US embassy cable - 05TAIPEI2477

C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 002477 
 
SIPDIS 
 
STATE PASS AIT/WASHINGTON 
 
E.O. 12958: DECL: 05/31/2015 
TAGS: PREL, PGOV, ASEC, TW, Cross Strait Politics 
SUBJECT: TAIWAN'S FOREIGN POLICY ALIENATING SOUTHEAST ASIA 
 
Classified By: AIT Director Douglas H. Paal, Reason 1.4 (b/d) 
 
1. (C) Summary: Taiwan's relationship with Southeast Asia has 
deteriorated as Taipei's foreign policy has alienated some 
governments and allowed Beijing to increase its leverage. 
Taiwan's Ministry of Foreign Affairs (MOFA) is trying to 
encourage closer economic and political ties to Southeast 
Asia with its "Go South Policy," but is losing influence at 
the hands of Beijing's proactive economic policies and 
growing trade ties with Southeast Asia.  Southeast Asian 
diplomats in Taipei tell AIT that their governments are 
growing wary of Taiwan because of the Chen Shui-bian 
administration's practice of using foreign policy for 
political gain.  They note that President Chen's eagerness to 
publicize Taipei's foreign policy successes and relationships 
with Southeast Asia for the benefit of domestic audiences has 
drawn the ire of Beijing.  As a result, many governments in 
Southeast Asia - including longtime supporter Singapore - 
view their relationship with Taiwan as a liability and have 
distanced themselves from Taipei in favor of the PRC. 
Furthermore, Taiwan's inability to formulate a viable 
strategy to deal with the region has allowed Beijing to 
expand its influence almost unchallenged and resulted in lost 
opportunities for Taiwan to advance its standing in Southeast 
Asia.  End summary. 
 
Taiwan's "Go South" Policy 
-------------------------- 
 
2. (C) The cornerstone of MOFA's foreign policy in Southeast 
Asia is Taipei's "Go South Policy," which is designed to 
promote closer economic ties to counter the region's 
increasing economic tilt towards Beijing.  MOFA's Section 
Chief for Southeast Asian Affairs, Andrew Lee, told AIT that 
MOFA believes the best way to improve relations with 
Southeast Asia is to have good economic relations.  Lee 
asserted that MOFA's strategy is to gradually build 
commercial ties and use economics as a catalyst for improved 
relations and possibly a political relationship.  Vietnam, he 
explained, is MOFA's main focus in its "Go South Policy" 
because Hanoi has shown some flexibility towards Taiwan. 
Convinced of Vietnam's economic growth potential, Taiwan has 
become one of Hanoi's top foreign investors. 
 
3. (C) Lee told AIT that MOFA plans to continue the "Go 
South" policy and broaden it to include other nations in 
Southeast Asia, as well as Australia and New Zealand.  He 
said that MOFA's Southeast Asia strategy is flexible and 
tailored to the circumstances of each country in the region. 
Every two years MOFA will revaluate policies to determine 
their effectiveness.  For example, Lee told AIT that MOFA 
needs to focus more resources on Malaysia because Kuala 
Lumpur is reluctant to deal with Taipei.  However, Lee 
remarked that his superiors have not yet given him 
authorization to engage Malaysia and that MOFA has no plans 
to expend resources on Kuala Lumpur.  Lee believes that 
Taipei can offer Malaysia a lot, particularly in the IT and 
high-tech arena.  Lee, however, privately expressed 
considerable frustration at Taipei's lack of focus on some 
countries in the region and a failed strategy to counter 
Beijing. 
 
Little Success Countering Beijing 
--------------------------------- 
 
4. (C) Taipei has had little success with its "Go South" 
policy in combating Beijing's growing economic influence and 
political ties to Southeast Asia.  Vietnam's Economic and 
Cultural Office in Taipei Deputy Director, Le Hong Nguyen, 
told AIT that Vietnam's relationship with the PRC is far more 
important than Taiwan and that Hanoi is not willing to 
jeopardize this relationship.  While Le did not discount 
Taiwan's investments in Vietnam, he said that Hanoi has 
excellent relations with Beijing and nothing Taiwan does will 
change that relationship.  When asked about the future of 
Vietnam's relations with Taiwan, Le admitted that it is hard 
to predict since Hanoi believes Beijing is essential to 
Vietnam's future development.  Le's strong statements about 
the importance of the PRC to Vietnam directly contradicted 
the assertions of MOFA's Lee that Vietnam is the foundation 
of Taipei's "Go South" policy and a success story for Taiwan. 
 
