US embassy cable - 05ASUNCION1095

S E C R E T ASUNCION 001095 
 
SIPDIS 
 
NSC FOR SUE CRONIN 
SOUTHCOM FOR DAN JOHNSON 
 
E.O. 12958: DECL: 08/19/2015 
TAGS: EAGR, ECON, EFIN, EMIN, ENRG, ETRD, ETTC, PHUM, PREL, CH, PA 
SUBJECT: PARAGUAY: DIALOGUE WITH TAIWAN ON PRC WHA 
ACTIVITIES 
 
REF: STATE 143649 
 
Classified By: PolCoun James P. Merz for reasons 1.5 (b) and (d). 
 
1.  (S)  The Taiwanese Ambassador to Paraguay took up his 
assignment this year.  The Ambassador has infrequent social 
contact with him but believes the Taiwanese Ambassador would 
be amenable to contact on PRC activities.  The Polcouns has 
relatively frequent social and professional contact with the 
Taiwanese Polcouns who has been assigned to Paraguay for over 
four years. 
 
2.  (U)  Paraguay is the only country in South America that 
maintains diplomatic relations with Taiwan and supports 
Taiwan's petition for UN membership.  This policy is a legacy 
of the anti-Communist Stroessner regime.  In exchange for GOP 
recognition, Taiwan provides the GOP with assistance ranging 
from USD 5 to 10 million per year.  The modern structure that 
houses the Paraguayan Congress was constructed several years 
ago with Taiwanese funds.  Taiwan also paid for complete 
renovation of the Foreign Ministry building.  In the past 
year, Taiwanese funds have gone toward construction of 
housing for low income families and the purchase of land for 
poor campesinos.  Taiwan regularly sponsors senior GOP 
officials along with Paraguayan Congressmen and military 
officers on trips to Taiwan.  There have been suggestions 
that Taiwan has provided the ruling Colorado Party funds to 
support its electoral campaigns. 
 
3.  (C)  Taiwan is intensely concerned Paraguay might tilt 
away from Taiwan and toward the PRC.  Paraguay is under 
pressure from its Mercosur partners -- namely Argentina and 
Brazil -- to open relations with the PRC as a prerequisite to 
negotiation of a Mercosur trade agreement with the PRC. 
Diogenes Martinez, a former Paraguayan FM, heads up the 
Paraguayan Association of Friends of the PRC (APACHI); made 
up of retired military and political officials, APACHI 
advocates Paraguay's establishing relations with the PRC. 
Earlier this year, a Colorado Senator drafted a bill that 
called for Paraguay to allow the PRC to open an economic 
trade office based on the benefits in trade Paraguay could 
expect in return.  The bill went nowhere at the time but 
there has been some talk of its introduction for formal 
consideration by the Senate.  The Taiwanese Embassy strongly 
objects to establishment of this office.  However, it has not 
been lost on supporters of this bill that other States that 
recognize Taiwan -- i.e. Panama -- have allowed the PRC to 
open up a trade office and continue to receive assistance 
from Taiwan. 
 
4.  (S)  The Taiwanese Ambassador is openly critical of the 
PRC's alleged intentions and actions.  The Taiwanese PolCouns 
has suggested the PRC is not above buying the support of key 
politicians as well as APACHI leadership.  (Comment: Of 
course, the same charge has been levied against Taiwan.  End 
Comment.)  Post has no basis to assess bonafides of 
allegations by Taiwanese representatives about PRC actions 
and plans but believes enhanced dialogue could produce more 
insight into PRC activities. 
KEANE