THE DIRECTOR'S FAREWELL CALL ON PRESIDENT MA

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 000778

SIPDIS

STATE PASS USDA FOR OSEC/HOLTZMAN; FAS/OA/TURNER; FAS/OSTA
BLUM, HAMILTON, DAWSON; FAS/OCRA RADLER, BEILLARD; AND
APHIS/IS/CAPLEN; USTR FOR ALTBACH, O'CONNOR AND STRATFORD.

E.O. 12958: DECL: 06/25/2019
TAGS: PREL PGOV ECON ETRD MARR TW CH
SUBJECT: THE DIRECTOR'S FAREWELL CALL ON PRESIDENT MA

Classified By: AIT Director Stephen M. Young,
Reasons: 1.4 (b/d)


1. (C) Summary. The United States does not agree with the
PRC view that U.S. arms sales to Taiwan are out of step with
improving cross-Strait ties, the Director told Ma Ying-jeou
during his June 25 farewell call on the President. Taiwan
arms purchases are intended solely to replace older systems
and to maintain the relative military balance, Ma emphasized.
If the two sides conclude a bilateral economic cooperation
agreement, China will offer only pro forma objections to
Taiwan signing FTAs with other trade partners, the President
predicted. Ma also indicated Taiwan needs a way to quell
growing popular discontent with the inability to return
Taiwan criminals from the United States. The President left
open whether Taiwan negotiators would commit to an agreement
on opening its market fully to all U.S beef products that
included a fixed date for phase two implementation. The
Director emphasized the importance of inter-party dialogue,
particularly in times of heightened social tensions stemming
from the global economic crisis. End Summary.

Cross-Strait Military Issues
--------------


2. (C) The Director and Taiwan President Ma Ying-jeou
discussed cross-Strait relations and the range of issues in
the bilateral U.S.-Taiwan relationship during the Director's
cordial, one-hour farewell call. Citing media reports of
recent U.S.-PRC military talks, the Director noted that
Chinese officials appeared to be pushing the line that
continued U.S. arms sales to Taiwan are "out of step" with
improvements in cross-Strait relations. The United States
does not share the Chinese view, the Director said, and
remains committed to its obligations under the TRA. China's
actions do not match its rhetoric, President Ma suggested.
Despite the thaw in cross-Strait ties, he said, the PRC
continues to upgrade its military capabilities and to add to
the more than 1000 missiles already arrayed against Taiwan.


3. (C) For its part, Ma said, Taiwan has no interest in
attacking China. The purpose of the Taiwan military is
exclusively to deter Chinese aggression, the President
stressed. As a matter of policy, Taiwan arms purchases are
intended solely to replace older systems and to maintain the
relative military balance. Given PRC military modernization
and deployments, therefore, Taiwan will need U.S. military
hardware for the foreseeable future. If tensions continue to
relax, Ma suggested, the PRC might offer to eliminate its
missiles in exchange for an end to U.S. arms sales. This, he
said, would be a "bad bargain," given the PRC's other
military capabilities. In keeping with past practice, a
member of the U.S. military delegation recently in Beijing
will visit Taipei during the week of June 29 to provide an
overview of the talks, the Director said.

Taiwan-China Economic Ties
--------------


4. (C) If China and Taiwan conclude an Economic Cooperation
Framework Agreement (ECFA),President Ma said, it will be a
signal that China will not object to Taiwan signing free
trade pacts with other partners. The Director cautioned
that, in meetings with U.S. officials, Chinese officials have
hinted that this might not be the case. Ma dismissed this
concern, arguing that while Beijing would offer only pro
forma objections to FTA talks with Singapore and others among
Taiwan's trading partners.

Cross-Strait Ties Depend on Strong U.S. Relations
-------------- --------------


5. (C) The rapid improvement in cross-Strait relations since
he took office confirms that China will be flexible as long
as Taiwan does not seek de jure independence, Ma said.
Setting aside political issues through creative ambiguity
serves the interests of both China and Taiwan. Certainly,
the recent economic downturn brought home to many people on
Taiwan the importance of China to their future. This "third
way," the President opined, of pursuing integration,

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particularly in economic areas, while seeking neither
independence nor reunification, makes Taiwan less vulnerable
and, from Beijing's perspective, keeps the island from
drifting further away. We can leave these thorny issues to
our children's children, he suggested.


