TAIWAN'S PACIFIC ALLIES SECURE FOR NOW, BUT PRC

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001400

SIPDIS

E.O. 12958: DECL: 09/16/2018
TAGS: PGOV PREL EAID TW CH
SUBJECT: TAIWAN'S PACIFIC ALLIES SECURE FOR NOW, BUT PRC
RIVALRY STILL A THREAT

Classified By: AIT Director Stephen Young for reasons: 1.4 (b/d)


1. (C) Summary: While its diplomatic ties to six Pacific
island states appear stable for the moment, Taiwan's efforts
to expand its dialogue with the Pacific Islands Forum (PIF)
illustrate the problems it faces in implementing President Ma
Ying-jeou's "diplomatic truce" with the PRC and his call to
end "checkbook diplomacy." Keen to maintain the limited
number of formal diplomatic partners, Taiwan will probably
increase formal development assistance to its Pacific island
allies. Similarly, despite being rebuffed in its efforts to
get a seat in meetings PIF holds with nonmembers, Taiwan is
unlikely to cut its losses and abandon efforts to engage the
group formally. The establishment of a Ministry of Foreign
Affairs office focused on ASEAN highlights Taiwan's concerns
about marginalization in the region. Notwithstanding the
President's efforts to end Taiwan's diplomatic battles with
the PRC, in the Pacific islands and elsewhere in Asia, Taipei
continues to view the world in terms of a battle to prevent
being "squeezed out" by Beijing. End summary.


CHECKBOOK, IF NOT CHECKBOOK DIPLOMACY, STILL NECESSARY IN THE
PACIFIC


2. (C) Taiwan's six diplomatic allies in the South Pacific
(Kiribati, Marshall Islands, Nauru, Palau, Solomon Islands,
and Tuvalu) were uneasy about the implications of Taiwan
President Ma Ying-jeou's efforts to improve cross-Strait ties
and, in particular, his pledge to end the diplomatic war
between Taiwan and the PRC, MOFA Director General for East
Asian Affairs Victor Yu told AIT POL chief September 12.
This unease had prompted Taiwan to reassure its Pacific
island diplomatic partners that its engagement with the PRC
would not change its policy in the region and that it would
continue, and probably even increase, development
cooperation. While he was "always a bit nervous," Yu
expressed confidence Taiwan would not lose any diplomatic
allies in the South Pacific in the near future, explaining
that these allies are small countries with few resources.
With the great majority of countries already in its camp, he
argued, the PRC could afford not to compete for the loyalty
of the Pacific microstates. Yu bridled at the term (used by
President Ma) "checkbook diplomacy," arguing that Taiwan
assistance had "done a lot" for its allies and was not used
to bribe politicians. Yu noted Ma wanted to introduce
supervisory mechanisms to increase the transparency of
Taiwan's aid to allies, but also claimed Taiwan did not want
to offend its allies.


IF NOT THE PACIFIC ISLANDS FORUM


3. (C) Asked about recent press coverage of Taiwan's
intention to pursue closer dialogue with the Pacific Islands
Forum (PIF),Yu noted that Taiwan gave significant amounts of
assistance to PIF-sponsored activities and planned to
contribute just over USD 400,000 in 2009. Despite this, he
said, Taiwan was unable to participate fully in the forum
because of PRC pressure. Particularly disturbing from
Taiwan's perspective was its inability to take part in the
dialogue with non-member states (including the United States
and PRC) that follows the PIF annual meeting. Instead, Yu
said, Taiwan could only hold informal meetings with its six
diplomatic allies that are PIF members. The sticking point
was Taiwan's insistence that it participate under the name
"Taiwan, ROC." If a formula could not be found to allow
Taiwan a broader dialogue with the PIF, Yu cautioned, Taiwan
might need to reconsider its involvement with, and
sponsorship of, the organization. Pressed by POL chief to
confirm that Taiwan was considering ending its funding of PIF
activities, Yu quickly backed off, noting that Taiwan was
prepared to be patient to see whether and how improving
cross-Strait relations would bolster Taiwan's ties to PIF.
While Taiwan's aid to PIF is transparent, Australian Commerce

TAIPEI 00001400 002 OF 002


and Industry Office Deputy Director Stephen Huang told poloff
September 18 that Canberra consistently encouraged Taiwan to
be transparent with all the foreign aid it provides. It
would be hard, though, Huang lamented, for Taiwan to change
its embedded culture. Huang also agreed that closer Taiwan
ties in the PIF were "all up to China."


HOW ELSE DOES TAIWAN GAIN REGIONAL FACE/SPACE?


4. (C) The importance Taiwan places on gaining face in its
own backyard surfaced in poloffs' September 18 meeting with
Foundation on International and Cross-Strait Studies (FICSS)
Vice President Chao Chien-min. China, Chao suggested, could
"give Taiwan some face" by agreeing that a prominent
political figure such as former Premier Lien Chan represent
Taiwan at this year's APEC leaders' summit, rather than the
past practice of having a top business executive hold the
position. The deterioriation of Taiwan-Japan relations under
the Ma administration probably heightens Taiwan's interest in
being a player and making things work in the region. MOFA
Asian DG Yu said Japan was somewhat skeptical of Ma's
cross-Strait policy and concerned that it could be left "high
and dry" as Taiwan moved to improve relations with the PRC.
Chao maintained Taiwan was increasingly concerned about being
left out of East Asian regional integration and noted
politics, rather than economics, were the main motivation
behind Taiwan's eagerness to establish a Free Trade Agreement
(FTA) with Singapore. Such an agreement would serve as a
link to ASEAN. Without an FTA, Taiwan would be "nervous" and
feel isolated if ASEAN formalized "plus one" or "plus three"
dialogues with China and other countries in the region but
not Taiwan.


5. (C) Indeed Taiwan is taking steps to bolster its regional
interests. MOFA recently set up a new ASEAN office, and ECON
chief and poloff met with the office director Anthony Ho on
September 23. Ho explained ASEAN was moving "fast" on
integration, and MOFA established his office to develop
channels through which Taiwan could work with ASEAN and
explore cooperative initiatives on functional issues such as
labor and the environment. Ho said Taiwan remains interested
in pursuing bilateral FTAs with Singapore and other ASEAN
trading partners. At the same time, he indicated the Ma
administration hopes improved cross-Strait relations will
serve as a precursor to enhanced Taiwan relations with ASEAN,
possibly to encompass an ASEAN "plus four" (China, South
Korea, Japan, Taiwan). On prospects for improving
cross-Strait ties, Ho said &it takes two to tango8 and
urged more international support for Ma's efforts to reduce
tensions and more international encouragement for China to
reciprocate.


6. (C) Comment. MOFA clearly understands that Taiwan is
unlikely to gain further ground in PIF by insisting on
participating under the name "Taiwan, ROC." Taipei may be
using the PIF, a small grouping in which Taiwan has few
interests beyond its rivalry with the PRC, to show it will
not give in or give up. Even with no realistic prospect for
a breakthrough on nomenclature, though, Taiwan is unlikely to
decrease its involvement in the PIF and similar regional or
international organizations as it presses forward with its
quest for a larger voice regionally and internationally.
YOUNG