MAINLAND AFFAIRS COUNCIL CHAIR LAI ON U.S.-TAIWAN

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 000915 SIPDIS E.O. 12958: DECL: 07/27/2019 TAGS: PGOV PREL TW CH SUBJECT: MAINLAND AFFAIRS COUNCIL CHAIR LAI ON U.S.-TAIWAN AND CROSS-STRAIT RELATIONS REF: TAIPEI 0904 Classified By: Acting AIT Director Robert S. Wang, for Reasons 1.4(B) and (D). ¶1. (C) Summary. Mainland Affairs Council (MAC) Chairwoman Lai Shin-yuan told ADIR in a July 28 meeting that the overall message she received from U.S. officials and academics on her recent visit was support for Ma's cross-Strait policy and a strengthened U.S.-Taiwan relationship. Lai said, despite criticism to the contrary, Ma and MAC continued to have a cautious approach to cross-Strait relations. A strong defensive capability and U.S. support were critical to Taiwan's ability to promote further improvements in the cross-Strait relationship. In addition, Taiwan's relationship with its East Asian neighbors, particularly Japan, was important to securing long-term regional peace and stability. ¶2. (C) Lai characterized opposition claims that Ma's cross-Strait policy was somehow compromising Taiwan's sovereignty as political maneuvering, countering that the DPP remained unwilling to engage in dialogue with officials or to offer any real alternatives. Although there was consensus between Taiwan and the mainland to negotiate an Economic Cooperation Framework Agreement(ECFA),such negotiations had not begun, said Lai, nor was there agreement to place the issue on the agenda of the fourth round of talks between the Straits Exchange Foundation (SEF) and the Association for Relations Across the Taiwan Strait (ARATS). In any case, the recent exchange of letters between Ma, in his capacity as newly-elected Kuomintang (KMT) Chair, and Hu Jintao, as General Secretary of the Chinese Communist Party (CCP),would not affect current mechanisms for cross-Strait policymaking; SEF remained the only organization authorized to sign agreements with the mainland. End Summary. Ma and MAC Remain Cautious on Cross-Strait Policy -------------- -------------- ¶3. (C) Despite opposition criticism that the Ma government was selling out Taiwan's sovereignty to the mainland, both Ma and the Mainland Affairs Council maintained a cautious approach to the further development of cross-Strait relations, said Lai. We are not complacent, said Lai, despite improvements in the relationship. Because the cross-Strait issue can be so ideological, MAC is the government organ that really emphasizes a step-by-step approach, noted Lai. MAC's monthly polls show strong public support for Ma's China policy, she added. U.S. Support for Taiwan's Strong Defense Critical -------------- -------------- ¶4. (C) Lai said that during her travels in the U.S. she hoped to communicate to U.S. officials and academics the importance of U.S. support for Taiwan's defensive needs. Cross-Strait relations are entwined with Taiwan's relations with the U.S., said Lai. U.S. arms sales to Taiwan are critical as Taiwan seeks to strengthen its defensive capabilities in order to further advance cross-Strait relations. If there is no movement on arms sales, then cross-Strait relations will hit a wall because Taiwan will not have the confidence it needs to continue to engage the mainland, she added. Taiwan Also Seeks to Project Soft Power -------------- ¶5. (C) The democratic values Taiwan shares with the U.S. are an important foundation for the U.S.-Taiwan relationship. Through increasing exchanges between Taiwan and the mainland, said Lai, Taiwan expects these same democratic values to exert some influence on the mainland. Lai on DPP: Taiwan Needs a Mature Opposition -------------- ¶6. (C) The DPP says it is concerned with Taiwan's future, said Lai; the Ma administration is also concerned with Taiwan's future. But too often, it seems that the DPP's TAIPEI 00000915 002 OF 002 concerns about cross-Strait issues are more a play for power, rather than issues on a genuine national agenda. Taiwan needs a mature opposition, Lai complained - one that challenges ideas, offers suggestions, and conducts a mature discussion. This, said Lai, is the democratic process. ADIR noted that DPP leaders are concerned that if they sit down with officials, the KMT will use it for political reasons. Lai agreed that there is a lack of mutual trust, but added that because such a discussion did not seem possible at this time, MAC found it important to go directly to the people of Taiwan to explain their views. The majority, said Lai, support Ma's cross-Strait policy. If the DPP is truly concerned about the future of Taiwan, then they should take into account the views of its people. ECFA -------------- ¶7. (C) While there is consensus between SEF and ARATS to negotiate an ECFA, there still has been no decision made to put ECFA on the agenda for the next round of SEF-ARATS talks and it was unclear if there was sufficient time to do so, said Lai. Views have been exchanged on what general areas Taiwan would like to see included in an ECFA, but no specifics have been laid out, she added. Lai cautioned that mathematical models were limited and that any reports on the impact of an ECFA on the local economy would only be as good as the input variables used. She added that the Chunghua Institution for Economic Research (CIER) would report that ECFA would have a positive impact on Taiwan's GDP, but noted there would be reactions from various sectors to the report's conclusions. (Note: The CIER report will be reported septel. End note.) KMT-CCP Forum Will Not Replace SEF -------------- ¶8. (C) Although the recent newsmaking exchange of letters (reftel) between Hu Jintao, as CCP General Secretary, and Ma, sparked speculation that the KMT-CCP forum could become an important channel between the Ma administration and Beijing, Lai observed that the mechanisms and authorizations for cross-Strait agreements remained the same. Only SEF had the authority, said Lai, to negotiate and sign agreements on behalf of Taiwan with the mainland. MAC viewed the KMT-CCP cross-Strait forum as one of many normal and expected non-governmental exchanges. WANG