NSC DEPUTY SECRETARY GENERAL ON ARMS SALES,

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 000209

SIPDIS

E.O. 12958: DECL: 02/23/2019
TAGS: CH ETRD MARR PGOV PREL EAID WHO TW
SUBJECT: NSC DEPUTY SECRETARY GENERAL ON ARMS SALES,
FOREIGN ASSITANCE REFORM, AND BEEF

REF: A. TAIPEI 190

B. TAIPEI 180

C. TAIPEI 197

Classified By: The Acting Director for reasons 1.4(b/d)


1. (C) Summary. Taiwan's arms sale requests, including those
approved but not yet notified and those pending U.S. approval
are an essential part of the Ma Administration,s defense and
cross-Strait strategies, NSC Deputy Secretary General Ho
Sze-yin told the Acting Director February 24. NSC Secretary
General Su Chi confirmed this in a separate meeting with a
visiting USG delegation and Ho hopes to deliver the same
message directly to State Department officials when he visits
Washington March 2-3. Contrary to Foreign Minister Ou's
comment to the Director, Taiwan does not seek or want U.S.
assistance in facilitating discussions between Taiwan and PRC
on Taiwan's effort to secure WHA observer status. Ho agreed
that the lack of any adverse public reaction to suggestions
that Taiwan open its market completely to U.S. beef has been
a positive sign, and offered to press for a timetable from
the Health Department. Ho will travel to Washington to
discuss ways to make Taiwan,s foreign assistance more
efficient and transparent. End Summary.

Ma Administration Committed to U.S. Arms
--------------


2. (C) President Ma and his administration see U.S. arms
sales, including, but not limited to, all of the items in the
2001 package, as essential parts of Taiwan,s defense and its
efforts to reduce tensions with the PRC, NSC Deputy Secretary
General Ho Sze-yin told the Acting Director during a February
24 meeting. Expressing surprise that he continued to hear
doubts about Ma,s commitment to a strong defense, Ho
underscored emphatically that suggestions Taipei is not
seriously interested in the remaining items from the 2001
notification, or has decided against pursuing additional
systems such as F-16 C/Ds are off the mark. Later in the day
in a meeting with a visiting U.S. Pol/Mil delegation, NSC
Secretary General Su Chi confirmed Taiwan's desire to
purchase F-16 C/Ds, additional PAC-3 missiles, utility
helicopters and other systems under discussion with the
United States. Taiwan would need to conduct the feasibility
study on diesel-electric submarines requested from the United
States, Su said, before making the decision whether to pursue
that very costly system.


3. (C). Continued arms sales will not cause Beijing to put
the brakes on cross-Strait rapprochement any more than
Beijing,s deployment of missiles in Fujian will dissuade the
Ma Administration, Ho emphasized. The two sides implicitly
understand that the military dimension of the cross-Strait
dynamic is separate from the economic and other aspects of
the relationship, he emphasized. On the contrary, it is
essential that Taiwan maintain a strong defense, in part to
deter Beijing from using a military confrontation with the
island to divert its citizens' attention from difficult
economic conditions at home in the future, Ho said.


4. (C) Ho confirmed that he would seek a meeting with
appropriate State Department officials to convey a message
from President Ma on this subject during a planned March 2-3
visit to Washington to discuss Taiwan,s foreign assistance
reform efforts (see below). Specifically, he said, he would
use the meeting to confirm that President Ma, the National
Security Council, and Ministry of National Defense were in
accord on the defense procurement priorities laid out by
Defense Minister Chen during his February 18 meeting with the
Director (ref A). President Ma did not go into the same
level of detail in his February 17 meeting with the Director
(ref B) because he believed it better to leave the
communication of details to MND and not, Ho emphasized,
because he had any disagreement with the MND priorities.


5. (C). A/DIR noted that there had been initial discussions
between TECRO, EAP/TC, AIT/T and MOFA about the possibility
of initiating a MOFA-led Pol/Mil delegation visit to
Washington, as a complement to the semi-annual Pol/Mil
delegation visits to Taiwan organized by AIT/W and the
Monterey Conference in the United States. Such a meeting
could facilitate interagency coordination on military issues
in Taiwan as well as allow more U.S. civilian policy-level
officials contact with their Taiwan counterparts in
Washington. While there might be good reasons to support
such a proposal, A/DIR said, it would be important that it

TAIPEI 00000209 002 OF 002


not duplicate existing programs. Ho agreed that timing,
level and composition of the delegation would all be
important factors in determining its success.

A "Resounding No" to U.S. Mediation on WHA Bid
-------------- -


6. (C) A/DIR noted that, in FM Ou's February 18 meeting with
the Director, Ou had apparently requested U.S. assistance in
facilitating contacts between PRC and Taiwan representatives
in Geneva (ref C). While the United States strongly
supported Taiwan's goal of securing WHA observer status in
May and cross-Strait dialogue, A/DIR said, this risked
putting Washington in the role of mediator and also might be
counter-productive in getting the PRC to agree. Ho expressed
surprise at Ou's suggestion and, later in the day, after
consulting with others in the government, contacted A/DIR to
say that the Foreign Minister's comments ("resoundingly")did
not reflect Taiwan's official position. Taipei appreciates
U.S. support in general but does not seek U.S. intervention
on this issue at this point.

No Adverse Public Response to Beef Market Opening
-------------- --------------


7. (C) A/DIR noted that AIT/T,s Agriculture section had been
unsuccessfully trying to get a meeting with Director General
of the Ministry of Health,s Food and Safety Bureau since the
February 8 public event attended by Health Minister Yeh and
DIR. Ho agreed to call the Ministry to encourage progress,
noting the Health Minister was becoming more supportive of
market opening. Ho noted that the release of the Ministry,s
risk assessment report, as well as a number of AIT-organized
promotional activities had been well-received and that there
appeared to have been no adverse reaction to the idea of
market opening. A/DIR emphasized the importance of resolving
beef, to put the trade relationship oback on track and to
allow both sides to focus on issues such as the TIFA and a
bilateral investment agreement.

Looking to the U.S. for Ideas on Assistance Reform
-------------- --------------


8. (SBU) Ho said the main reason for his planned March 2-3
visit to Washington was to meet with OPIC and Millennium
Challenge Corporation officials. President Ma is committed
to reform Taiwan,s foreign aid process, to make it more
effective and transparent, Ho said. One thought would be to
open aid projects up to tender by Taiwan contractors but few,
if any, of these companies have the experience and expertise
to execute projects particularly in Latin American, where
Taiwan has a number of diplomatic allies. Instead, Ho said,
Taiwan was considering whether it would be more cost
effective to identify projects and then open them up for bids
by U.S., Canadian, or other contractors with experience in
the region. A/DIR assured Ho that the United States would be
happy to share with Taiwan its experiences ) positive and
negative ) in development assistance work. Ho noted that
TECRO has already arranged his meetings with OPIC and the
MCC.
WANG