MAC CHAIRWOMAN HINTS AT EARLY MAY SEF-ARATS MEETING

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 000241

SIPDIS

E.O. 12958: DECL: 03/05/2019
TAGS: PREL ECON TW CH
SUBJECT: MAC CHAIRWOMAN HINTS AT EARLY MAY SEF-ARATS MEETING

REF: A. TAIPEI 221

B. TAIPEI 206

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

Summary
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1. (C) Taiwan,s legislative calendar may mean the next
SEF-ARATS talks could be scheduled for early May, MAC
Chairwoman Lai Shin-yuan told the Director March 4. The
Legislative Yuan will need to approve agreements that require
a change in law to take force, though the government does not
envision giving the legislature a more active role in talks.
Although the agenda for this next round of talks will not
include discussion of a possible broader trade pact with
China, media criticism caused the administration to change
what its calls the proposed agreement. End Summary.

SEF-ARATS in Early May?
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2. (C) The next meeting between SEF Chairman P.K. Chiang and
ARATS head Chen Yunlin could take place in early May,
Mainland Affairs Council Chairman Lai Shin-yuan told the
Director during a March 4 meeting. While deferring the
SEF-ARATS talks until after the May WHA meeting in Geneva
would increase the pressure on China to agree to an
acceptable solution for Taiwan,s WHA observer status, Lai
said, Taiwan,s legislative calendar made doing so
problematic. It seemed certain that agreements under
negotiation would require amending Taiwan law, she explained,
a process that would take the Legislative Yuan (LY) 4-6 weeks
to complete. If the government could not present these
changes to the LY with enough time to approve them before its
mid-June recess, the government would have to wait until
September to have them ratified. Although the government
agreed that it is important the LY vet agreements requiring a
change in Taiwan law, Lai dismissed as impractical LY Speaker
Wang Jin-pyng,s desire to play a more active role in actual
cross-Strait discussions.


3. (C) Noting that the goal is to have two Chiang-Chen
meetings in 2009, Lai noted that there are problems with
scheduling the meeting at the end of the year. With
important local elections scheduled for December 5, and given
the political controversy surrounding Chen Yunlin,s last
visit to Taiwan, the government will have to plan carefully
to make sure neither the elections nor the visit are
adversely affected. Nevertheless, Lai expressed confidence
that this is not an impossible task.

Economic Agreement &Media Frenzy8
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4. (C) Lai was bemused at what she described as
media-generated frenzy over the name and content of proposed
discussions on closer economic integration with China (ref
A). The Ma administration is now (at least temporarily)
calling this an Economic Cooperation Framework Agreement
(ECFA),she said, in an effort to blunt the media,s
criticism over the title of the previously-proposed &Closer
Economic Cooperation Agreement.8 It is premature to fixate
on nomenclature, Lai said, since these discussions are not
even on the agenda for the next round of SEF-ARATS talks. At
this point, Taiwan,s Ministry of Economic Affairs is still
exploring the possible scope of such an agreement, Lai said,
and had not shared its thinking with MAC. Meanwhile, Lai
confirmed that the pace of cross-Strait economic exchanges
continues to pick up with a considerable number of large PRC
delegations visiting the island in recent weeks (ref B).


5. (C) Lai agreed that there is some urgency to address some
of the issues to be included in the ECFA, since a pending
PRC-ASEAN trade agreement will make Taiwan producers less
competitive once it takes effect in 2010. She expressed
confidence that China is prepared to move quickly once
discussions start, noting that Hu Jintao specifically
mentioned the need for such an agreement in his December 31
&six point8 speech. Although Hu also mentioned the need
for military dialogue in his speech, it was far too early for
Taiwan to start discussing these issues, Lai said.

Domestic Politics
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6. (C) Lai dismissed as pure partisan politics DPP criticism
of proposed CECA/ECFA discussions and urged DIR to make clear
in his meetings with DPP leaders U.S. support for efforts to

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improve cross-Strait relations. DIR emphasized the
importance of inter-party dialogue, particularly since many
DPP supporters appear genuinely concerned that President Ma
is moving too far, too fast. Ultimately, he said, it is
important that any agreement enjoy broad public support. On
a personal note, Lai confided that, despite having resigned
(under threat of expulsion) from Lee Teng-hui,s Taiwan
Solidarity Union party, she maintained warm relations with
the former President.

Comment
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7. (C) It is difficult for us to determine just how plugged
in Lai is to President Ma's cross-Strait planning. Relations
between her and SEF Chairman P.K. Chiang appear correct but
not close. Ma seems to manage a good deal of the planning in
close consultation with his National Security Advisor Su Chi.
With 170 people working at the MAC, it is clearly a player,
but may be more involved in implementation of policy than its
actual formulation.
YOUNG