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07AITTAIPEI1512 2007-07-03 09:02:00 UNCLASSIFIED American Institute Taiwan, Taipei
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E.O. 12958: N/A

Summary: Taiwan's major Chinese-language dailies focused news
coverage July 3 on the island-wide Joint College Entrance
Examination held over the weekend, on the 2008 presidential
election, and on the KMT's ill-gotten party assets. Almost all
papers also carried news stories on their inside pages regarding the
American Institute in Taiwan celebrating the U.S. Independence Day
in Taipei on Monday. In terms of editorials and commentaries, an
editorial in the pro-independence, English-language "Taiwan News"
commented on U.S.-Taiwan relations, particularly in the wake of the
State Department's open opposition to Taiwan's proposed referendum
on the island's UN bid under the name "Taiwan." The article
concluded by saying "it would be better for leaders in both
Washington and Taipei to enhance direct dialogue both to build
understanding and avoid 'unpredictable' outcomes and to ensure
democratic Taiwan receives proper respect and fair treatment from
the U.S." End summary.

"Dialogue Key in U.S.-Taiwan Ties"

The pro-independence, English-language "Taiwan News" [circulation:
20,000] editorialized (7/3):

"Taiwan's ties with the United States have entered a critical stage
as upcoming presidential elections gear up, and both sides need to
intensify efforts to bridge differences and work out mutually
acceptable solutions through direct dialogue. ...
It is evident that Bush feels trapped by the political morass he
created through his ill-advised, hapless and fully
counter-productive invasion of Iraq and the inept pressure campaign
against nuclear-armed North Korea. Based on his questionable
assumption that Beijing is able and willing to help extract the U.S.
from these political quicksands, the frazzled lame-duck Republican
president now interprets any autonomous moves by Taiwan's DPP
administration to deepen our democracy as 'rocking the boat' and
'making trouble' for Washington.

"It is evident that the Bush administration has used public,
semi-public and private channels to warn the Chen administration and
perhaps even KMT presidential candidate Ma Ying-jeou not to cross
'the red line,' perhaps under the pain of a threat for Bush to
publicly express that the U.S. 'opposes Taiwan independence' instead
of its existing formulation of affirming that 'the U.S. does not
support Taiwan independence.' Such a threat would have weight only
against the DPP, since the KMT 'opposes Taiwan independence' and
could use the Republican administration's official statement to
support its advocacy of eventual unification with China, which of
course also intensely 'opposes' any form of 'Taiwan independence'
and would be immensely pleased with such an open declaration by

"The next most serious possible move by Bush would be an open
condemnation of President Chen for allegedly violating the latter's
'four noes' pledge and reiterating demands on Chen to 'display
leadership' by 'rejecting' the bottom-up referendum drive and thus
following Bush's own habitual trampling on domestic human and
democratic rights. Since Chen has already declared that he cannot
take such action and the DPP has reaffirmed its intention to
continue with the U.N. referendum campaign regardless of what either
president says, a remaining scenario would be for Washington to
downgrade transit treatment for Taiwan's national leaders. ...

"Another observation point will be how Washington handles the
transit request for President Chen himself, who is slated to visit
Central America in late August. Alternatively, the Bush
administration could recall American Institute in Taiwan Taipei
Director Steven Young [sic], cancel the diplomatic privileges of
Taiwan government officials while traveling in the U.S., suspend the
sales of defensive weapons to Taiwan (even though the KMT-controlled
Legislature has finally given initial approval) and intensify
cooperation with the PRC to further marginalize Taiwan.

"Certainly, the DPP government needs to consider such possibilities
and figure out effective solutions to deal with them, but we should
also realize that there is a floor as well as a ceiling in the house
of U.S. diplomacy. Naturally, the Bush administration should also
consider how attempting to suppress direct diplomacy in Taiwan while
appeasing the PRC's authoritarian Chinese Communist Party regime and
openly stacking the deck against the DPP and in favor of the KMT in
the coming polls will play at home at a time when the continuation
of the Republican administration is threatened by a resurgent
Democratic Party which now has control over both branches of

"Decisions by a right-wing Republican administration to show open
disrespect for Taiwan's democratic achievements or even betray the
values of American democracy by sacrificing one of Asia's genuine
democratic miracles to appease the PRC could well backfire in the
face of a Democratic Party-controlled Congress, many of whose senior
leaders, including U.S. House Speaker Nancy Pelosi, are known to be

friendly to 'democratic Taiwan.' We believe it would be better for
leaders in both Washington and Taipei to enhance direct dialogue
both to build understanding and avoid 'unpredictable' outcomes and
to ensure democratic Taiwan receives proper respect and fair
treatment from the U.S."