Identifier
Created
Classification
Origin
07TAIPEI2206
2007-09-27 11:04:00
CONFIDENTIAL
American Institute Taiwan, Taipei
Cable title:  

KMT LY SPEAKER WANG JIN-PYNG ON ANNUAL BUDGET, UN

Tags:  PGOV TW 
pdf how-to read a cable
VZCZCXRO9594
OO RUEHCN RUEHGH
DE RUEHIN #2206/01 2701104
ZNY CCCCC ZZH
O 271104Z SEP 07
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6945
INFO RUEHBJ/AMEMBASSY BEIJING 7300
RUEHUL/AMEMBASSY SEOUL 8919
RUEHKO/AMEMBASSY TOKYO 9099
RUEHCN/AMCONSUL CHENGDU 2113
RUEHGZ/AMCONSUL GUANGZHOU 0560
RUEHHK/AMCONSUL HONG KONG 8567
RUEHGH/AMCONSUL SHANGHAI 1374
RUEHSH/AMCONSUL SHENYANG 6083
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RHHMUNA/USPACOM HONOLULU HI
C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 002206 

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/27/2032
TAGS: PGOV TW
SUBJECT: KMT LY SPEAKER WANG JIN-PYNG ON ANNUAL BUDGET, UN
REFERENDUM

Classified By: Director Stephen M. Young, Reason(s): 1.4 (B/D).

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 002206

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/27/2032
TAGS: PGOV TW
SUBJECT: KMT LY SPEAKER WANG JIN-PYNG ON ANNUAL BUDGET, UN
REFERENDUM

Classified By: Director Stephen M. Young, Reason(s): 1.4 (B/D).


1. (C) Summary: KMT Legislative Yuan (LY) Speaker Wang
Jin-pyng told the Director on September 27 that he hopes the
LY will pass the 2008 annual budget before the current
session ends around mid-December. Wang predicted the 2008
budget will include defense spending equivalent to 3 percent
of GDP. The Director urged Wang to use his influence to help
defuse the controversy over U.S. pork imports with
ractopamine. The public is opposed to relaxing Taiwan's
zero-tolerance standard on ractopamine, Wang responded, and
he and other politicians fear a backlash from Taiwan's
farmers if they agree to lift the restriction. Wang spoke
positively of KMT party unity and KMT presidential candidate
Ma Ying-jeou, but hesitated to predict a KMT presidential
victory. The parties will not forego their respective UN
referenda in favor of a "consolidated" referendum because,
without the controversy, voters will lose interest. End
summary.


2. (C) The Director met with KMT LY Speaker Wang Jin-pyng
on September 27 to discuss Taiwan's annual budget, including
defense spending, and the ongoing difficulties over
ractopamine restrictions on US pork imports. The Director
told Wang that many high-level officials in Washington are
critical of Taiwan's UN referenda, and that U.S.-Taiwan
relations are under significant pressure. Despite its close
friendship with Taiwan, the U.S. must take steps to preserve
its own national security, and these include trying to
minimize tensions between China and Taiwan.

ANNUAL BUDGET
--------------


3. (C) Wang said he hoped the LY will pass the 2008 annual
budget before December 12, 2007. Wang explained that it is
customary for the LY to suspend operations for the month
preceding legislative elections to allow sitting legislators
to focus on their re-election campaigns. Because the LY
elections are scheduled for January 12, 2008, Wang continued,
the current LY session will likely close on or around
December 12, 2007. Wang told the Director that while he
could not promise that the budget process would be smooth,
he hoped legislators will cooperate to put the budget issue
behind them before the LY elections. If that is not

possible, Wang continued, the budget must be passed before
the result of the presidential election is announced next
March; otherwise, legislators from the losing party might
protest their party's defeat by boycotting the budget process.

DEFENSE BUDGET
--------------


4. (C) According to Wang, the current defense budget is at or
near 2.8 percent of GDP, and the LY is on track to approve a
2008 defense budget equivalent to 3 percent of GDP. If
certain weapons systems or other defense items are not
purchased, the Director urged Taiwan to retain such funding
for defense purposes, otherwise, defense expenditures will
not meet the 3 percent-of-GDP goal. Wang acknowledged this
problem, and raised the concern that the LY might hesitate to
allocate funds for the purchase of F-16 fighter aircraft
without some kind of assurance from Washington that the
planes would ultimately be sold. The Director told Wang that
the sale of the F-16's was by no means a given, even if
adequate funds were included in the defense budget. However,
if the budget did include funding for the F-16's, the
Director continued, it would be much easier to convince US
decision-makers that Taiwan was genuinely committed to the
sale. Wang proposed that the US and Taiwan revisit this
issue next year, after the election of a new president. The
Director responded that it would be best if funding for all
items, including F-16's and PAC-III's, was preserved in the
2008 budget up for consideration in the fall. (Comment:
Despite the Director's specific caution that this exchange
was sensitive and not to be shared with the press, the
PR-conscious Speaker promptly briefed the media in a
self-serving manner, stories of which appeared in September
27 morning newspapers. End Comment.)


