O. 12958: DECL: 02/08/2016 TAGS: PREL EAID ETRD EFIS ECIN CH FJ PP TW SUBJECT: PLANS FOR PRC-SPONSORED CONFERENCE, ECONOMIC COOPERATION DOCUMENT STIR CONTROVERSY IN THE PACIFIC REF: A. SUVA 021 ¶B. 05 PORT MORESBY 388 Classified By: Ambassador Larry Dinger Per 1.4 (B) and (D) ¶1. (C) Summary. The PRC has launched an ambitious, high profile outreach to the Pacific Island nations through a large-scale regional development conference and trade fair it is sponsoring in Fiji April 5-6. Premier Wen Jiabao will come to Fiji to open the conference, to which Ministers (and some heads of state) from all sixteen Pacific Island Forum (PIF) members are being invited through the auspices of the PIF Secretariat. In addition, the PRC hopes all Pacific states with which it has diplomatic relations will initial a draft "Guiding Framework" on China-Pacific Island economic cooperation prior to the conference. Four countries, Fiji, Tonga, Cook Islands, and Samoa, have already agreed to do so. According to its High Commissioner in Fiji, Papua New Guinea, the current chair of the PIF, has not initialed because it believes many aspects of the Framework should be handled via bilateral agreements. Papua New Guinea circulated an alternate, and far more general, text to PIF members in late January, but the PRC continues to press in favor of its original proposal. Because of concerns about the Framework and China/Taiwan sensibilities, the PIF Secretariat has decided not to co-host the regional SIPDIS development conference as originally planned. Instead, China and Fiji will co-host. In response to the PRC-sponsored conference, Taiwan is organizing a separate conference later this year in Palau. The regional conference and Wen's visit indicate that China is pressing to increase its role and influence in the Pacific. End Summary. A Very Ambitious Economic Cooperation Proposal -------------- - ¶2. (C) Embassy has obtained from the Australian High Commission in Suva copies of a PRC-drafted economic cooperation document the Pacific Island Forum (PIF) Secretariat circulated to PIF member countries in November, SIPDIS along with some proposed revisions drafted by the PIF. We have also obtained a counter-proposal circulated by PIF Chair Papua New Guinea in late January. Embassy will fax and e-mail these documents to EAP/ANP. The PRC-drafted "Guiding �0A;Framework" for China-Pacific Island cooperation is a very ambitious document. It calls for increased numbers of high-level visits and exchanges between China and the Pacific countries. It envisions enhanced cooperation between China and Pacific Island states in trade, investment, agriculture, fisheries, tourism, transportation, finance, infrastructure development, natural resources, and human resource development. The document suggests that China and the Pacific Island states should coordinate positions, wherever possible, in the WTO and other multilateral trade fora and "actively implement bilateral trade agreements." It calls for the signing of bilateral investment and taxation agreements. Finally, the draft document seeks to promote PRC-Pacific Island joint ventures in agriculture, fisheries, tourism, financial services, etc. The PRC has proposed that all PIF members with which it has diplomatic relations initial the draft Guiding Framework in conjunction with the Beijing-sponsored "China-Pacific Island Countries Economic Development and Cooperation Forum Ministerial Conference 2006" to be held in Nadi, Fiji April 5-6. Premier Wen Jiabao will open the conference as part of his state visit to Fiji (Ref A). Fiji, Tonga, Samoa, Cook Islands Initial Document -------------- -------------- ¶3. (C) Isikeli Mataitoga, CEO of the Fiji Ministry of Foreign Affairs, told the Ambassador and visiting EAP/ANP Director Krawitz February 14 that Fiji will co-host the Conference in Nadi, and will initial the PRC-drafted Guiding Framework text. The Australian High Commissioner in Fiji, Jennifer Rawson, reports that Fiji MFA declined to initial the document on its own authority and passed it to the Cabinet for a decision. The Papua New Guinea High Commissioner to Fiji, Peter Eafeare (protect),told us he was aware of three other countries that had initialed the text - SUVA 00000055 002 OF 003 Tonga, Samoa, and Cook Islands. Rawson and New Zealand High Commissioner Michael Green have informed us that Australia and New Zealand will not initial the text, and have not decided whether to attend the conference. Fiji Downplays "Guiding Framework," Says Wen Visit is Key -------------- -------------- ¶4. (C) Mataitoga insisted to us that initialing the framework document was no problem for Fiji, "since it's a nothing document" that gives leaders and ministers something to announce at the April conference. It has no legal standing and says little of real substance. Mataitoga suggested that follow-on steps China might take after the April conference are far more worrisome, such as trying to convince Pacific countries to use the Guiding Framework as a basis for developing a full-fledged economic cooperation agreement with Pacific states. Fiji MFA has already sent the PRC a proposal for a bilateral "Economic Partnership Agreement" it hopes will help forestall any notion that Fiji would be involved in a broad China-Pacific arrangement. (Comment: We disagree with the characterization of the Guiding Framework as a "nothing document." While non-binding, the document is quite ambitious in scope and will signal governments' intent to engage in cooperation activities with China. Moreover, as Mataitoga noted, the PRC may attempt to use the document as a starting point for negotiating future MOUs or agreements. End comment.) ¶5. (C) Joji Kotobalavu, CEO of the Fiji Prime Minister's Office, also expressed some skepticism about the "Guiding Framework," stating that the Pacific has been afflicted with "too many MOUs and too little follow up." Kotobalavu admitted the conference is causing "difficulties" for the Government of Fiji, and