Identifier
Created
Classification
Origin
06TAIPEI1697
2006-05-18 07:49:00
CONFIDENTIAL
American Institute Taiwan, Taipei
Cable title:  

MOTC MIN ON DIRECT LINKS, PROCUREMENT, AND HIGH-

Tags:  EAIR ELTN ETRD ECON CH TW 
pdf how-to read a cable
VZCZCXRO9053
RR RUEHCN RUEHGH
DE RUEHIN #1697/01 1380749
ZNY CCCCC ZZH
R 180749Z MAY 06
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 0224
INFO RUEHBJ/AMEMBASSY BEIJING 5216
RUEHUL/AMEMBASSY SEOUL 7838
RUEHKO/AMEMBASSY TOKYO 7718
RUEHCN/AMCONSUL CHENGDU 1262
RUEHGZ/AMCONSUL GUANGZHOU 9329
RUEHHK/AMCONSUL HONG KONG 6423
RUEHGH/AMCONSUL SHANGHAI 0144
RUEHSH/AMCONSUL SHENYANG 5226
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RULSDMK/DEPT OF TRANSPORTATION WASHDC
RHEFDIA/DIA WASHINGTON DC
C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001697 

SIPDIS

SIPDIS

DEPT FOR EAP/TC

E.O. 12958: DECL: 05/15/2016
TAGS: EAIR ELTN ETRD ECON CH TW
SUBJECT: MOTC MIN ON DIRECT LINKS, PROCUREMENT, AND HIGH-
SPEED RAIL


Classified By: AIT Director Stephen M. Young, Reason 1.4 d

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001697

SIPDIS

SIPDIS

DEPT FOR EAP/TC

E.O. 12958: DECL: 05/15/2016
TAGS: EAIR ELTN ETRD ECON CH TW
SUBJECT: MOTC MIN ON DIRECT LINKS, PROCUREMENT, AND HIGH-
SPEED RAIL


Classified By: AIT Director Stephen M. Young, Reason 1.4 d


1. (C) Summary: In a May 12 conversation with the Director,
Minister of Transportation and Communications Kuo Yao-chi
described some of the obstacles standing in the way of
direct air links with the Mainland. She expressed Taiwan
interest in acceding to the Government Procurement
Agreement in the WTO or tying a U.S.-Taiwan bilateral
government procurement agreement to a free trade agreement.
Kuo indicated that the high-speed rail project would begin
operations on time and should be able to overcome its
financial problems. End summary.


2. (U) AIT Director Stephen Young met with Minister of
Transportation and Communications Kuo Yao-chi on May 12.
Kuo assumed her current position in January 2006.
Previously, she headed the Public Construction Commission
for four years.

Direct Links - Taiwan Wants Cargo Charters
--------------


3. (C) The Director asked when Taiwan would expand the
"three links" with the Mainland (transportation, commercial
and postal and communications links). Kuo said that there
was a structure in place to discuss charter flights but
that there had been no breakthrough. Taiwan wants to
proceed with cargo charter flights first. Kuo noted that
one issue of contention was the PRC's preferred destination
points for cargo charter flights. In addition, the PRC
refuses to allow charter flights to use routes that would
pass through the airspace of another country such as Japan
or Korea. Kuo also explained Taiwan's interest in linking
passenger charter flights to further progress on opening up
Taiwan to PRC tourists. On tourism, Taiwan is waiting for
information about the PRC industry organization that will
lead informal discussions so that Taiwan can form a similar
organization.


4. (C) The Director told Kuo that the United States
supports direct air links because they would bring
increased contact between the peoples of Taiwan and the
Mainland. However, the United States also hopes that U.S.
and other international businessmen and tourists will be
able to use the flights. In addition, the Director
expressed U.S. interest in foreign airlines being allowed
to participate in cross-Strait routes.

Government Procurement - Taiwan Wants to Sign in WTO
-------------- --------------


5. (C) Noting preparations for U.S.-Taiwan Trade and
Investment Framework Agreement (TIFA) talks later in the
month, the Director asked Kuo that Taiwan consider opening
up its government procurement process to let more foreign
companies compete. Kuo said that Taiwan wanted to sign the
WTO Government Procurement Agreement (GPA) but the PRC had
blocked Taiwan participation. Taiwan had approved all of
the content of the agreement and still wants to sign it.
She reported that major agencies had already been
instructed to further open their procurement process. She
expressed frustration because the PRC has no legitimate
reason to object to Taiwan's participation in the GPA.


6. (C) The Director commented that the PRC doesn't seem to
feel it needs any other reason than opposing Taiwan. He
suggested that if Taiwan entered into bilateral government
procurement agreements with other WTO members, it would
help build support within the organization for Taiwan
participation in the multilateral GPA. Kuo also said that
tying a bilateral agreement to a free trade agreement would
help create support in Taiwan.

High-Speed Rail - "Should Be OK"
--------------


7. (C) When asked about the status of Taiwan's high-speed

TAIPEI 00001697 002 OF 002


rail project, Kuo said that it should be able to begin
service on time in October. She said that the project's
financial problems "should be OK." Kuo reported that the
major engineering portion of the project was nearly done
and described in some detail the stations that were still
not completed. (Comment: Kuo's well-practiced and detailed
response suggests that she is watching the project closely
and reflects the Chen administration's determination not to
let the project fail. End comment.)
YOUNG