US embassy cable - 05TAIPEI1796

C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 001796 
 
SIPDIS 
 
STATE PASS AIT/W 
 
E.O. 12958: DECL: 04/13/2015 
TAGS: PREL, PGOV, TW 
SUBJECT: TAIWAN NEGLECTING CENTRAL AND EASTERN EUROPE 
 
 
Classified By: AIT Director Douglas Paal; Reasons: 1.4 (B/D) 
 
1. (C) Summary: Taiwan is neglecting Central and Eastern 
Europe in favor of traditional European Union (EU) members in 
the west.  Despite substantial efforts by Central and Eastern 
European governments to promote ties with Taipei, Taiwan 
Ministry of Foreign Affairs (MOFA) officials told AIT that 
these nations have little influence in the EU and Taipei has 
no plans to significantly engage Central and Eastern Europe. 
Diplomats from new EU member countries in Taipei assert that 
Taiwan is making a significant strategic miscalculation and 
say that growing economic ties between Taipei and Central and 
Eastern Europe are primarily due to their own government's 
initiatives.  Taiwan's relationship with new EU members has 
also been stymied by the Chen Shui-bian administration's 
independence rhetoric and eagerness to publicize Taipei's 
foreign policy victories for political gain, which has drawn 
the ire of Beijing.  As a result, Taipei appears to have lost 
an opportunity to counter the PRC's growing influence in the 
EU as Central and Eastern European nations have distanced 
themselves from Taiwan in favor of Beijing.  Taiwan's foreign 
policy towards Central and Eastern Europe is yet another 
example of Taipei's inability to formulate a viable strategy 
to counter the PRC and advance its own diplomatic standing 
around the globe.  End summary. 
 
MOFA Ignoring New EU Members 
---------------------------- 
 
2. (C) MOFA officials are focusing their European foreign 
policy strategy on Western Europe on the grounds that Central 
and Eastern Europe have little influence in the EU.  MOFA's 
Section Chief for Central and Eastern Europe, Patrick Chu, 
told AIT that Taipei is not devoting many resources to new EU 
members in the east because they have little power when 
compared to France and Germany.  Chu assured AIT that Taiwan 
has many initiatives focused on Europe.  He said there are 
five Taiwan friendship groups in the EU Parliament and Taipei 
annually invites about 300 legislators from Europe to visit 
Taiwan.  However, when asked if any of these initiatives are 
specifically tailored towards Central or Eastern Europe, Chu 
said they were focused on Western Europe and hardly mentioned 
Central and Eastern Europe.  Chu told AIT that Taiwan 
maintains some representatives offices in Central Europe, but 
that there are no plans to open new offices in Eastern 
Europe.  He added that PRC pressure is increasing in Europe 
and now EU nations will not allow high-ranking Taiwan 
political officials to visit. 
 
Central/Eastern Europe Taking the Initiative 
-------------------------------------------- 
 
3. (C) Central and Eastern European diplomats in Taipei 
assert that Taiwan has foolishly paid scant attention to the 
region.  The Hungarian Trade Office's Chief Representative, 
Sandor Matyus, told AIT that Central Europe has been 
substantially more proactive than Taiwan in working to 
establish ties and argued that Taiwan needs to pay more 
attention to Central and Eastern Europe.  Poland's Chief 
Representative, Tomasz Nowacki, echoed Matyus and said that 
Taipei has never offered much to Central and Eastern Europe. 
He said this is a serious mistake on Taiwan's part and he 
opined that Taipei overly relies on the U.S., which is, in 
his mind, a "poor" foreign policy.  Slovakia's Economic and 
Cultural Office Representative, Jan Bratko, agreed with the 
other diplomats and told AIT that although his office only 
opened last year in Taipei, there is not yet any direct 
investment from Taiwan in Slovakia.  He added that Central 
and Eastern European governments believe that they should be 
closer to Taipei, but that Taiwan is not engaging the region. 
 Even MOFA's Chu said that Central and Eastern European 
countries are very proactive towards Taiwan and are 
sympathetic to Taiwan's emerging democracy and anti-Communist 
stance. 
 
Also Hurt By Chen's Foreign Policy 
---------------------------------- 
 
4. (C) Central and Eastern Europe's desire for closer ties 
with Taiwan is also being hindered by the Chen 
administration's practice of publicizing Taipei's foreign 
policy activity for domestic political gain.  Hungary's 
Matyus told AIT that the Democratic Progressive Party's (DPP) 
practice of leaking information to the press has made a close 
relationship with Taipei difficult for Budapest.  Matyus said 
in 2002 Vice President Annette Lu was permitted to visit 
Budapest for a conference on democracy as long as Taipei 
agreed to be discreet.  However, Matyus said the Chen 
administration loudly publicized the visit as a victory for 
Taiwan, which caused many problems for Hungary.  Matyus told 
AIT that Beijing protested and retaliated against Budapest. 
Matyus added that Budapest was burned by the DPP and that 
such a visit will not be permitted ever again.  He said that 
Hungary wants more contact with Taiwan, but that this is not 
possible because the DPP will not be discreet in its foreign 
policy, which is necessary to avoid problems with the PRC. 
 
