VZCZCXYZ0000
RR RUEHWEB

DE RUEHIN #1754/01 1430855
ZNR UUUUU ZZH
R 230855Z MAY 06 ZDK
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 0300
INFO RUEHBJ/AMEMBASSY BEIJING 5233
RUEHHK/AMCONSUL HONG KONG 6445

UNCLAS AIT TAIPEI 001754 
 
SIPDIS 
 
DEPARTMENT FOR INR/R/MR, EAP/TC, EAP/PA, EAP/PD - ERIC BARBORIAK 
DEPARTMENT PASS AIT/WASHINGTON 
 
SIPDIS 
 
E.O. 12958: N/A 
 
 
TAGS: OPRC KMDR KPAO TW
SUBJECT: MEDIA REACTION: U.S.-TAIWAN RELATIONS 
 
 
¶1. Summary: As the insider trading scandal allegedly involving 
President Chen Shui-bian's son-in-law continued in Taiwan's media 
spotlight May 23, newspaper coverage also focused on Taiwan's 
failure to obtain observer status at the World Health Assembly and 
on the year-end Kaohsiung mayoral race.  The pro-status quo "China 
Times" ran an exclusive front-page story with the headline: "Lu: 
Will Resign As Vice President If Corrupt Practices Cannot Be 
Eliminated within Three Months."  The pro-independence "Taiwan 
Daily," on the other hand, ran a banner headline on page three that 
said "U.S. Assistant Secretary of State for East Asian and Pacific 
Affairs Urges China to Engage in Direct Dialogue with President 
Chen."  The same newspaper also ran a story inside with the 
headline:  "Taiwan-U.S. TIFA [Talks] to Kick off Day after 
Tomorrow." 
 
¶2. In terms of editorials and commentaries, an opinion piece in the 
mass-circulation "Apple Daily" said Chen's move to specify a policy 
in Taiwan's first National Security Report to increase the island's 
national defense budget can be viewed as a plan that kills two birds 
with one stone.  On the one hand, according to the article, Chen's 
move is akin to making a written commitment to the United States, 
which will evidently help improve Chen's interactions with 
Washington.  On the other hand, the article added, it will help 
pressure the opposition parties to pass the defense budget proposed 
by the Chen administration - a move that will help augment Chen's 
performance with regard to national security.  A separate opinion 
piece in the "Apple Daily" asked the United States why it left out 
Taiwan when it has signed Free Trade Agreements (FTA) with major 
anti-terrorist countries in the world.  End summary. 
 
A) "Bian and U.S. Each Has Something to Gain from [Taiwan's] 
National Security Report" 
 
Professor Chang Tzu-yang, head of Nanhua University's Department of 
International and Mainland Affairs, opined in the mass-circulation 
"Apple Daily" [circulation: 500,000] (5/23): 
 
"The National Security Report has come out, and many people in 
Taiwan think there is nothing new in the report.  But such a view 
might overlook some of the details that are closely related to 
future political developments:  First, the U.S. reaction came 
extraordinarily quick.  AIT Taipei Director Stephen Young's comments 
appeared in the newspapers before the report came out.  Young 
assessed the report as 'constructive,' and he urged China to learn 
from Taiwan's 'transparency of information.'  Even though Young did 
not indicate which part of the report is constructive, his speech at 
the Taipei American Chamber of Commerce on May 12 seemed to reveal 
some hints.  In his speech, Young urged both the ruling and 
opposition parties in Taiwan to work together to increase the 
national defense budget.  ... 
 
"The move to specify the policy to increase [Taiwan's] national 
defense budget in the 'binding' National Security Report is, 
externally speaking, akin to Chen Shui-bian handing a written 
commitment to the United States - a move that will help improve his 
interactions with the United States so as to complement his mediocre 
performance on the diplomatic front.  In the domestic aspect, Chen 
can use the report to intangibly include the opposition parties 
under the U.S. pressure, so they will consider passing the defense 
budget allocated by the Chen administration and not wait until after 
2008 - a move that will help augment Chen's performance with regard 
to national security.  It can thus be viewed as a plan that kills 
two birds with one stone.  ... 
 
"The United States is highly skilled in controlling how its 
relations with Taiwan can be improved.  Deputy U.S. Trade 
Representative Karan Bhatia is scheduled to visit Taiwan May 25; he 
will ask Taiwan to strengthen its enforcement of the Intellectual 
Property Rights Law, loosen its financial regulations, and support 
the U.S. position concerning the Doha Round.  The friendly 
atmosphere that has just been restored between Taiwan and the United 
States will be conducive to Bhatia's promotion of the U.S. trade 
agenda.  Judged from this perspective, Washington has its reasons in 
acting in line with [Taiwan]. ..." 
 
B) "The United States Should Sign a Free Trade Agreement with Taiwan 
as Early as Possible" 
 
Chao Wen-heng, associate research fellow of the Taiwan Institute of 
Economic Research, opined in the mass-circulation "Apple Daily" 
[circulation: 500,000] (5/23): 
 
"Taiwan has been working with the United States to strengthen 
international intelligence cooperation, prevent money laundering, 
and provide various kinds of humanitarian assistance.  In addition, 
Taiwan either participated in or supported the United States' 
campaign for the global war on terrorism, such as signing the 
Container Security Initiative and the Proliferation Security 
Initiative.  On the international frontlines of the war on 
terrorism, Taiwan plays an important role with regard to money 
laundering prevention and intelligence cooperation.  Former AIT 
Taipei Director Douglas Paal even praised Taiwan for its 
contributions to international anti-terrorist activities.  [We] 
believe the U.S. government is clearly aware of this situation.  But 
what we cannot understand is why Washington has left out Taiwan when 
it has signed Free Trade Agreements (FTA) with all the major 
anti-terrorist countries. ... 
 
"... If the United States does not sign an FTA with Taiwan, no other 
country will do so (other countries will follow suit after Taiwan 
signs an FTA with the United States).  Under such a circumstance, 
Taiwan's trade position in the international community is doomed to 
marginalization.  If major trade and economic countries in the world 
sign FTAs with each other while Taiwan is excluded, the trade 
barriers formed by these FTAs will make it difficult for Taiwan's 
products to be exported to other countries, and [the result] will 
thus be another form of economic isolation. ..." 
 
YOUNG