6. (C) However, strong U.S.-Taiwan relations are a
precondition for improved cross-Strait ties, Ma emphasized,
and restoring mutual trust has been a major accomplishment of
his administration. The Director agreed, and stressed the
need to continue to coordinate closely. While Taiwan will
naturally engage China directly, we should keep U.S.-Taiwan
communication channels open so we know how we can help. The
United States supports the Ma administration's cross-Strait
policy, he said, including efforts to improve political and
economic relations with China and to expand Taiwan's
international space. Moreover, he said, the United States
does not agree with the Chinese view that we should step back
now that cross-Strait dialogue is bearing fruit. On a
related topic, the Director noted, Chinese officials have
recently praised the Track 2 dialogue organized by Don
Zagoria.

Extradition
--------------


7. (C) The United States continues to consider the proposal
to negotiate an extradition agreement with Taiwan, the
Director said. That said, he noted that public comments by
TECRO Washington Chief Representative Jason Yuan or others
only complicate the process. Taiwan is not interested in an
extradition agreement as a way to score "diplomatic points,"
Ma assured the Director. Ma noted the growing popular
discontent with the inability to return Taiwan criminals from
the United States. Since China and Taiwan recently signed a
bilateral legal assistance agreement that includes provisions
for returning criminals, he added, Beijing is not in a
position to claim that concluding such a deal would be
tantamount to recognizing Taiwan's sovereignty.

New AIT Office
--------------


8. (SBU) Noting that National Security Council Secretary
General Su Chi, also in the meeting, had taken part in a June
22 dedication ceremony at the site of planned AIT NOC, the
Director thanked Ma for his government's support for the
project. AIT still may need help to ensure the permitting
process goes smoothly and to acquire an adjacent piece of
land, the Director said. Ma offered to assist as possible.

Beef
--------------


9. (C) Near the end of the meeting, the Director noted that
negotiators are close to an agreement on fully opening
Taiwan's market to U.S. beef, and stressed the need to
conclude a deal quickly. This deal must have a fixed date
for phase two implementation, he emphasized. If our proposed
4-month timeframe for consultations would be awkward given
Taiwan's electoral calendar, the United States might be
prepared to push this back to six months, ensuring that the
consultations take place after Taiwan's December elections.
Fundamentally, though, the fact that there has been no
significant media or public criticism in response to recent
news reports about a possible market opening suggests that
the Health Minister is being far too timid, the Director
opined. Specifically, he said, it seemed that Health
Minister Yeh views his &report card8 as solely health
issues, and despite his own admission that U.S. beef is
absolutely safe, he has balked at moving forward. It is up
to President Ma to focus on the benefit to U.S.-Taiwan
relations and make the political decision to move forward
now. In addition to the science-based argument in favor of a
market opening, it is time to look now to the broader
benefits an agreement will bring to the bilateral
relationship.


10. (C) President Ma offered little in the way of a
substantive response. Although he admitted that his earlier

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pledge to reach a deal by the end of June appeared out of
reach, he merely said he was hopeful the negotiators will
reach a suitable agreement in short order. Immediately after
the meeting, the Director pulled Su Chi aside to suggest that
our offer to consider a six month interval was a major
concession, which President Ma seemed not to recognize. The
Director urged Su to press Minister Yeh to accept this offer.


Inter-Party Dialogue
--------------


11. (C) The Director concluded the meeting by emphasizing the
importance of inter-party dialogue, particularly given the
social tensions engendered by the global economic downturn -
a message he also gave to DPP leaders. Ma noted that he had
a standing offer to meet with Tsai Ing-wen, which the DPP
Chair is unable to accept because of the disarray within her
own party and the stresses on it caused by the Chen Shui-bian
case. While such a public meeting is currently impossible,
Ma said, the KMT and DPP have informal channels for dialogue.
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