US embassy cable - 05TAIPEI773

C O N F I D E N T I A L SECTION 01 OF 03 TAIPEI 000773 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 02/01/2015 
TAGS: PREL, PGOV, CH, TW, Cross Strait Politics 
SUBJECT: CHEN-SOONG REACH AGREEMENT ON PRINCIPLES, DIFFER 
ON DETAILS 
 
 
Classified By: AIT Director Douglas Paal, Reason: 1.4 (B/D) 
 
1. (C) Summary: President Chen Shui-bian and People First 
Party (PFP) Chairman James Soong met on February 24 and 
signed a ten-point joint statement pledging to promote 
cross-Strait stability, maintain the "ROC" status quo, and 
enhance Taiwan's defense capabilities.  In a joint press 
conference held immediately after their two-hour meeting, 
Chen and Soong promised to move beyond past partisan and 
ethnic divisions.  However, the two leaders offered very 
different views on the Special Defense Procurement Budget, 
Beijing's Anti-Secession Law, "name rectification," and 
Taiwan sovereignty.  Privately, officials from both sides 
tell AIT that the meeting set a positive atmosphere, but left 
a number of contentious issues to be worked out at the staff 
level.  Democratic Progressive Party (DPP) officials say they 
do not expect the meeting to usher in a new era of DPP-PFP 
cooperation, but they are hopeful that it will weaken the 
opposition's unity and resolve to block the government's 
legislative agenda.  End Summary. 
 
Chen-Soong Ten Points 
--------------------- 
 
2. (C) After a week of increasingly fevered media 
anticipation, President Chen Shui-bian and PFP Chairman James 
Soong on February 24 held a two-hour long private meeting. 
Afterwards, they issued a ten-point joint statement (see para 
11) affirming the two leaders' commitment to maintain 
Taiwan's status under the "ROC" constitution, promote closer 
cross-Strait economic relations, enhance Taiwan's defense 
capabilities, and resolve internal partisan and ethnic 
tensions.  The statement endorsed Chen's call for 
constitutional reform but stated that any future changes to 
the "ROC" constitution would be conducted under current 
procedures and would not "touch on national sovereignty or 
territory or alter the cross-Strait status quo."  The 
statement also spelled out Chen's May 20, 2000 "five no's" 
pledge (Note: Chen did not explicitly restate the "five no's" 
pledge during his 2004 inaugural address, reportedly at the 
behest of pro-independence supporters.  End Note.) 
 
3. (C) The format for the meeting and contents of the joint 
statement were agreed upon in advance between Presidential 
Office Deputy Secretary General James Huang (Chih-fang) and 
PFP Policy Chief Vincent Chang (Hsien-yao) after a week of 
negotiations.  After the February 24 meeting, Chen and Soong 
held a joint press conference to explain their positions on 
the ten-point statement.  In his opening statement, President 
Chen asserted that the meeting demonstrated that the ruling 
and opposition parties could cooperate for the public good 
without sacrificing their ideals and basic principles.  Soong 
stated that the meeting represented a first step towards 
resolving ethnic tensions at home and confrontation across 
the Taiwan Strait. 
 
"One Republic of China, Different Interpretations" 
--------------------------------------------- ----- 
 
4. (C) Despite their joint statement and public commitment to 
maintain friendly relations, the two leaders offered very 
different positions during questioning from Taiwan reporters. 
 Soong made a pointed reference to Chen's past assertion that 
"the Republic of China is Taiwan" by remarking several times 
that "The Republic of China is the Republic of China, there 
is no need to elaborate any further."  In response, President 
Chen stated that Taipei's bottom line is that "The Republic 
of China is an independent, sovereign country that belongs to 
the 23 million people of Taiwan."  Chen and Soong also 
offered very different interpretations over the government's 
willingness to pursue "name rectification."  Soong claimed 
that the two agreed to put a hold on recent moves, while Chen 
stated clearly that he will continue to advocate changing the 
names of government-owned institutions (Note: from "China" to 
"Taiwan") in order to avoid "unnecessary public confusion." 
 
Defense: Agreeing to Disagree 
----------------------------- 
 
5. (C) Chen and Soong also offered divergent interpretations 
of their "agreement" on defense modernization, with Chen 
emphasizing the need to accelerate defense procurement (point 
number seven), and Soong the importance of avoiding a 
cross-Strait arms race (point number eight).  Soong told 
reporters that the PFP's "opposition to the 610.8 billion 
(New Taiwan) dollar special budget remains unchanged."  Soong 
noted that he recently discussed the procurement budget with 
U.S. Deputy Undersecretary of Defense Richard Lawless for two 
and a half hours, and made it clear that the PFP would not 
agree to the special budget package as currently crafted. 
Soong said he also rejected USG warnings that the 
cross-Strait military balance is shifting in Beijing's favor. 
 "We can never expect to keep parity with the Mainland, they 
are a nuclear power and we can not become one," he commented. 
 
 
6. (C) Nevertheless, Soong said that the PFP accepts the need 
for foreign arms procurement and would be willing to hold 
further discussions with the government over a scaled-down 
defense procurement package.  PFP Policy Chief Chang later 
told AIT that the two leaders only discussed the special 
procurement budget in general terms, but Soong accepted 
Chen's offer to have Minister of National Defense Lee Jye 
provide a private briefing to the PFP leader on the details 
of the budget package. 
 
