CALIBRATING THE U.S. RESPONSE ON BEEF AND HOW IT

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 000008 SIPDIS STATE FOR EAP/TC STATE PASS USTR FOR STRATFORD, ALTBACH, AND O'CONNOR, TREASURY FOR OASIA/WINSHIP AND JEWELL, NSC FOR LOI, COMMERCE FOR 4431/ITA/MAC/AP/OPB/TAIWAN, STATE PASS USDA FOR FAS/OSTA BLUM, BEAN, AND DAWSON; FAS/OCRA RADLER, BURDETT, AND BEILLARD; FAS/OFSO SALLYARDS; APHIS/IS AND VS; AND FSIS/HARRIES E.O. 12958: DECL: 01/04/2020 TAGS: EAGR ECON ETRD PREL TW SUBJECT: CALIBRATING THE U.S. RESPONSE ON BEEF AND HOW IT WILL AFFECT RELATIONS WITH TAIWAN, CROSS-STRAIT TIES AND MA'S PRESIDENCY REF: TAIPEI 001 TAIPEI 00000008 001.2 OF 003 Classified By: AIT Director Stanton. Reasons 1.4 b/d ¶1. (C) Summary: The U.S. response to the Legislative Yuan vote January 5 to prohibit the import of some U.S. beef products (septel) could complicate President Ma Ying-jeou's cross-Strait policy and his already shaky domestic political standing. A carefully calibrated U.S. response can ensure Taiwan pays the trade-related price for abrogating the recently signed bilateral beef protocol, while at the same time maintaining the broader bilateral relationship and vital U.S. regional interests. Given that Taiwan's failure to honor the protocol goes against international standards, bringing a case to the World Trade Organizatiton may be an effective way to pursue our concerns. End summary. -------------- TAIWAN IN A TIZZY OVER BEEF -------------- ¶2. (C) Even before the Legislative Yuan abrogated the beef protocol on January 5, growing signs of U.S. displeasure in the days before the vote triggered widespread concern here over the future of relations with the United States. Local media have been full of analysis about how the U.S. government might retaliate. Among concerns raised was whether the beef flap would go beyond the trade arena to encompass other issues such as U.S. arms sales or Taiwan's desire to enter the Visa Waiver Program. Immediately after the legislature's final action, AIT was inundated with calls from media seeking our reaction, indicated even more focus on the U.S. response in coming days. ¶3. (C) This debate represents a second round of angst here over bilateral relations in two months, the first coming when President Obama visited Beijing. Obama's comments and the U.S.-China joint statement were carefully parsed in Taiwan by politicians, academics and journalists wondering whether U.S. support for the island was fading under the new U.S. President. The opposition Democratic Progressive Party, for example, saw the assertion in the joint declaration that "respect of each other's sovereignty and territorial integrity" was fundamental to U.S.-China relations as a possible selling out of Taiwan. And many people here believed Washington was putting pressure on Taiwan to broaden the scope of its detente with China by expressing support in the joint declaration for increased cross-Strait dialogue on economics, politics and other fields. -------------- U.S. BEEF RESPONSE ON CROSS-STRAIT TIES -------------- ¶4. (C) At a general level, public polling indicates significant support for a cross-Strait policy that reduces tension with China. Still, many in Taiwan remain concerned that cross-Strait ties are warming too fast, and over time would give China significant political leverage over the island. Antonio Chiang, a popular columnist for the mass-circulation Apple Daily newspaper, recently wrote, "The Ma administration's mainland China policy is like a snowball rolling downhill. The speed of the opening is startling. It's creating a huge psychological shock to society and has caused an indescribable panic and anxiety for a lot of people." That's likely to increase as ECFA negotiations progress and critics worry about China's expanding economic influence and potential job losses among Taiwan farmers and laborers. TAIPEI 00000008 002.2 OF 003 ¶5. (C) Attuned to these concerns, Ma has repeatedly stated the importance of balancing his overtures to China with improved relations with the United States, Japan and Southeast Asian neighbors. His administration has provided a long list of areas in which it hopes to see progress with Washington: arms sales, an extradition agreement, entry to the U.S. Visa Waiver Program, Cabinet-level visits, and improved economic ties under the Trade and Investment Framework Agreement (TIFA). "We need U.S. support ... so we can tell our people we are taking a balanced position regarding the United States and China," according to Chen I-hsin, vice president of the Foundation on Asia-Pacific Peace Studies, a think tank close to the ruling Kuomintang. Other academics and officials close to Ma have expressed particular concern that Legislative Yuan rejection of the bilateral beef protocol may make it to more difficult to match progress in U.S.-Taiwan relations with improved cross-Strait ties. -------------- -- U.S. RESPONSE MAY AFFECT MA'S DOMESTIC STANDING -------------- -- ¶6. (C) A deterioration in U.S.-Taiwan relations brought about by the beef issue could affect President Ma's already shaky domestic political standing. A weak economy, the slow response to a killer typhoon in August, and concerns about Ma's governance style have helped keep his public approval ratings anemic. (Note: A mid-December poll by Global Views found the president's public trust rating at 38 percent and his public approval rating at 23.5 percent, both at or near lows. End note.) In contrast, one area in which Ma has claimed particular success is the trilateral relationship between Taiwan the United States and China, which he has argued has flourished under his leadership. At a December 31 meeting to discuss the beef fallout with the Acting Director, Foreign Minister Timothy Yang urged the U.S. government to keep its response modest and show the Taiwan public its good will. "Try to strengthen the hands of the President and the government, because the government is very friendly to the United States," he implored. (reftel) -------------- COMMENT: WHAT IT MEANS FOR THE UNITED STATES -------------- ¶7. (C) Beef has been the dominant U.S.-Taiwan economic issue for the past two years, and as such the U.S. response will have a significant effect on bilateral ties. Given the importance of the U.S. relationship to Taiwan, any deterioriation could affect the Ma administration's ability to implement policies in other areas, including his cross-Strait agenda. From President Obama on down, U.S. officials have applauded the warming of Taiwan-China relations under President Ma for reducing cross-Strait tensions. The future pace and scope of that detente will depend in part on how our beef response affects U.S.-Taiwan ties. ¶8. (C) In determining an appropriate beef response, the U.S. Government should consider making Taiwan suffer the consequences for violating the beef protocol while avoiding harm to the broader relationship with Taiwan and our vital interests in the region. One way to do this would be to ensure the beef controversy does not affect unrelated bilateral issues. Delaying the TIFA talks over beef imports has thus far not proved to be an effective strategy. Instead, TAIPEI 00000008 003.2 OF 003 we support maintaining TIFA as a vital forum for resolving irritants, including those in agriculture, and expanding ties with our 11th-largest trading partner. Since Taiwan's failure to honor the bilateral beef protocol also contravenes international standards, the World Trade Organization (WTO) may be another more effective vehicle for pursuing U.S. concerns on beef. Taiwan also would find sobering continued reminders that the U.S. Government has provided strong support for its entry into international organizations such as the WTO and the Asia Pacific Economic Cooperation forum. Continuing to note that the World Animal Health Organization (OIE) -- to which Taiwan also belongs -- has concluded all U.S. beef is safe to eat, we should remind Taiwan we expect it to bear the responsibilities and practical consequences that come with membership in such groups. STANTON