US embassy cable - 05TAIPEI96

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 000096 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 01/11/2015 
TAGS: EAIR, PREL, CH, TW 
SUBJECT: IT'S POLITICS FIRST AS TAIWAN DRAGS ITS FEET ON 
CHARTER FLIGHTS 
 
 
Classified By: AIT Director Douglas H. Paal.  Reason: 1.4 (B,D) 
 
Taipei 00043 
 
1.  (C) In response to the high-profile visit by opposition 
Kuomintang (KMT) leaders to Beijing over the last few days to 
discuss cross-strait relations with the Chinese Taiwan 
Affairs Office (TAO), and the announcement of an 
understanding on direct Taiwan-China flights during the 
Chinese New Year, the Taiwan Government is running hard to 
catch up and regain the lead on cross-Strait negotiations. 
Taiwan government officials dismiss the KMT visit as useless 
and call for a "second round" of China-Taiwan charter flight 
negotiations based on a "first round" reportedly held last 
Friday in Macao.  Taiwan, however, insists that future 
negotiations must include Taiwan government officials, 
otherwise Taiwan will fall back to "Plan B" -- resurrecting 
the Spring 2003 modus operandi by which Taiwan airlines 
applied for, and received, permission to fly charter flights 
to Mainland Chinese cities. 
 
2.  (C) Taiwan,s Mainland Affairs Council (MAC) Vice 
Chairman Chiu Tai-san announced at a press conference on 
January 10 that Taiwan and Mainland China representatives had 
met last Friday, January 7, in Macao to negotiate on 
cross-strait charter flights around the Chinese New Year, 
February 9.  The negotiations, he said, were based on the 
three principals of two-way, reciprocal, and direct 
(non-stopover) flights.  He expressed the hope that a "second 
round" of bilateral discussions would be held "as soon as 
possible," which should be based on the "2002 Hong Kong 
model" by which Hong Kong and Taiwan had worked out a flight 
agreement.  The rest of the day, MAC officials remained 
incommunicado and unresponsive to AIT queries because, as one 
MAC staffer candidly told us, they were "sitting in front of 
the television" watching reports from Beijing of the KMT 
delegation visit. 
 
3. (C)  MAC Chairman Joseph Wu told AIT on January 11 that 
the Taiwan government had authorized Taipei Airlines 
Association (TAA) Chairman Michael Lo to present its charter 
flight proposal on air routes, number of flights, airline 
companies, airports, and security issues to Chinese 
representatives in Macao.  The Chinese side responded, he 
said, that they would study the Taiwan proposals.  Wu hailed 
the Macao talks as "a significant step forward" because 
Chinese officials had met directly with Taiwan government 
officials in the TAA delegation, indicating that China will 
now meet with Taiwan government officials.  Future 
negotiations, which he termed the "second round," must 
proceed on the basis of the 2002 "Hong Kong model" (the 
negotiations between Hong Kong and Taiwan on reciprocal air 
services.  TAA can lead the delegation "as a front for 
government officials" in the delegation. 
 
4.  (C) Wu insisted that the KMT negotiations in Beijing 
meant "nothing at all."  Taiwan is working to ensure that the 
Chinese side will talk directly with Taiwan officials, but 
the KMT undermined that effort, he lamented bitterly, by 
publicly stating there was no need for government officials 
to be involved and even that there was, in fact, no need for 
negotiations.  The Chinese offer to expand the number of 
airports for direct charter flights to include Taichung, 
moerover, was "fake," he argued, because China knew full well 
this was a non-starter for security reasons (Note: presumably 
the large Taiwan Air Force base in Taichung. End Note). 
Rather, China must negotiate directly with Taiwan based on 
the Hong Kong model, otherwise Taiwan will fall back on "Plan 
B," using the Chinese New Year 2003 model in which only 
Taiwan air carriers flew to the mainland. 
 
5.  (C) Comment.  With the Monday meeting between the KMT 
delegation led by LY members Tseng Yung-chuan and Chang 
Hsiao-yen and PRC officials, the next move is clearly 
Taiwan,s, specifically Taiwan,s DPP government.  Some 
technical considerations remain to be worked out, including 
whether or not the flights will have to pass through a third 
territory,s airspace, the participation of Chinese airlines, 
and whether passengers will be restricted to Taiwan 
businesspeople in the PRC.  But the key issue comes down to a 
single question -- how badly does the DPP want to negotiate 
these details in formal meetings that include government 
officials? 
 
6.  (C) Beijing and the KMT delegation have forced the DPP 
government,s hand by offering charter flights that meet most 
of both sides, demands.  However, the PRC is prepared to 
move forward based only on consultations between Taiwan and 
PRC airline associations that would exclude officials.  The 
Taiwan government had tried to keep the upper hand by 
maneuvering the PRC into a position where it would have to 
turn down Taiwan,s offer for charter flights after bilateral 
consultations or accept Taiwan's "officiality," but appears 
to have been outmaneuvered itself. 
 
7.  (C) The cross-Strait charter flights have become totally 
enmeshed in Taiwan,s post-election domestic politics between 
the DPP and its main opposition party, the KMT.   The DPP 
government is between a rock and a hard place.  If it accepts 
the PRC-KMT offer, it will forego what now appears to be one 
of the primary political goals of the charter flight exercise 
-- bilateral meetings between PRC and Taiwan officials 
(without official status, but with official sanction).  It 
will also hand a major political victory to the KMT, which 
will be able to claim credit for the flights and cast the DPP 
as a party unable to improve cross-Strait relations.  If the 
government turns down the offer, it will help the KMT portray 
the DPP as the cause of increasing cross-Strait tension.  The 
pro-independence TSU has been highly critical of the KMT move 
bypassing the government, but with the prospects of 
successful charter flights this criticism may not resonate 
with Taiwan,s political center. 
PAAL