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

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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