PRESIDENTIAL CANDIDATE FRANK HSIEH ON BILATERAL

C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 002191 SIPDIS SIPDIS E.O. 12958: DECL: 09/26/2017 TAGS: PGOV PREL TW SUBJECT: PRESIDENTIAL CANDIDATE FRANK HSIEH ON BILATERAL RELATIONS AND DPP INFIGHTING OVER PARTY LINE REF: TAIPEI 2178 Classified By: AIT Director Stephen M. Young, Reasons: 1.4 (b/d) ¶1. (C) Summary: The Director briefed DPP presidential candidate Frank Hsieh September 25 on his recent consultations in Washington, stressing the importance that Taiwan avoid unnecessary, election-driven moves that could provoke cross-Strait tensions. Hsieh said that while he supports the DPP's UN referendum, he will resist Deep Green efforts to attach independence-related initiatives to his campaign agenda and, if elected, he will work to restore mutual confidence in U.S.-Taiwan relations. Hsieh stressed his opposition to proposals by outgoing DPP Chairman Yu Shyi-kun and the Deep Green to add more explicit independence language to the draft "Normal Country Resolution" that the DPP will take up at its party congress on September 30. Hsieh predicted President Chen will replace Yu as party chairman when Yu steps down following his corruption indictment (reftel) and he added that this change will help unify the party and improve coordination with the pan-Green Taiwan Solidarity Union (TSU). According to Hsieh's internal polling, he now trails KMT candidate Ma Ying-jeou by about ten percent, a gap which has narrowed over the past several months. Hsieh also discussed his "pragmatic" cross-Strait policy and the recent increase in anti-Americanism in Taiwan. End Summary. ¶2. (C) On September 25, the Director briefed DPP presidential candidate Frank Hsieh on his recent consultations in Washington, and the two also discussed Taiwan's domestic politics. Hsieh was accompanied by his international spokesperson, legislator Bikhim Hsiao. The Director stressed U.S. concerns regarding the DPP's UN referendum and over the possibility that President Chen might launch further independence-related initiatives that could generate cross-Strait tensions. There is great frustration in Washington that President Chen, DPP Chairman Yu Shyi-kun, and the Deep Green Chen appear to be ignoring U.S. interests as they pursue election or independence-related agendas. The Director also emphasized the importance for DPP leaders to avoid additional damaging moves during the election campaign that could complicate future efforts to repair U.S.-Taiwan relations after the presidential election next March. Deep Green Efforts to Box in Hsieh -------------- ¶3. (C) Hsieh said he understood the U.S. attitude. The reason the U.S. opposed the DPP's UN referendum was to preserve peace and stability, and this was good for Taiwan. However, Hsieh noted, he had never promised to stop the DPP's UN referendum. The KMT is also promoting its own UN referendum, and rising Taiwan identity means that these two referenda cannot be stopped. If elected, Hsieh promised to do his best to restore mutual confidence between Taiwan and the U.S. Hsieh stressed the importance of avoiding the "next step," such as the Deep Green proposal for a referendum on Taiwan independence. Hsieh noted that he does not support an independence referendum and had said in the U.S. that such a move was "unnecessary." The Deep Green, dissatisfied with his position, were now trying to box him in with their radical version of the "Normal Country Resolution" (NCR), Hsieh added. The DPP's Normal Country Resolution -------------- ¶4. (C) The DPP's Central Executive Committee (CEC) passed an ambiguous version of the NCR in August, which DPP Chairman Yu Shyi-kun did not oppose at that time, Hsieh noted. Subsequently, the Deep Green complained, and Yu, who is now promoting the Deep Green version of the NCR, has won endorsement from 100-200 delegates to the party congress, which will be held on September 30 and is expected to take up the resolution. Hsieh said his team was lobbying party delegates to oppose Yu's move, which he believed would fail. Hsieh added that he would be asking President Chen later the TAIPEI 00002191 002 OF 004 same day for help in blocking the Deep Green NCR. ¶5. (C) The Director noted that despite Yu Shyi-kun's poor third-place showing in the party's presidential primary last May, he seemed to be acting as if he, rather