US embassy cable - 05TAIPEI618

C O N F I D E N T I A L TAIPEI 000618 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 02/01/2015 
TAGS: PREL, PGOV, CH, TW, Cross Strait Politics 
SUBJECT: TAIWAN ACCEPTING DOWNGRADE TO WTO DELEGATION? 
 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
1. (C) Former National Security Council (NSC) Senior Advisor 
Lai Hsin-yuan told the Director on February 15 that there are 
indications that current NSC Secretary General Chiou I-jen, 
on his own authority, accepted a PRC demand to downgrade the 
diplomatic status of Taiwan's WTO delegation.  Lai, who 
played a key role on WTO policy until last May, said that 
Taiwan's Geneva representative, Yan Ching-chang, cut a deal 
with WTO Secretary General Supachai Panitchpakdi to remove 
references to diplomatic titles from the Taiwan listing in 
the WTO Blue Book (diplomatic directory).  Under the reported 
deal, Taiwan's WTO delegation would no longer be afforded 
formal diplomatic titles and Taipei would agree to remove 
references to central government institutions from documents 
submitted to WTO committees.  (Comment: the Secretariat 
stopped updating the WTO's Blue Book in 2002 after Beijing 
demanded that Taiwan's delegation be stripped of its full 
diplomatic privileges, which are provided by the Swiss 
government as the WTO host country.  End Comment). 
 
2. (C) Lai said that she learned from unspecified sources 
that Chiou and Foreign Minister Mark Chen authorized Yan to 
negotiate over the status issue with Supachai as Yan saw fit. 
 She told the Director that after hearing about the move, she 
confronted FM Chen, who confirmed that Yan was, in fact, 
authorized to settle the issue.  According to Lai, Chen said 
he was unaware of the full background of the issue and thus 
deferred to Chiou's judgment.  Lai urged the Director to warn 
Foreign Minister Chen against accepting Chiou's proposal. 
The Director responded that AIT was not in a position to 
intervene on the matter, but said, in light of past Taiwan 
requests for U.S. assistance on this issue, he would ask the 
Foreign Minister for an explanation on the matter. 
 
3. (C) Lai said she was furious over both the substance of 
the reported concession and the process by which it was 
reached.  Lai told the Director that had Chiou consulted 
officials familiar with the issue, he would not have allowed 
Yan to cave in.  Lai added that this episode is typical of 
the Chiou approach to policy coordination.  Lai, who was just 
elected to the Legislative Yuan (LY) on the Taiwan Solidarity 
Union (TSU) ticket, said that she and a group of concerned 
Pan-Blue legislators would publicly criticize the government 
for caving in to Supachai's demands after the LY reconvenes 
on February 25. 
 
4. (C) Separately, former NSC Deputy Secretary General and 
current Chung-hwa Institute for Economic Research (CIER) Vice 
President Chang Jung-feng assigned more blame for the 
concession to Yan than Chiou.  He told AIT that Yan's 
attempts to cultivate Supachai socially backfired, allowing 
Supachai to win concessions from Taiwan rather than the other 
way around.  Chang added that Supachai has been pressing Yan 
for a concession on the Blue Book issue for personal reasons. 
 According to Chang, Supachai plans to take a lucrative 
position in a Shanghai development project after he leaves 
office this summer.  Providing Beijing with a win on the 
Taiwan status issue before his departure would increase his 
cache with his new employers, Chang added. 
 
Comment: The Whole Story? 
------------------------- 
 
5. (C) Given the USG's active role in supporting Taiwan's 
right to equal participation at the WTO, it would be odd for 
Taiwan to offer such major concessions without first 
notifying us.  Nevertheless, Lai's characterization of Chiou 
and Yan's role is consistent with other information we have 
seen in recent months.  Chiou is tightening information loops 
in a number of policy areas, especially on cross-Strait 
issues.  For his part, Yan has developed a reputation in 
Taipei for putting style ahead of substance, and many suspect 
his reported close personal relationship with Supachai may 
compromise Taiwan's interests.  Of course, Lai may not have 
the entire picture.  Also, her views may be colored by the 
fact that Chiou dismissed her from the NSC after he took over 
last May.  AIT will continue to engage senior MOFA and NSC 
officials to gain further insights. 
PAAL