TAIWAN NSC SECRETARY-GENERAL SU CHI ON

C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 000762

SIPDIS

E.O. 12958: DECL: 06/03/2023
TAGS: PREL PGOV AORG MARR MASS MCAP CH TW
SUBJECT: TAIWAN NSC SECRETARY-GENERAL SU CHI ON
CROSS-STRAIT NEGOTIATIONS; U.S. ARMS SALES

Classified By: AIT Acting Director Robert S. Wang. Reasons: 1.4 (b/d)


1. (C) Summary. NSC Secretary General Su Chi told Senate
Foreign Relations Committee senior staff member Frank Jannuzi
that the Ma Administration considers its U.S. ties to be even
more important than its relations with Beijing. He said the
former is critical to both Taiwan's survival and prospects
for improving cross-Strait ties. Su indicated that Ma wants
to normalize Taiwan's economic relations with the mainland as
quickly as possible while pressing the PRC to afford Taiwan
greater "international space." He hopes Beijing will agree
to Taiwan,s observer status in the WHA next May, and stated
that Beijing has now agreed to allow current Taiwan officials
to participate in upcoming SEF-ARATS meetings as
&consultants.8 Taiwan is also talking to Beijing about
freezing the number of missiles aimed at the island, if only
as a symbolic gesture, he said, but the prospect of a &peace
agreement8 is in the distant future.


2. (C) At the same time, Su Chi reiterated Taiwan,s desire
to strengthen its relations with the U.S. because this would
increase Taiwan,s leverage in its discussions with China.
Specifically, he expressed the hope that the U.S. could
proceed on existing arms procurement items (citing PAC-II and
PAC-III,s in particular) and consider selling F-16's as
well. Su Chi said the F-16,s would only replace earlier
models and, in his opinion, would not undermine ongoing
cross-strait discussions or alter the existing military
balance. He voiced Taiwan,s continued interest in an FTA
although he recognized the substantive and political value of
progress on TIFA. Finally, Su said Beijing has now agreed to
allow foreigners to use the direct weekend charter flights
once they start up in July. End Summary.


3. (C) National Security Council Secretary-General Su Chi
met with visiting Senate Foreign Relations Committee senior
staff member Frank Jannuzi and AIT Acting Director Bob Wang
on June 2. Jannuzi asked Su Chi to pass the best wishes of
Senator Biden to President Ma Ying-jeou, explaining that the
senator was very encouraged by Ma's inaugural address laying
out a positive cross-Strait agenda. There is a new, more
relaxed attitude about Taiwan in Washington these days,
Jannuzi said.

Cross-Strait Negotiations
--------------


4. (C) Jannuzi told Su Chi that members of Congress want to
ensure U.S. actions reinforce Ma's efforts to improve
cross-Strait relations. While the U.S. does not intend to
mediate between Taiwan and the PRC, neither does it want to
do anything that undermines Taiwan or cross-Strait relations.
Jannuzi asked Su Chi how the U.S. can help the cross-Strait
process and, specifically, whether congressional
notifications of arms sales would enhance or undermine
Taiwan's cross-Strait negotiations.


5. (C) Su responded that while the Ma administration is
working to improve relations with China, it also wants to
improve relations with the U.S. In fact, he said, he and
President Ma consider relations with the U.S. as more
important than relations with China. China "only respects
power," he said, and, thus, U.S. support "is essential to our
approach to China." The Ma administration "sees China as a
threat and an opportunity," with the emphasis now on
opportunity.


6. (C) Su explained that Taiwan's top priorities in its
negotiations with the PRC are charter flights, PRC tourists
visiting Taiwan, normalizing bilateral relations (property,
investment, legal issues),and international space. He
pointed out that forty percent of Ma's inaugural address
focused on international space, which indicates the
importance of international space for Taiwan. Ma
specifically requested KMT Chairman Wu Poh-hsiung to deliver
the international space message to Hu Jintao during Wu's
visit to Beijing last week. Hu's appointment of Vice Foreign
Minister Wang Yi as head of the PRC Taiwan Affairs Office
(TAO) a few days later, Su argued, showed Beijing "got the

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message and is willing to talk about international space."
There is much talk about a cross-Strait peace accord, Su
noted, but this will take a longer time.


7. (C) Su told Jannuzi that the cross-Strait negotiations
starting next week between Taiwan's Strait Exchange
Foundation (SEF) and the PRC's Association for Relations
Across the Taiwan Strait (ARATS) will be "unofficial-
official" negotiations. Beijing, he explined, had agreed
that government officials from both sides can sit at the
negotiating table as advisors or consultants. Negotiations
on PRC tourism to Taiwan are already in this
"unoffical-official" format, he said, while those on charter
flights remain under the existing civilian format. (Note:
The "Macao channel" that negotiated the current cross-Strait
holiday charter flights over the past several years consisted
of delegations from Taiwan and Mainland China under industry
-- airline and tourism -- leadership with unacknowledged
government officials imbedded in the delegations.) This will
be a "new way of talking," Su explained, with "officials
doing the negotiating."

International Space, Cease Fire, and Foreign Passengers
-------------- --------------


8. (C) Su said he is fully confident cross-Strait economic
negotiations on charter flights and PRC tourists will
succeed, but he remains uncertain about the issue of
international space. Jannuzi responded that Senator Biden
had written WHO in support of Taiwan participation and many
other members of Congress are deeply frustrated over
Beijing's recalcitrance. Expressing appreciation for this
support, Su Chi stressed that "health issues know no
borders." The Ma administration, he explained, is stressing
pragmatic participation in functional IO's such as the World
Bank, IMF, and ICAO. It may also decide to go slow on the UN
issue this year. The Ma administration will be closely
watching WHO over the next year as an indicator of Beijing's
intentions, Su said, expressing hope for observer status next
May under the practical name "Chinese Taipei."