5. (C) Poland's Nowacki agreed that dealing with Taiwan has 
become more difficult under the Chen administration.  He said 
that the Chen administration too often uses Taipei's foreign 
policy for public relations.  For example, Nowacki told AIT 
that previously under the KMT, Poland and Taiwan had 
unpublicized and discreet legislative and political 
exchanges.  However, he lamented that such visits are 
virtually impossible now because they would be publicized in 
advance by the Chen administration and loudly touted as a 
political victory, which would draw protests from Beijing. 
Nowacki added that under the KMT, Taiwan's foreign policy was 
more pragmatic and realistic.  Under the DPP, however, 
Taiwan's foreign policy methods are counterproductive and 
Chen's independence rhetoric is hurting Taiwan.  Nowacki said 
that Taipei's lack of a pragmatic foreign policy makes it 
difficult to help Taiwan, not just in Europe, but throughout 
Asia.  He said many of his colleagues say Taiwan is a trouble 
maker and privately admitted that Warsaw would offer more 
support to Taiwan if Taipei took a more moderate approach and 
paid more attention to Poland. 
 
PRC Taking Advantage 
-------------------- 
 
6. (C) Beijing is capitalizing on Taiwan's decision to snub 
Central and Eastern Europe and the region's dissatisfaction 
with the Chen administration.  Central and Eastern European 
governments are looking to the PRC for economic ties and 
political accords at Taiwan's expense.  Hungary's Matyus told 
AIT that after the fiasco caused by Vice President Lu's visit 
in 2002, Budapest began looking to Beijing.  He said Hungary 
and the PRC have exchanged official visits, and in 2004, 
Budapest and Beijing and signed a joint communiqu in which 
Hungary pledged not to have any official contact with Taiwan. 
 Slovakia's Bratko argued that Taiwan's foolish European 
foreign policy has caused Central and Eastern Europe to look 
to Beijing because the PRC is paying more attention to the 
region than Taipei.  He added that the value of Taiwan's 
commercial expertise, one of its most valuable bargaining 
chips, is declining.  According to Poland's Nowacki, Taiwan 
should have taken advantage of Central Europe's sympathy to 
Taiwan and lamented that Taipei is doing everything not to 
survive. 
 
Economic Ties Still Growing 
--------------------------- 
 
7. (C) Despite Taipei's almost exclusive focus on the west, 
economic ties between Taiwan and the east are growing because 
of Central and Eastern Europe's efforts.  Each of the 
European diplomats AIT met with agreed that their own 
government was the main driver in the economic relationship 
with Taiwan.  According to Poland's Nowacki, Taipei exports 
to Poland last year totaled around $250 million USD.  For 
Hungary, trade is also growing and last year the total value 
of trade between Taiwan and Hungary was about $400 million 
USD.  Matyus said that Hungarian exports consist mostly of 
electronics and that Budapest is seeking Taiwanese Foreign 
Direct Investment (FDI).  He said last year there was 
$150-200 million USD of FDI in Hungary from Taiwan.  While 
Slovakia's Bratko has had little success thus far luring 
Taiwanese FDI, he expects to spend much of his time in Taipei 
lobbying Taiwan businesses and encouraging investment. 
Bratko said that the high-tech industry is very important for 
Bratislava and the future of the Slovak economy. 
 
Czech Republic Lone Bright Spot 
------------------------------- 
 
8. (C) Taipei's relationship with the Czech Republic is the 
lone bright spot for Taiwan in Europe.  According to Michal 
Kral, the representative from the Czech Republic's Economic 
and Cultural Office in Taipei, however, the strength of the 
relationship is primarily due to Prague's efforts to engage 
Taiwan and encourage close ties.  Kral told AIT that after 
the fall of communism, Prague believed that Taiwan's economy 
was complementary to the Czech Republic and Prague adopted a 
very focused campaign to improve ties.  As a result, Taiwan 
invested a significant amount in the Czech Republic and 
remains one of the largest foreign investors in the country. 
Kral told AIT that the eighth largest company in the Czech 
Republic is Taiwanese (Hon Hai Precision) and that Prague is 
looking to Taiwan for high-technology cooperation since 40 
percent of the computers in Europe are produced in the Czech 
Republic. 
 
9. (C) Kral told AIT that although Prague has a consistent 
One-China policy, his government also wants a balanced policy 
towards Taipei.  Kral said the Czech Republic understands 
that the PRC is a global power, but does not believe Beijing 
deserves special treatment.  Kral added that Prague does not 
wish to be dictated to by China and in June 2003, the Czech 
Republic allowed MOFA to hold its European regional 
conference in Prague.  Other European nations had denied 
Taipei's request, but Kral said that Prague believed this was 
not a political issue despite PRC protests.  However, he said 
there are limits to the relationship, pointing to former 
Czech President Havel's refusal to allow President Chen to 
visit Prague while Havel was President because of the 
consequences from the PRC. 
 
Comment: A Lost Opportunity 
--------------------------- 
 
10. (C) Why Taipei continues to emphasize Western Europe over 
nations in Central and Eastern Europe is a mystery. 
Logically, Taipei should seek allies among the new 
democracies in Central and Eastern Europe rather than 
focusing its resources lobbying unsympathetic nations like 
France and Germany in the west.  Central and Eastern Europe 
clearly want to engage Taipei economically because of 
Taiwan's high-tech expertise and FDI potential.  The region, 
moreover, is already politically sympathetic to Taiwan 
because of its shared experiences with anti-Communism and 
democratization. 
 
11. (C) Yet the Chen administration appears to have alienated 
many governments in Central and Eastern Europe, leaving 
Beijing opportunities to make inroads in a region where its 
political system and foreign policy orientation might have 
otherwise reduced its potential influence.  Once again, as 
Taipei ignores Central and Eastern Europe, Taiwan is 
demonstrating that it lacks a foreign policy strategy to 
counter Beijing, which is particularly unwise as the decision 
to lift the EU arms embargo against the PRC draws near. 
PAAL