Identifier
Created
Classification
Origin
10BEIJING19
2010-01-06 08:25:00
CONFIDENTIAL
Embassy Beijing
Cable title:  

BEIJING VIEWS ON FOURTH ROUND OF CROSS-STRAIT TALKS

Tags:  ETRD EFIN CH TW 
pdf how-to read a cable
VZCZCXRO1456
PP RUEHCN RUEHGH
DE RUEHBJ #0019/01 0060825
ZNY CCCCC ZZH
P 060825Z JAN 10
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 7512
INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY
RHHJJPI/PACOM IDHS HONOLULU HI PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEHIN/AIT TAIPEI PRIORITY 7461
C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 000019 

SIPDIS

STATE FOR EAP/CM, EAP/TC, EAP/EP, EEB/TPP/BTA
STATE PASS USTR FOR STRATFORD AND ALTBACH
TREASURY FOR OASIA/WINSHIP AND PISA
NSC FOR LOI
COMMERCE FOR ITA/MAC/AP

E.O. 12958: DECL: 01/05/2020
TAGS: ETRD EFIN CH TW
SUBJECT: BEIJING VIEWS ON FOURTH ROUND OF CROSS-STRAIT TALKS

REF: (A) 09 AIT TAIPEI 1527 (B) 09 AIT TAIPEI 1523
(C) 09 TAIPEI 1527

Classified By: Classified By: Econ Minister Counselor William Weinstein
. Reasons: 1.4 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 000019

SIPDIS

STATE FOR EAP/CM, EAP/TC, EAP/EP, EEB/TPP/BTA
STATE PASS USTR FOR STRATFORD AND ALTBACH
TREASURY FOR OASIA/WINSHIP AND PISA
NSC FOR LOI
COMMERCE FOR ITA/MAC/AP

E.O. 12958: DECL: 01/05/2020
TAGS: ETRD EFIN CH TW
SUBJECT: BEIJING VIEWS ON FOURTH ROUND OF CROSS-STRAIT TALKS

REF: (A) 09 AIT TAIPEI 1527 (B) 09 AIT TAIPEI 1523
(C) 09 TAIPEI 1527

Classified By: Classified By: Econ Minister Counselor William Weinstein
. Reasons: 1.4 (b) and (d).


1. (C) SUMMARY: Association for Relations Across the Taiwan
Strait (ARATS) Vice Secretary General Ma Xiaoguang said that
of the three agreements signed in the December 21-23 Straits
Exchange Foundation (SEF)-ARATS talks in Taichung, the one on
agriculture was most likely to benefit Taiwan as it opened
mainland markets to Taiwan products, but not vice-versa. The
failure to sign a double taxation agreement was due to
Taipei's slow movement, but both sides will continue to seek
an agreement. The talks included an "exchange of principles"
on how to conduct Economic Cooperation Framework Agreement
(ECFA) negotiations, but no target completion date was set.
Ma assessed DPP opposition as getting stronger in Taiwan, and
said Taiwan President Ma Ying-Jeou's failure to handle
various crises in Taiwan over the past year had undermined
his public support. Beijing wants to engage Taiwan in
political discussions, but will respect President Ma's
unwillingness to do so at the current time. Nonetheless,
deepening economic discussions will "inevitably" lead to
political exchanges, Ma Xiaoguang assessed. END SUMMARY.

FOURTH ROUND OF ARATS-SEF TALKS
--------------


2. (C) Meeting with the Acting DCM December 29, ARATS Vice
Secretary General Ma Xiaoguang provided Beijing's take on the
recently concluded ARATS-Straits Exchange Foundation (SEF)
discussion in Taichung (reftels). The three agreements
signed, on fishing industry labor issues, agricultural
produce, and industrial standards, were "quite technical."
The agricultural inspections and quarantines agreement would
be of particular benefit to Taiwan, Ma suggested, as it
opened the Mainland to Taiwan produce, but involved no
reciprocity from Taiwan. (Comment: This appears to be an
effort to woo Taiwan's rural voters, who are more likely to
support the DPP. End Comment.)


