AUSTR VISIT: TIFA, APEC, CHINESE GOODS, AND

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 004079

SIPDIS

SIPDIS

STATE PASS USTR
STATE FOR EAP/TC, EAP/MLS,
USTR FOR ALTBACH AND STRATFORD,USDOC FOR
4431/ITA/MAC/AP/OPB/TAIWAN/JDUTTON
GENEVA FOR USTR

E.O. 12958: DECL: 12/08/2031
TAGS: ECON ETRD EINV APECO TW
SUBJECT: AUSTR VISIT: TIFA, APEC, CHINESE GOODS, AND
CONFUSION ON GPA

REF: TAIPEI 3972

Classified By: AIT Econ Chief Daniel K. Moore for reasons 1.4 (B/D)


1. (C) Summary: Bureau of Foreign Trade (BOFT) Director
General Franco Huang told AIT Econ Chief that he would try to
provide AIT with "acceptable footnote language" for Taiwan's
WTO GPA accession. It is not clear whether this signifies
confusion or motion in Taiwan's position. His comments
contrast with Vice Premier Tsai Ing-wen's statement to AIT
DIR in late November (reftel) that no footnote language would
be acceptable to Taiwan. Huang and his staff told Econoffs
they were frustrated with various snubs their foreign
minister had to endure in Hanoi during APEC, but they were
very pleased with U.S. and other members' support for a Free
Trade Area of the Asia-Pacific (FTAAP). End summary.


2. (U) On December 5, AIT Econ Chief hosted a lunch for
BOFT Officials for a working-level readout on the Hanoi APEC
meetings and an update of key trade issues in advance of
Assistant USTR Tim Stratford and Deputy Assistant USTR Eric
Altbach's planned visit December 18-19. The lunch was
attended by BOFT's Director General Franco Huang, BOFT staff
responsible for WTO, APEC, and bilateral trade issues, as
well as the Chief of the Ministry of Foreign Affairs APEC
Task Force.

Preparing for AUSTR Visit
--------------

3. (C) DG Huang called the Government Procurement Agreement
(GPA) a difficult issue and noted that Chinese Taipei
(Taiwan's official name within APEC and WTO) could not accede
to the WTO GPA under the current proposed footnote language.
He promised, however, to "ask his boss's boss," i.e. Minister
for Economic Affairs Steve Chen, for footnote language
acceptable to Chinese Taipei. This contrasts sharply with
Vice Premier Tsai Ing-wen's statement to AIT DIR on November
24 that Taiwan is "not ready to consider" having any footnote
in its WTO GPA accession language.


4. (U) DG Huang stated BOFT and the Ministry of Economic
Affairs looked forward to discussing the TIFA agenda during
the Stratford/Altbach visit. He promised to urge the
relevant offices to move more quickly in drafting Taiwan's
comments on the model bilateral investment agreement that
USTR passed to BOFT in August. However, he also noted that
the model agreement provided was done under an FTA framework.

APEC
--------------

5. (C) Turning to the APEC meetings in Hanoi, BOFT
officials stated they were extremely pleased that the U.S.
and some other member economies supported the goal of the
FTAAP. Although the Leaders' Declaration was rather weak on
the issue, only calling for "further studies" on ways to
implement a FTAAP over the long term, Chinese Taipei took it
as a victory that the U.S. and several other developed member
economies offered support for this goal. Chinese Taipei was
also pleased that the leaders' statement labeled the Doha
Development Agenda as a top priority. DG Huang stated that
Ambassador Michalak was "our hero" at APEC for his tireless
promotion of these goals. Huang also noted Michalak
personally told him China's Vice Minister of Commerce should
not have spoken out in the APEC meeting to say that only
sovereign countries can be party to free trade agreements.
According to Huang, both Japanese and New Zealand reps echoed
Michalak's comments.


6. (U) Hanoi was not without frustrations, however. BOFT and
MOFA officials cited snubs that Taiwan's foreign minister had
to endure such as being seated away from the other foreign
ministers during a formal dinner, and having to wait to
depart the event until all of the other foreign ministers had
left. The MOFA official stated that Chinese Taipei had to
argue with the APEC Secretariat for complete inclusion of its
APEC accomplishments in a final statement. According to the
official, China objected that the report included six
accomplishments of Chinese Taipei and only listed three from
China. China wanted to cut the number of Chinese Taipei's
down to three as well. After protests and middle-of-the
night e-mails the original language was preserved. These
kinds of snubs were nothing new, Huang commented. Even with
these frustrations, Huang stated that Taiwan remained fully
committed to APEC and would continue to participate as

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actively as possible. He highlighted Taiwan's US$2 million
contribution to the e-APEC initiative as one example of
Chinese Taipei's commitment to APEC.

Taiwan Bans on PRC Goods
--------------

7. (C) During the WTO Trade Policy Review for Taiwan, held
in May this year, China protested Taiwan's import ban on over
2000 PRC products, stating such a position is contrary to WTO
standards. The American Chamber of Commerce in Taipei and
the European Chamber of Commerce Taipei (ECCT) regularly
complain to Taiwan officials about these same prohibitions,
also citing them as WTO-incompatible. DG Huang had told AIT
in August China and Taiwan might hold bilateral consultations
on this topic "after the summer" break and that he thought
this would be a very important step in cross-Strait economic
relations. DG Huang confirmed today that no such talks have
materialized to date, but indicated China and Taiwan continue
to discuss such talks and have tentatively arranged to hold
talks in January on Taiwan's bans on agricultural products.
However, Huang added that the composition and leaders for the
delegations have not yet been decided.


8. (C) Comment: AIT believes it unlikely that Taiwan has
shifted its position on the WTO GPA footnote issue since the
Director last spoke with the Vice Premier on November 24.
Nonetheless, AIT will follow up with BOFT to see if Minister
of Economic Affairs Steve Chen clears on acceptable footnote
language for Chinese Taipei's accession to the WTO GPA.
YOUNG