Cross-Strait Issues: Continued Friction 
--------------------------------------- 
 
7. (C) While the joint statement affirmed Chen's past calls 
for a mechanism to ensure cross-Strait peace and stability, 
officials from both sides told AIT that a number of related 
issues were left unresolved.  In a pre-brief to the Director 
on February 23, Presidential Office Deputy SecGen Huang said 
that the president was reluctant to accept the PFP's request 
to substantially revise the 2001 Economic Development 
Advisory Council (EDAC) recommendations on cross-Strait 
economic policy.  The final text (point number five) split 
the difference, offering to consider updating the EDAC 
recommendations in order to achieve the organization's 
objectives. 
 
8. (C) The two sides were also unable to resolve differences 
on the cross-Strait political front.  Soong declined Chen's 
request to make a joint statement opposing the PRC's 
Anti-Secession Law, according to the PFP's Chang.  Chang said 
that Chen similarly rejected Soong's recommendation that 
Taipei take a low-key stance on the PRC initiative in order 
to avoid exacerbating cross-Strait tensions.  During the 
press conference, Soong pointedly blamed actions taken by 
Taiwan over the past two years for Beijing's decision to 
enact the Anti-Secession Law.  When asked by reporters for 
his comment on the PRC law, Chen reiterated his veiled 
warning to hold a public referendum or pass countervailing 
legislation.  However, Chen claimed that he has tried to 
restrain public reactions in Taiwan, including by instructing 
officials in his government not to publicly link the February 
19 U.S.-Japan Joint Security Policy Statement with Beijing's 
moves on the Anti-Secession Law, but successfully making the 
linkage with this remark. 
 
Next Steps 
---------- 
 
9. (C) Officials on both sides say that the February 24 
meeting is only a symbolic first step in establishing a 
working relationship between the DPP and PFP.  The PFP's 
Chang told AIT after the meeting that he and the Presidential 
Office's Huang would meet again in the coming days to discuss 
a number of specific policy issues, including possible DPP 
support for the PFP's proposed "Cross-Strait Peace Law." 
Chang dismissed media rumors that Soong would meet formally 
with KMT Chairman Lien Chan.  Chang told AIT that the two 
Pan-Blue leaders may talk informally by phone, but there 
would be no public interaction between them for the 
foreseeable future. 
 
Comment: Form Over Substance 
---------------------------- 
 
10. (C) For both sides, the February 24 meeting was more 
important for its symbolism than its substance.  Chen's 
promises over the status quo and cross-Strait stability were 
lifted almost verbatim from his public speeches of May 20 and 
October 10 of last year.  They were also tempered by his 
renewed commitment on "name rectification" and warnings over 
the Anti-Secession Law.  Similarly, Soong gave no ground over 
his party's stance on the special defense procurement budget. 
 Nevertheless, this is the first time since the disputed 
March 20, 2004 election that an opposition leader has been 
willing to meet with Chen in his capacity as president. 
Whether this symbolic first step will be followed by actions 
on the Legislative Yuan floor may hinge on how effectively 
Soong can sell his proposed partnership to his "deep Blue" 
support base.  Regardless, the meeting significantly weakens 
the unity of the Pan-Blue opposition by increasing suspicions 
between the two Blue chieftains, PFP Chairman Soong and KMT 
Chairman Lien. 
 
Ten-Point Statement 
------------------- 
 
11. (SBU) The following is an informal AIT translation of the 
Chen-Soong 10-point agreement: 
1) The country's sovereign status as defined by the ROC 
Constitution should be recognized and respected by the two 
sides of the Taiwan Strait and the international community. 
 
2) The highest principles for cross-Strait relations should 
be respecting the Constitution, maintaining the status quo, 
and working together to create cross-Strait peace.  President 
Chen has promised not to declare independence, nor will he 
change the nation's title, include the "state-to-state" 
theory in the constitution, hold a referendum on independence 
or unification, or abolish the National Unification 
Guidelines. 
 
3) Constitutional reform should enhance the nation's 
competitiveness and the government's efficiency.  Both Chen 
and Soong agreed that such reform should not change the 
nation's sovereignty, territory, or the status quo in the 
Taiwan Strait. 
 
4) A mechanism to ensure cross-Strait peace should be 
established through legislative procedures.  Military threats 
or pressure on Taiwan's international space will not improve 
cross-Strait relations. 
 
5) The two sides of the Taiwan Strait should continue to 
promote economic, cultural, and academic exchanges and begin 
talks to facilitate direct cross-Strait cargo flights.  The 
government's ban on the three direct transportation links 
should be reviewed and adjusted as soon as possible.  It has 
already been three years since the EDAC met to discuss ways 
to improve Taiwan's economic competitiveness, thus it may be 
necessary to review and revise its guidelines in order to 
achieve the EDAC goal of "deepening Taiwan, globalizing the 
economy." 
 
6) Any change to the Taiwan Strait status quo requires the 
agreement of the 23 million people of Taiwan.  On the basis 
of cross-Strait goodwill, we do not rule out any form of 
future relationship between the two sides of the Taiwan 
Strait. 
 
7) Taiwan must have an adequate national defense to ensure 
peace in the Taiwan Strait.  Taiwan should purchase the 
weapons it needs according to its strategic goals of ensuring 
national security and cross-Strait stability. 
 
8) Taiwan has no intention of entering into a cross-Strait 
arms race.  In order to ease cross-Strait tensions, the two 
sides should actively promote cross-Strait 
confidence-building measures. 
 
9) Discriminatory speech and actions against any ethnic 
groups should be restricted and sanctioned by law in the 
spirit of equality under the Constitution.  A legal framework 
should be established to protect the rights and interests of 
different ethnic groups. 
 
10) Both Chen and Soong promised to dedicate themselves to 
eliminating ethnic confrontation and promoting ethnic harmony. 
PAAL