PRESIDENTIAL CANDIDATE FRANK HSIEH ON BILATERAL

C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 002191

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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

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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

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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

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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

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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

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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