CROSS-STRAIT CHARTER FLIGHT DISCUSSIONS PLANNED

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001158 SIPDIS SIPDIS STATE FOR EAP/TC E.O. 12958: DECL: 03/30/2016 TAGS: EAIR PREL ECON CH TW SUBJECT: CROSS-STRAIT CHARTER FLIGHT DISCUSSIONS PLANNED FOR APRIL REF: A. TAIPEI 418 ¶B. TAIPEI 1139 Classified By: AIT Deputy Director David J. Keegan, Reason 1.4 d Summary -------------- ¶1. (C) On March 28, Taipei Airline Association (TAA) Chairman Tony C.C. Fan told AIT/T that most technical issues required to expand cross-Strait charter flights are nearly resolved. At that time, Fan was waiting for a response from his counterpart in the PRC to a proposal that the two meet to resume discussions on cross-Strait passenger and cargo charter flights. On March 31, Fan informed us that his PRC counterpart had agreed to meet for informal discussions sometime between April 10 and 15. Taiwan has linked weekend passenger and cargo charter flights to progress in cross-Strait tourism discussions, which face sensitive nomenclature issues. In the meantime, Taiwan has proposed humanitarian and special one-time cargo charters as an interim step. Fan also offered his insights on the relatively small circle of Taiwan officials involved in decision making on charter flights. Mainland Affairs Council Chairman Joseph Wu told AIT/T March 30 (ref B) that a charter flight meeting would take place in July. Although Fan's information differs from Wu's, it is clear that the prospects are good for progress in the near term on charter flights. End summary. Mid-April Meeting -------------- ¶2. (C) TAA Chairman Tony C.C. Fan told AIT/T on March 28 there had been no significant progress on charter flight discussions since the Lunar New Year charters were announced in November 2005. Fan said that that he was waiting for a response from his counterpart in the PRC to a proposal that the two meet to resume discussions of cross- Strait weekend passenger and cargo charter flights. According to Fan, he called his PRC counterpart, Director Pu Zhaozhou of the Office of Taiwan, Hong Kong and Macau Affairs at the Civil Aviation Administration of China (CAAC),on March 23 to suggest that the two meet to resume discussions. The two have previously met informally and secretly in Macau. SIPDIS ¶3. Pu had been on an overseas trip and was scheduled to return to China on March 30. On March 31, Fan informed AIT/T that Pu had agreed to meet in mid-April. They had not yet confirmed a date, but planned to meet between April 10 and 15. Fan had previously speculated that such a response would be the first clear signal that the PRC is willing to move forward on cross-Strait charters since President Chen Shui-bian's announcement on February 27 that the National Unification Council and Guidelines had ceased to function and apply. Link to Tourism -------------- ¶4. (C) During the March 28 meeting, Fan explained that weekend passenger and cargo charter flights have only a few more outstanding technical issues to be resolved. The number of flights, routes, and cargo volumes have mostly been agreed, said Fan. He speculated that the two sides would only require two more unofficial meetings to settle outstanding issues. ¶5. (C) However, Fan believes that it will be impossible for the two sides to conclude a charter flight agreement before they reach agreement on further opening Taiwan to PRC tourists. He said that Taiwan is unwilling to permit weekend passenger charters without further opening of tourism because the PRC would receive the economic benefits of Taiwan residents taking short trips to the Mainland without any reciprocal gain for Taiwan. Fan argued that Taiwan genuinely wants to open to Mainland tourism but the PRC is reluctant to proceed. The PRC, he explained, has refused to begin discussions with the Taiwan industry TAIPEI 00001158 002 OF 002 organization identified by the Mainland Affairs Council (MAC) to lead negotiations on behalf of Taiwan because the Taiwan organization's Chinese name uses "the Republic of China" (zhonghua minguo). Fan said that technical issues on tourism could be resolved within months, but noted that further delays would drag out discussions into the campaign season for Taipei and Kaohsiung mayoral elections, making further progress unlikely. Interim Proposal - Humanitarian and One-Time Cargo Charters -------------- -------------- ¶6. (C) Because of the difficulties facing tourism discussions, Fan reported that he had proposed to Pu that the two sides discuss humanitarian charters and special one-time cargo charters as an interim step. Humanitarian charters would consist primarily of medical evacuations. As an example of a special one-time cargo charter, Fan cited the possibility that a semiconductor firm would charter a single cargo flight to move large pieces of manufacturing equipment from Taiwan to new facilities in the PRC. Not Many in the Loop -------------- ¶7. (C) Fan claimed that his communications with CAAC is the only semi-official channel between the PRC and Taiwan. According to Fan, decisions on charter flights are made by Presidents Chen Shui-bian and Hu Jintao, and only a few officials participate in the internal discussions on the issue. Fan told us that he gets all of his instructions from MAC Economics Division Director Fu Don-cheng, who is in turn instructed by MAC Chairman Joseph Wu. He said that even MAC Vice Chairman Michael Y.L. You is not fully informed of the most recent developments. Fan commented that beyond MAC and the Presidential Office only Chiou I- jen and a few others in the National Security Council are involved in decision making on cross-Strait charter flights. Ministry of Transportation and Communications officials learn about developments much later. Comment - Different Dates, Positive Prospects -------------- ¶8. (C) In ref B, MAC Chairman Joseph Wu told us that Taiwan and the PRC will hold discussions on charter flights and tourism in early July, which does not track with the information from Fan. One possible explanation is that Wu referred to a final and public round of discussions at which an agreement would be signed. Fan was clearly referring to another round of secret, informal discussions that would not immediately conclude an agreement. Other possibilities include either Fan or Wu intentionally provided inaccurate information or one of them is not fully briefed on cross-Strait charter flight discussions. Regardless of why the two provided different dates, it is clear that Taiwan contacts involved in the charter flight discussions believe that there will be progress in the coming months. End comment. YOUNG