than candidate Hsieh, had the mandate to set the campaign agenda. Yu publicly supports him, Hsieh responded, but Yu argues that Hsieh needs the Deep Green NCR to win the presidential election. Yu's theory is that the DPP must first stir up the enthusiasm of the Deep Green and this enthusiasm will then spread and swing moderate voters toward the DPP. Hsieh added that there are rumors the Deep Green is threatening to field a third candidate in the presidential election if Hsieh does not support the Deep Green NCR. Hsieh said he does not want an open fight with the Deep Green because he will need their votes (about 5-10 percent of the electorate) to win, but he cannot accept their NCR language. Hsieh said he might suggest to President Chen that the party should hold a CEC meeting on Thursday. (Note: A CEC meeting, which might thrash out the NCR issue, is also required to take up Yu's promised resignation. End Note.) ¶6. (C) According to Hsieh, President Chen agrees with his view that the DPP's energy should be focused entirely on the party's referenda without adding the Deep Green NCR. In addition to its UN referendum, the DPP is also promoting a referendum on KMT party assets, but needed attention to this has dropped off because there are too many items on the DPP agenda. Hsieh told President Chen that he does not want to bring new Deep Green issues such as a new constitution or "name rectification" into his campaign. Consideration of Defensive Referendum on UN -------------- ¶7. (C) Hsieh noted that the DPP has not decided its strategy on handling the UN referenda, for example, whether to place the DPP and KMT referenda on a single or separate ballots. (Note: Having the two referenda on a single ballot would increase the likelihood both would meet the referendum threshold -- half of eligible voters must participate -- because the simple act of taking a ballot constitutes participation. End Note.) Legally, the DPP and KMT referenda cannot be combined, Hsieh explained, because it is virtually impossible to change the wording of a proposed referendum. However, President Chen is considering the possibility of proposing a defensive referendum on the UN. (Note: This would permit a joint DPP-KMT UN referendum if the two parties could agree on wording and to withdraw their separate referenda on the issue. End Note.) ¶8. (C) The Director pointed out that holding a defensive referendum would raise U.S. concerns, because the precondition for a defensive referendum is a security threat in the Taiwan Strait. The U.S. wants to maintain neutrality in Taiwan politics, the Director stressed. However, further steps by President Chen could lead the U.S. to make public comments perceived by Taiwan voters as detrimental to the DPP, even though that would not be our goal. Hsieh urged the U.S. to avoid involvement in Taiwan's emotional election politics, which only would serve to stir up the Deep Green. The U.S. is very important to Taiwan, Hsieh observed. U.S. opposition to the UN referendum should be from a higher security standpoint, he suggested. The U.S. has its own domestic politics and international considerations, the Director responded; Taiwan must avoid taking unnecessary steps that could cause cross-Strait tensions. ¶9. (C) Referring to Yu Shyi-kun's impending resignation, Hsieh said President Chen's expected resumption of his position as DPP chairman will have a positive effect on party unity. Chen will select someone close to him as DPP secretary general, who will do the work of managing the SIPDIS party. Hsieh added that he expected the new secretary general to be someone who will respect him and help his presidential campaign. Hsieh acknowledged that President Chen has a sense of mission and desire to accomplish something. However, the President's priority is for Hsieh to win the election so that he can protect Chen and family from TAIPEI 00002191 003 OF 004 legal problems and also maintain his influence. If elected, Hsieh said, as earlier announced publicly, he would pardon all (for special allowance offenses),including KMT candidate Ma Ying-jeou. Anti-Americanism -------------- ¶10. (C) According to polling, U.S. opposition to Taiwan's UN initiatives has reduced the favorable impression of the U.S. held by Taiwan's people, Hsieh observed. Hsieh argued that this played into the hands of Beijing, which is