9. (C) Jannuzi asked Su Chi if there is any chance for a
diplomatic cease fire between the PRC and Taiwan. Su
responded that Taiwan has privately informed Beijing of its
desire for a cease fire, and "I think they understand." The
PRC bureaucracy, however, is an obstacle to a cease fire
settlement. The military and foreign policy bueaucracies, he
rued, "are tough nuts to crack." Thus, Taiwan has repeatedly
sought to meet directly with Hu Jintao, he explained, in
order "to convince" PRC bureaucrats, who are focused on
"their own bureaucratic turf," to alter their ways. Taiwan's
strategy, Su said, is to "talk with the big guys in order to
reach the working level officials." Hu, moreover, has his
own vested interest in achieving progress, Su said, because
Taiwan will be his "historical legacy." Besides, he added
with a smile, "we have shown that Taiwan can make trouble."


10. (C) Su stated that Taiwan had pressed Beijing to include
foreigners in the cross-Strait charter flight agreement. He
urged Jannuzi to encourage U.S. congressional travellers to
use the direct cross-Strait route, as this might help Taiwan
convince Beijing to permit foreign carriers to participate in
the cross-Strait flights. Beijing's reluctance to allow
foreigners on the cross-Strait aircraft, Su explained, was in
large part a "face issue." When Beijing finally agreed to
allow foreign nationals to fly the new cross-Strait flights,
it requested Taiwan not to publicize this decision. Beijing
also preferred to limit the number of PRC airports
participating in the charter flights in the run up to the
August olympics, Su explained, but it also wanted to help Ma
realize his pledge to achieve charter flights in July, So,
Beijing agreed to an initial short list of five PRC cities --
Nanjing, Shanghai, Xiamen, Beijing, and Guangzhou.

PRC Military Buildup
--------------


11. (C) Su told Jannuzi that the Ma administration hopes the
cross-Strait "rapprochement process" underway will reduce the

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security threat facing Taiwan. It has urged Beijing to
freeze missile buildup in order to increase Taiwan's sense of
security. But while Taiwan can realistically expect to
attain many cross-Strait objectives, particularly on charter
flights and PRC tourism, Su said, security and international
space are two issues on which Taiwan and the PRC remain at
odds. Of the two, he said, international space is the more
urgent, since there is imminent danger of diplomatic shifts
by Paraguay, Panama, and other Taiwan diplomatic partners.
Still, there has been some improvement, he said, explaining
that the number of PRC military aircraft sorties over the
Taiwan Strait had plummetted after the March 22 presidential
election from 7-10 per day to near zero.


12. (C) On the security front, Su told Jannuzi, Taiwan will
honor its commitment to purchase PAC-3 missiles, P-3C
anti-submarine surveillance aircraft, and F-16 C/D fighters.
In the future, if Beijing agrees to freeze its military
buildup, Taiwan might consider a similar freeze on weapons
acquisition. Meanwhile, Taiwan needs the F-16 C/D's, Su
argued, both to replenish its dwindling stock of fighters and
to demonstrate Taiwan's resolve to China.

Congressional Notification
--------------


13. (C) Jannuzi asked if U.S. congressional notification of
weapons sales would help or undermine Taiwan's negotiations
with the PRC. Notifications are not a problem, Su responded,
because these systems have already been funded and Beijing
has probably already protested the sales to the U.S. Timing
of notifications, however, could be an issue. June-July, for
example, would not be a good time, because Taiwan will be
negotiating, then implementing, the charter flight and
tourism agreements. He suggested that September, after
President Bush returns from China, would be a good time for
notifications.


14. (C) Jannuzi reiterated that Congress wants to be helpful
and not undermine Taiwan and the cross-Strait process.
Congress, moreover, plays a role in congressional
notification timing, he said, because the administration
usually asks Congress whether the time is right to send
notifications to the Hill. Su's candor, he said, would be
very helpful to Congress as it considers future arms sale
notifications. ADIR Wang pointed out that given the U.S.
congressional schedule and notification time requirements, a
late notification could risk the diversion of Taiwan's 2008
budget funds to other defense items.

TIFA and FTA
--------------


15. (C) Su Chi asked about the prospects for a U.S.-Taiwan
FTA. While the TIFA process is very useful, he said, the Ma
administration does not want to give up on working toward an
FTA. Just launching the FTA process would be "politically
very helpful," he said, stressing that the pace and progress
of FTA discussions is not important. Jannuzi responded that
FTA's are problematic in Washington now. He urged Taiwan to
understand that a concrete TIFA with its investment,
taxation, extradition, and other agreements, offers distinct
advantages and a much shorter time line than an FTA.
Moreover, an early TIFA would both deepen U.S.-Taiwn
commercial ties and demonstrate to Beijing the close
U.S.-Taiwan ties.

Comment
--------------


16. (C) Su Chi clearly wanted to use this opportunity to
urge the U.S. not to weaken its support for Taiwan in the
context of improving cross-strait relations. His message was
that U.S. support would strengthen Taiwan,s position and
enhance cross-strait negotiations and would not disrupt
progress.




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WANG