NAME GAME DELAYS CROSS-STRAIT TOURISM

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 002411 SIPDIS SIPDIS DEPT FOR EAP/TC E.O. 12958: DECL: 07/14/2016 TAGS: ECON PREL CH TW SUBJECT: NAME GAME DELAYS CROSS-STRAIT TOURISM Classified By: AIT Acting Deputy Director Charles E. Bennett, Reason 1. 4 d ¶1. (C) Summary: PRC objections to the name of the industry organization that will represent Taiwan continue to delay formal cross-Strait consultations on tourism. However, informal discussions through industry organizations continue with progress on some issues. The head of the Travel Agent Association of Taiwan, who leads the industry discussions, believes that the two sides will not be able to reach an agreement by October. He expressed disappointment with the Mainland Affairs Council's (MAC) handling of the issue. His concerns reflect those of other Taiwan business leaders, who have complained often that economic priorities are a secondary consideration in the Chen administration's cross-Strait policy. End summary. Nomenclature Problem Persists -------------- ¶2. (C) On July 13, Travel Agents Association of Taiwan (TAAT) Chairman Yao Ta-kuang told AIT/T that nomenclature problems continue to preclude formal cross-Strait consultations on further opening Taiwan to PRC tourists. Both sides have agreed to use industry-led discussions under the "Macau model" used to negotiate charter flights, but the PRC objected to discussions with TAAT because its Chinese name uses the "Republic of China" nomenclature (zhonghua minguo). The PRC formed a special organization called the Cross-Strait Travel Exchange Association to discuss tourism with Taiwan, and Taiwan has agreed to do the same with similar neutral nomenclature. According to Yao, MAC proposed to the PRC that it would call the new organization Taiwan Cross-Strait Tourism Association (taiwan haixia liangan guanguang xiehui). The PRC rejected the name because it included "Taiwan." Yao said that MAC had since proposed the name "Cross-Strait Tourism Association" but had not yet received a reply from the PRC. (Note: MAC Chairman Wu in a July 6 speech to the American Chamber of Commerce in Taipei said that the PRC had accepted the new name. However, when asked on July 14 about Wu's speech, a working level contact at MAC told AIT/T that in fact the PRC had not yet accepted the new name. End note.) Discussions Ongoing -------------- ¶3. (C) Yao pointed out that even as the two sides discuss the nomenclature issue, more informal discussions continue. Yao indicated that issues such as entry permits for PRC tourists and mechanisms to return visitors who overstay would not be problematic. He explained that because only well-to-do PRC nationals would be able to afford the trip to Taiwan, overstays would not be a major problem. Yao believes establishing a mechanism to resolve commercial disputes between travel agents will be more difficult to resolve and will require formal consultations. No Agreement Soon -------------- ¶4. (C) Despite continuing progress in informal discussions, Yao is pessimistic that the two sides will be able to reach an agreement in the near term. Yao acknowledged that October would be a particularly opportune time to further open tourism because of Chinese national holidays early in the month, but said an agreement would not be possible by then. Even though MAC's Wu indicated in April that Taiwan would consider unilateral opening to PRC tourists after six months and repeated the pledge in June, Yao believes that the PRC and Taiwan authorities will not agree to further opening without successful consultations. Yao would not say how soon he thought the two sides would be able to conclude consultations, but emphasized his view that October was not a possibility. Industry Association Frustrated with MAC -------------- ¶5. (C) Yao was clearly frustrated with MAC's handling of the tourism issues. He was particularly disappointed by its decision to propose the name "Taiwan Cross-Strait Tourism Association" for the new organization that would lead cross-Strait discussions. According to Yao, MAC knew the name would be rejected by the PRC but wasted time suggesting it anyway. He also showed econoff a background TAIPEI 00002411 002 OF 002 paper prepared by MAC with assistance from the Ministry of Economic Affairs for Taiwan's Sustainable Economic Development Conference titled "Globalization and Cross- Strait Economic and Trade Relations." He complained that it was wrong for MAC to take the lead in what is primarily an economic issue, arguing that the Ministry of Economic Affairs should draft this kind of document. Opening tourism would have an immediate positive effect on Taiwan's economy, benefiting a wide range of businesses throughout the island, Yao said, adding that he was discouraged the authorities hadn't moved more quickly to make it happen. Comment - Testing Business Community's Patience -------------- -- ¶6. (C) Yao's complaint that the Chen administration doesn't put economic priorities first when it comes to cross-Strait policy has long been a common lament among Taiwan's business community. The administration appears committed to making progress on the tourism initiative. However, prolonged discussions will delay the economic benefit for Taiwan's businesses and workers and provide fresh opportunities for the opposition to criticize the DPP administration. End comment. YOUNG