3. (C) On the failure to sign an agreement on

double-taxation, Ma laid the blame on the Taiwan side.
Taiwan did not decide until October 2009 to hold talks on the
topic, and the Legislative Yuan was still reviewing the
relevant regulations in order to authorize executive agencies
to draft flexible taxation rules for Mainland enterprises.
Therefore negotiations started too late to deal with all the
technical issues involved in time for an agreement by
December, Ma said. "More time is required," but both sides
agreed to make efforts to sign a double taxation agreement in
the future. Ma noted that the Mainland had already
unilaterally waived some taxes on Taiwan's maritime and
airline companies, but Taiwan has not reciprocated.


4. (C) Ma commented that in discussions on expanding
transportation rights (ref B and C),the Mainland had been
unwilling to discuss fifth freedom rights as the original
deal permitting direct travel between the Mainland and Taiwan
stipulated that travelers carry "mutually recognized
certificates," rather than passports, making it impossible
for travelers to continue on to any other country outside the
Mainland or Taiwan.

WORKING TOWARDS ECFA
--------------


5. (C) There was only "an exchange of principles" on the
Economic Cooperation Framework Agreement (ECFA) at the talks.
Ma said the two sides did not discuss the content of such an
agreement. The principles discussed include the following:
negotiations will be conducted "on an equal footing" and an
ECFA will be WTO compliant. The negotiations will be
conducted by government officials from both sides, working
within the SEF/ARATS framework. ARATS and SEF agreed that
ECFA should be a "major topic" in the fifth round of talks,
expected in June, and that experts' consultations on a
framework should begin soon. According to Ma there is a

BEIJING 00000019 002 OF 002


"mutual willingness" to sign an ECFA as soon as possible, but
negotiations will be complex, and Ma was unwilling to name a
fixed date for projected completion.


HARD WORDS FOR DPP AND KMT
--------------


6. (C) Offering his "personal view," Ma offered an assessment
of the politics in Taiwan around the talks. The Democratic
People's Party's (DPP) opposition to cross-Strait
negotiations has become stronger and more effective. It was
now "misleading the public" by erroneously claiming that
bilateral agreements will only help "big capitalists." The
main reason the DPP had been effective with this line of
argument was due to the international financial crisis, Ma
assessed. He also freely criticized Taiwan president Ma
Ying-jeou. President Ma "has not done a good job of handling
the economy," and for this and other reasons his leadership
"is not satisfactory to many in Taiwan. He said Ma's
inability to handle these issues has eroded support for
initiatives such as ECFA because people do not believe he can
secure a good deal on their behalf.

PACE AND CONTENT OF CROSS STRAIT RELATIONS
--------------


7. (C) Ma said that although cross-Strait relations developed
relatively quickly in 2009, a slower pace would be acceptable
as long as the two sides maintained momentum in the
discussions. Although in his inaugural address Ma Ying-jeou
said he wanted political negotiations with the Mainland and a
peace agreement, changes in Taiwan over the past year have
forced Ma to push less actively for this. The Mainland would
like to start political negotiations "at an early stage," but
would not promote them against Ma Ying-jeou's will. In the
meantime, the Mainland will work to strengthen the basis for
political negotiations under the 1992 consensus. Deepening
economic relations will inevitably lead to more complicated
political issues, Ma continued, and Beijing and Taipei will
need mutual "political trust" to address these. Ma also
reflected on growing economic ties, saying Beijing "realized"
that "even the rapid growth of economic ties will not lead to
unification naturally."

ARATS and TAO
--------------


9. (C) Ma explained that ARATS is officially a "social
organization" registered with the Ministry of the Interior
(Note: This probably refers to the Ministry of Civil Affairs.
End Note). However, ARATS is physically co-located with the
Taiwan Affairs Office (TAO),occupying one floor of the TAO's
office building. Ma noted that in addition to his position
as a Vice Secretary General at ARATS, he is also Director
General of the TAO's Comprehensive Bureau. The Acting DCM's
meeting was arranged through the TAO's External Affairs
Office. (Comment: Ma clearly did not view his overlapping
roles or ARATS and TAO's co-location as a sensitive topic,
making no effort to maintain the fiction that ARATS is a
non-governmental organization. End Comment)
GOLDBERG