US embassy cable - 05TAIPEI2989

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 002989 
 
SIPDIS 
 
STATE PASS AIT/WASHINGTON 
 
E.O. 12958: DECL: 06/02/2015 
TAGS: ECON, ETRD, MARR, OVIP, PGOV, PREL, TW, Domestic Politics, Foreign Policy, Military Issues, Trade 
SUBJECT: SENATOR ROCKEFELLER'S TRIP TO TAIWAN 
 
Classified By: AIT Acting Director David Keegan, Reason 1.4 (b/d) 
 
1. (C) Summary: During his May 28-30 visit to Taiwan, Senate 
Finance and Intelligence Committee Member John D. Rockefeller 
(D-WV) met with President Chen Shui-bian, Premier Frank 
Hsieh, and Foreign Minister Mark Chen.  In these meetings and 
in his public speech to an economic think-tank, Senator 
Rockefeller expressed his support for pursuing a Free Trade 
Agreement (FTA) and stressed the importance of passing the 
USD 18 billion Special Defense Procurement Budget.  Senator 
Rockefeller also encouraged pragmatic economic and political 
policies to temper cross-Strait tensions and told Taiwan 
officials that despite his own understanding of the value of 
a well-contructed FTA, many Members of Congress and the 
American public are growing wary of FTAs and that it will be 
difficult to achieve an FTA agreement.  End summary. 
2. (C) In his May 30 meeting with Taiwan Premier Frank Hsieh, 
Senator Rockefeller offered his support for moving on 
Taiwan-US FTA talks, but advised Hsieh that such an agreement 
would not be easy to achieve.  Rockefeller pointed out that 
the mood in the US Congress toward FTAs has soured because of 
outsourcing and job losses in the manufacturing sector. 
Senator Rockefeller added that a US-Taiwan FTA would not pass 
quickly because there are many other FTAs that are currently 
under consideration in Congress.  Nevertheless, he maintained 
that it is important to begin the FTA process because it will 
encourage other nations to consider similar pacts with 
Taiwan.  Rockefeller also expressed to Hsieh his 
disappointment over Taiwan's political in-fighting and the 
current cross-Strait situation and encouraged quick approval 
of the constitutional reforms that are under consideration in 
the National Assembly (NA) to bring Taipei into a two party 
system.  He further urged Hsieh to adopt policies that would 
contribute to stable cross-Strait relations and maintain the 
status quo. 
 
3. (C) Premier Hsieh thanked Rockefeller for engaging in FTA 
negotiations, noting that he realizes the FTA approval 
process will be difficult.  Hsieh told the Senator that an 
FTA is vital for Taiwan's future economic growth and agreed 
with Rockefeller that other countries would follow suit if 
Taiwan had an FTA with the US.  He expressed his hope that an 
FTA would be achieved within two years.  Noting that the PRC 
has been using its growing power to isolate Taiwan 
economically, Hsieh pointed to Taiwan's efforts to sign FTAs 
in Latin America that were derailed by Beijing.  Hsieh agreed 
with Senator Rockefeller that stable cross-Strait ties should 
be Taiwan's main priority and suggested that once 
constitutional reforms are passed by the NA, more progress 
will be made on cross-Strait relations. 
 
4. (C) Senator Rockefeller expanded his FTA and cross-Strait 
discussions during his May 30 meeting with President Chen. 
He told Chen that he supports moving forward on an FTA with 
Taiwan, but that many Members of Congress and Americans are 
suspicious of FTAs and are growing wary of rising trade and 
budget deficits.  The Senator said that he believes that it 
is important to push forward on an FTA because such an 
agreement with the US would remove some of the hesitancy of 
other nations on associating with Taiwan because of PRC 
pressure.  Senator Rockefeller told to Chen that he would 
work to pursue an FTA, but explained that success might not 
be achieved right away.  The Senator also expressed his 
disappointment over Taiwan's declining defense budget and 
said that most Americans erroneously believe that Taiwan has 
a robust defense capability.  He expressed his hope that 
Taiwan can put aside political differences and pass the 
Special Budget soon. 
 
5. (C) President Chen told Senator Rockefeller that Taiwan is 
being marginalized around the world and that the PRC is 
blocking Taipei's efforts to integrate into the global 
economy.  Chen said that Beijing's efforts have a direct 
impact on Taiwan's economic stability and Taipei's national 
security capabilities.  Noting that economic security is just 
as important as defense security, he said that an FTA would 
play a vital role in ensuring Taiwan's future economic 
prosperity.  Chen expressed his appreciation for 
Rockefeller's support and said, while he understood an FTA 
would not happen right away, Taipei and Washington should 
begin FTA discussions soon because this would have tremendous 
symbolic benefit for Taiwan.  Without an FTA, Chen lamented, 
Taiwan will not be able to meet future PRC challenges and its 
economic and security posture will continue to weaken. 
 
6. (C) In response to Senator Rockefeller's concern over 
Taiwan's declining defense budget, President Chen insisted 
his government is committed to the Special Budget.  He 
predicted that after July the timing and political 
environment would be more suitable for the Legislative Yuan 
(LY) to take action on the Special Budget.  There were many 
roadblocks over the past year which contributed to the 
political deadlock in the LY, he explained, including the 
presidential election, the LY elections, Pan-Blue trips to 
the PRC, and now the July KMT party Chair election.  After 
July, however, opposition political maneuvering will decline, 
Chen told the Senator, and the Special Budget will have a 
serious chance of passage then. 
 
7. (U) Senator Rockefeller has reviewed and cleared this 
message. 
KEEGAN