 
5. (C) Thailand's Trade and Economic Office Deputy Director, 
Benjamas Tanvetyanont, told AIT that Beijing has considerable 
influence among Thai government officials and corporate 
leaders, and that Bangkok's policies are not focused towards 
Taipei.  Tanvetyanont also said that Bangkok has agreed to a 
FTA with Beijing and expects economic ties to continue to 
grow.  MOFA's Lee echoed Tanvetyanont, explaining that 
Taipei's relations with Bangkok are not particularly close 
because the Thai economy is relatively developed and has 
little to gain from Taiwan's economy.  Lee also noted that 
Thai Prime Minister Thaksin Shinawatra has close personal 
ties to the PRC through his vast business interests and that 
Thai Foreign Minister Kantathi Suphamongkhon, with one eye on 
the UN Secretary-General position, does not want to alienate 
the PRC in hopes Beijing will support his bid. 
 
6. (C) Malaysia has largely avoided ties with Taiwan and is 
focused on Beijing.  Unlike other Southeast Asian nations, 
Kuala Lumpur does not operate a full time trade office in 
Taipei.  In response to AIT's request for a meeting, the 
Malaysian trade office in Taipei replied that there would be 
no personnel staffing the office for almost two months and 
that office is only staffed part-time.  Taiwan's relationship 
with smaller less developed nations is also suffering at the 
hands of Beijing.  MOFA's Lee told AIT that trade with 
Cambodia is declining because of a poor investment climate 
and Phnom Penh's close relationship with the PRC. 
 
Also Hurt By Chen's Foreign Policy 
---------------------------------- 
 
7. (C) Taipei's desire for better ties with Southeast Asia is 
also being hindered by the Chen administration's practice of 
publicizing Taipei's foreign policy for quick domestic 
political gains.  Thailand's Tanvetyanont told AIT that 
Bangkok has had many problems with Taipei's efforts to 
publicize the Taiwan-Thailand relationship.  Tanvetyanont 
explained that Thailand is very close to the PRC and Bangkok 
cannot afford to anger Beijing.  She added that Taipei is 
always trying to get high-level visits to Thailand and added 
that if Taiwan officials were allowed to visit, Taipei would 
have a huge press conference the next day announcing the 
visit, which would harm Bangkok-Beijing ties.  The Chen 
administration, Tanvetyanont lamented, cannot keep 
relationships quiet, and Bangkok cannot trust Taipei because 
Taiwan will promise silence, but then inflame the situation 
with a press conference. 
 
8. (C) The Chen administration's foreign policy strategy and 
tactics have had the most serious consequences for Taipei's 
relationship with Singapore, long Taiwan's strongest 
supporter in the region.  Both MOFA's Lee and Singapore's 
Representative in Taipei, Ker Sin Tze, told AIT that 
historically Singapore has been one of Taiwan's closest 
allies.  However, since President Chen came to power in 2000, 
the relationship has soured as Singapore has distanced itself 
from Taipei and looked to the PRC for improved political and 
economic ties.  Ker added that there is little sympathy for 
Taiwan among both Singapore government officials and public, 
and that Singapore's government has been burned too many 
times by the Chen administration.  He highlighted Chen's 2002 
visit to Singapore that was supposed to be a discreet and 
low-key.  Instead, Chen publicly announced the visit and 
trumpeted it as a diplomatic victory, causing a very bad 
period for PRC-Singapore relations.  Ker explained to AIT 
that the DPP's independence platform and opposition to a 
one-China framework is making the situation worse because 
Singapore and the rest of the region want stable cross-Strait 
ties. 
 
9. (C) Singapore Prime Minister Lee Hsien-loong's visit to 
Taiwan in July 2004 also damaged Singapore's relationship 
with Taiwan and left Singapore disappointed with Taipei's 
cross-Strait policies.  According to Singaporean officials in 
Taipei, Singapore went to considerable trouble to arrange the 
visit while Lee was still Deputy Prime Minister and had high 
hopes the visit would energize the Singapore-Taiwan 
relationship.  Instead, Lee found President Chen and the DPP 
focused too much on tactics with the PRC and eager to leak 
the details of their meetings to the press.  Lee returned 
home to Singapore unimpressed and under considerable pressure 
from Beijing.  Singaporean frustration over the visit and 
Beijing pressure on Singapore in its aftermath laid the 
ground work for a falling out between Taiwan and Singapore 
over Taiwan Foreign Minister Mark Chen and Singapore Foreign 
Minister George Yeo in September 2004. 
 