pressing the U.S. on the UN issue in hopes of turning the people of Taiwan against the U.S. Beijing believes time is on its side and therefore will not use force. However, it sees political divisions within Taiwan as helping its cause. Taiwan's people are reasonable, Hsieh said, but some think the U.S. and China have a "tacit understanding" about Taiwan. The U.S. might want to clarify that it views Taiwan's status as undetermined, a position other countries, though not China, might accept, he suggested. The Director stressed that the U.S. does not coordinate or have any "tacit understanding" with China regarding Taiwan. He advised Hsieh to drop the idea of seeking greater clarity in U.S. policy, pointing out that the result might well be something Taiwan would regret. ¶11. (C) On the anti-Americanism theme, Hsieh also asserted that the KMT has been stirring up Taiwan's pig farmers over the ractopamine issue as the farmers would like to see a reduction or halt in pork imports from the U.S. As a consequence of the government's working with the U.S. to resolve this issue, Hsieh claimed, he has lost many votes from pig farmers over a matter that, he argued, benefits only a few pork importers. LY Elections -------------- ¶12. (C) The DPP needs to coordinate with the pan-Green Taiwan Solidarity Union (TSU) on fielding legislative candidates, Hsieh observed. Yu, too busy, has not dealt well with this issue. Hsieh predicted that President Chen will quickly resolve this issue and achieve pan-Green unity if he becomes DPP chairman. The DPP's goal in the Legislative Yuan (LY) elections is to win 50 of the 113 total seats, Hsieh said, adding that the KMT will probably win 53-55 seats, the TSU 2-3 seats, with the remainder going to members of the SIPDIS Non-Partisan Solidarity Union (NPSU) and other independents. If the DPP wins 50 LY seats and he is elected president, Hsieh said, he would need to attract 10 additional members from the NPSU or KMT to form a majority in the legislature. This would not be overly difficult because the KMT will be divided if Ma loses the presidential election, Hsieh predicted. Polling -------------- ¶13. (C) According to his own recent internal polling, Hsieh said, the gap now between the Ma-Siew and Hsieh-Su tickets ranges from about 8 - 11 percent. Currently, the Ma ticket enjoys 45 percent support, compared to 35-36 percent for the Hsieh ticket. Ma enjoyed a 20-30 percent lead last May and earlier, his support has progressively shrunk from 55 to 45 percent. Hsieh also noted that adding Su Tseng-chang to his ticket has been a plus. The gap between Ma and Hsieh alone is 13 percent, while the gap between Ma-Siew and Hsieh-Su is 10 percent. Ma Ying-jeou -------------- ¶14. (C) Ma's home-stay program has temporarily boosted his support in central and southern Taiwan, Hsieh acknowledged. However, Hsieh teams have canvassed the same areas after Ma's departure, and the KMT candidate's gains have proven to be short-term only. Ma has made good use of his blog, Hsieh observed, which includes films of Ma working in the countryside and hugging young and old people. Ma has TAIPEI 00002191 004 OF 004 traditionally appealed to women and youth, but the DPP is registering gains in these groups, Hsieh said, adding that the youth favor the DPP's UN campaign. The DPP's biggest weakness is in the 35-45 age cohort. Cross-Strait Relations -------------- ¶15. (C) Hsieh noted that he had come out in favor of some cross-Strait policies supported by Ma, including direct air links. This had undercut the political benefit to Ma, who had gone further with his common market proposal, which Hsieh opposed. The Deep Green, Hsieh continued, opposed his pragmatic cross-Strait policy, but nonetheless, he would stick to his long-term consistent policy. Comment -------------- ¶16. (C) The Deep Green, with Yu's assistance, have been trying to force Hsieh to take a much harder line on issues including cross-Strait policy and Taiwan independence. After the conclusion of the party congress this Sunday and Yu's stepping down, the Hsieh team will have a freer hand to set their own pragmatic campaign agenda, which will be aimed largely at winning middle, swing voters. The impetuous President Chen is still a wild card, however, as he is reluctant to accept lame duck status and wants to boost his accomplishments as president. YOUNG