said the Ministry of Foreign Affairs "has been roped into" co-hosting the event in Nadi. He hopes the conference and the "Guiding Framework" will not merely reflect the competing interests of China and Taiwan in the Pacific, but will help generate real economic links between China and the region. Kotobalavu said the conference takes a backseat, in Fiji's view, to the visit of Premier Wen, which will underline Fiji's commitment to a one-China policy and reflects the reality that China is now a very big player in the Pacific. It can only be ignored at one's peril. PNG Seeks Alternatives to PRC-drafted MOU, But PRC Keeps the Pressure On -------------- ¶6. (C) PNG High Commissioner Eafeare told us February 9 and again on February 13 that he hopes a revised, and far more general, alternative "Framework Agreement" put forward by PNG as PIF Chair will replace the PRC-drafted document at the April conference. The PRC-drafted Guiding Framework, he said, covers many areas of cooperation that should be handled bilaterally, not in a regional forum. The Guiding Framework is also divisive, he said, in that it treats some PIF members (those who recognize the PRC) differently than others (those that recognize Taiwan). Eafeare said PIF members have requested that the PRC review the three documents now circulating - the original PRC text, the PRC text with PIF amendments, and the PNG text - and present its views for consideration by PIF members. To date, said Eafeare, the PRC has not responded. ¶7. (C) According to Eafeare, the PRC has stepped up its efforts to get PNG to initial the PRC text in recent weeks. The PRC also hopes Prime Minister Somare will attend the Nadi conference. The PRC has offered to pay airfare and all expenses for the PM, four PNG ministers, and other delegation members to attend. It is offering to pay for only one minister plus an additional invitee for most other participants. Eafeare said he has advised his government that "under no circumstances" should the PNG initial the text or have the PM accept the invitation to what is, after all, a ministerial-level conference. Eafeare noted, however, that PNG's Ambassador to Beijing has been lobbying Port Moresby to accept the Chinese invitation. (Comment: In light of Fiji's decision to initial the PRC-drafted text, we would expect the PRC to step up the pressure on PNG and other Pacific states SUVA 00000055 003 OF 003 with which Beijing has diplomatic relations to sign on. End Comment.) PIF Secretariat Hopes to Distance Itself From Conference and "Guiding Framework" -------------- ¶8. (C) Andie Fong Toy, Director of the Political, International and Legal Affairs Division of the PIF Secretariat, said the PRC-drafted Guiding Framework is SIPDIS problematic for the PIF. The draft is far more detailed and ambitious than a typical regional MOU, she said, and the document's calls for region-wide cooperation in agriculture and fisheries would be difficult for some countries to accept. The revised text circulated by PNG, on the other hand, assumes issues such as investment, taxation, tourism, and fisheries will be handled via bilateral agreements. Fong Toy said the PRC has told the Secretariat that since the Guiding Framework is non-binding and has no legal standing, it should not be viewed with concern by the Secretariat or by countries unwilling or ineligible to sign it. ¶9. (C) Like Eafeare, Fong Toy believes the PRC draft is an attempt by the PRC to divide PIF members, several of which have diplomatic relations with Taiwan. The PIF Secretariat decided not to co-host the regional development conference in April, she said, but did agree to send conference invitations to PIF members that do not have relations with the PRC (Kiribati, Nauru, Tuvalu, the Solomon Islands, Palau, and the Marshall Islands). She doubted if any of those countries would attend the conference, since Taiwan is sure to urge them not to. Fong Toy's comments echoed those of Greg Urwin, Secretary General of the PIF Secretariat, who told visiting SIPDIS Congressional Staffer Christopher Topik on January 25 the Secretariat hopes to distance itself from the regional SIPDIS conference because it has become too politicized. Taiwan Gets Into the Act - Plans its Own Regional Conference -------------- -------------- ¶10. (C) Ludwig Keke, the Nauru High Commissioner to Fiji, told the Ambassador and Krawitz that Taiwan was very unhappy with the PIF Secretariat for helping to facilitate the conference through circulating draft texts, sending out invitation circulars, etc. In Taiwan's view, he said, the PIF Secretariat should not be involved in any aspect of the conference. Mack Kaminaga, Ambassador of the Republic of Marshall Islands to Fiji, said he had been instructed by his government (which has diplomatic relations with Taiwan) "not to even think about" attending the conference. Australian High Commissioner Rawson noted that, predictably, Taiwan is now organizing its own conference, tentatively planned for Palau in July. Taiwan has asked the PIF Secretariat to "facilitate" its conference by sending invitations to all PIF members, just as the Secretariat is doing for the PRC-sponsored conference. Foreign Ministry CEO Mataitoga also mentioned the planned Taiwan-sponsored conference in Palau during his meeting with the Ambassador and Krawitz February 14. Comment: This Is Not Just About Taiwan -------------- ¶11. (C) China's gamesmanship with Taiwan is certainly one key aspect of the April conference and the planned visit by Premier Wen, but it forms only part of the picture. The conference will be significant both for the high-level and the breadth of expected Chinese representation, with hundreds of Chinese officials and businessmen expected to attend. China clearly believes it should play a prominent role in the Pacific region and is acting accordingly, through trade, aid, and high-level visits. End comment. ¶12. (U) This message was coordinated with, and cleared by Embassy Port Moresby. DINGER