10. (C) Dr. Eric Teo from the Singapore Institute of 
International Affairs (SIIA) highlighted this fallout, over a 
rude public insult directed at Singapore by Taiwan Foreign 
Minister Mark Chen, as an important factor in the precipitous 
reduction of the relationship.  Chen's comments were in 
response to Singapore Foreign Minister George Yeo's comments 
during a UN speech that urged President Chen to pursue 
moderate cross-Strait policies.  Teo called Foreign Minister 
Chen's response a disgrace and said the remarks permanently 
damaged Taipei's relationship with Singapore.  He also 
characterized the episode as a good example of the reality of 
Chen's foreign policy towards the Association of Southeast 
Asian Nations (ASEAN).  Even MOFA's Lee admitted to AIT that 
Singapore has expressed desire for a more discreet, quiet 
relationship with Taiwan and he privately acknowledged to AIT 
that, in his mind, Singapore is being both smart and 
practical.  Singapore, he concluded, is shrewdly focused on 
doing what is best for its national interests in the long 
run. (Comment: Lee's clear intent was to imply that, by 
contrast, Taiwan is not so shrewdly focused.  End comment). 
 
Taiwan's Lost Opportunities 
--------------------------- 
 
11. (C) Southeast Asian diplomats and experts assess that 
Taiwan's Southeast Asia foreign policy has largely served 
Beijing's interests and resulted in lost opportunities for 
Taiwan.  Singapore's Senior Assistant Trade Representative, 
Elenore Kang, told AIT that Taiwan's foreign policy towards 
Southeast Asia has greatly benefited the PRC and allowed 
Beijing to bring ASEAN into the PRC's sphere of influence. 
Moreover, Kang said that Taipei's inept foreign policy in the 
region has lost opportunities for Taiwan to combat Beijing's 
growing prowess.  For example, she highlighted Taiwan's 
botched opportunity for an FTA with Singapore.  According to 
Kang, Singapore proposed the idea of an FTA with Taiwan in 
2000, however, Taiwan officials never made a sincere effort 
to reach a deal.  She said once an FTA framework was reached 
among ASEAN nations, of which Taiwan is not a member, 
Taipei's opportunity for an FTA with Singapore and possibly 
other ASEAN nations was lost. 
 
12. (C) Dr. Teo from SIIA agreed with Kang, arguing that the 
Chen administration's ASEAN strategy is nonexistent and has 
only worsened Taipei's standing in the region.  Both Teo and 
Singapore's Ker characterized the ASEAN FTA as the 
centerpiece of the region's future economic strategy.  Teo 
said that Taiwan has mishandled its dealings with ASEAN and 
lost a golden opportunity to play a role in ASEAN and advance 
its diplomatic position.  Instead, Teo told AIT that the PRC 
should give the Chen administration a "gold medal" for its 
policies that have made ASEAN nations wary of Taiwan and 
pushed them further into the PRC's orbit.  Teo said that the 
prospect for an FTA and improved relations with ASEAN is now 
a "lost cause" for Taiwan.  He asserted to AIT that the 
majority of Taipei's MOFA officials are exasperated and 
embarrassed by the Chen administration's tactics. 
 
Comment: A Bleak Future 
----------------------- 
 
13. (C) The damage to Taipei's closest relationship in the 
region, Singapore, should be a wake-up call for the Chen 
administration.  ASEAN nations view the Chen administration 
as a liability and are wary of close relations with Taiwan in 
order to maintain good relations with Beijing.  President 
Chen and the DPP's tactics of using foreign policy for 
domestic political gain have alienated most Southeast Asian 
governments and left them little choice except to look to 
Beijing at Taiwan's expense.  Southeast Asia is another 
example that Taiwan lacks an effective foreign policy 
strategy to counter the PRC's efforts to isolate it.  As long 
as Taipei continues its public, vocal, and domestic 
politics-driven foreign policy toward the nations of 
Southeast Asia, its standing in the region will be 
increasingly marginal and irrelevant. 
PAAL