TAIPEI 00002206 002 OF 003


RACTOPAMINE ISSUE
--------------


5. (C) The Director raised concern over current politicizing
of the issue of U.S. pork imports containing ractopamine.
Wang told the Director that "in all opinion polls" the public
disapproved of allowing US pork products containing
ractopamine to enter the Taiwan market. Wang also protested
that he and other political figures would be castigated by
farmers' groups and public health advocates if they were to
lift the restriction. Taiwan's farmers are using unjustified
public health concerns to conceal their protectionist
motives, the Director countered. Japan, Korea, and other
Asian nations have already adopted an international standard
on acceptable levels of ractopamine, the Director continued,
and Taiwan has no scientific basis to do otherwise.
U.S.-Taiwan relations are especially sensitive now, the
Director cautioned, and in this context Taiwan should try to
avoid a clash over agricultural imports. If this issue is
not resolved amicably, the Director added, it could further
complicate U.S.-Taiwan relations. Wang acknowledged the U.S.
concern, but did not offer any promises to help resolve the
issue.

KMT POLITICS
--------------


6. (C) Asked about KMT politics, Wang said KMT party unity is
"not bad" at this point in the legislative and presidential
elections. In a departure from his past critical assessments
of KMT presidential candidate Ma Ying-jeou, Wang remarked
that Ma's "long-stay" program in southern Taiwan is beginning
to bear fruit. According to Wang, DPP internal polls put DPP
presidential candidate Frank Hsieh (Chang-ting) 13 points
behind Ma, but no one within the KMT is willing to predict a
victory. This is because nearly 40 percent of Taiwan voters
do not identify strongly with one party or the other, Wang
explained, and no one is able to confidently predict how
these voters will behave. The remaining 60 percent of voters
are split almost evenly between Green and Blue, Wang
continued. If voter turnout is low, Wang predicted, the DPP
will benefit, since DPP voters typically turn out in greater
numbers than their less-motivated KMT counterparts.

UN REFERENDA
--------------


7. (C) Wang suggested there is little likelihood the DPP and
KMT will agree to "consolidate" the two UN referenda into
one, unless President Chen tries to do so via a "defensive"
referendum. Both parties are using the referenda to entice
their respective voters to the polls, Wang explained. A
compromise referendum, stripped of controversial
nomenclature, would do little to accomplish that purpose.
The Director noted that using the "defensive referendum"
mechanism would imply that Taiwan's security is under threat,
which could cause negative cross-Strait repercussions.


8. (C) Wang asked the Director whether the U.S. considers the
DPP UN referendum to be "crossing the red line" of the PRC's
Anti-Secession Law. The Director replied that the U.S.
believes the DPP UN referendum is both "unnecessary" and
"unhelpful." Wang then asked how the US perceives the KMT UN
referendum. The Director replied that it is not as
problematic as the DPP referendum because it is not linked to
"name change." Wang questioned whether passage of the DPP
referendum would be equivalent to a declaration of Taiwan
independence. The Director remarked that, regardless of its
legal significance, passage of the DPP UN referendum would
certainly provoke a reaction from Beijing.

ANXIETY OVER US-TAIWAN RELATIONS
--------------


9. (C) In closing, Wang asked the Director whether
U.S.-Taiwan relations are really as difficult as the Director
had seemed to intimate earlier. The Director replied that
while our ties our durable, disagreement over the UN
referendum and food safety standards has increased
difficulties in an already strained relationship. Soon, both

TAIPEI 00002206 003 OF 003


Taiwan and the U.S. will have new presidents, the Director
reminded Wang. In this transitional period, he continued,
both sides should take care to avoid worsening relations.

COMMENT
--------------


10. (C) Wang's measured optimism on the 2008 budget process
is not universally shared. Many believe the KMT will block
significant arms packages like the F-16's and PAC-III's until
after the LY and presidential elections, then make their
determination based upon who wins the presidency.
YOUNG