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Lucia A Keegan  11/07/2006 03:01:01 PM  From  DB/Inbox:  Lucia A Keegan

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UNCLAS    SENSITIVE     PARIS 07228

SIPDIS
cxparis:
    ACTION: ECON
    INFO:   POL UNESCO AMBO DCM AGR OECD ECSO ECNO SCI PAO
            LABO AMB FCS ENGO TRDO

DISSEMINATION: ECONIN
CHARGE: PROG

VZCZCFRO957
PP RUEHFR
DE RUEHFR #7228/01 3101348
ZNR UUUUU ZZH
P 061348Z NOV 06
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC PRIORITY 2860
INFO RUEHFR/OECD COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1357
RUEHIN/AIT TAIPEI 1327
RUEHHK/AMCONSUL HONG KONG 0196

UNCLAS SECTION 01 OF 02 PARIS 007228 
 
SIPDIS 
 
FROM USOECD PARIS 
 
STATE FOR EUR/ERA, EB, IO/S AND E 
 
SENSITIVE 
 
E.O.  12958: N/A 
TAGS: ECON PREL SENV EU CH TW OECD FR
SUBJECT: CHINA AND CHINESE TAIPEI AT THE OECD: RAISING THE BAR? 
 
REF: (A) PARIS 2868 
 
¶1.  (SBU) Summary and action request: China and Taiwan (Chinese 
Taipei) continue to spar over Taiwan's participation, as a 
non-member, in the work of the OECD -- work for which statehood is 
not a requirement.  In recent developments, Chinese Taipei has 
applied to participate in the activities of the Group on Health, 
while its application to join the Committee on Science and 
Technology Policy (CSTP) as an observer remains on hold.  Beijing 
has made clear its objections to Taipei's joining the CSTP -- where 
China is already an observer; China is neither a member of nor an 
applicant to the Group on Health. 
 
¶2.  Action request (see also para. 7): we recommend that the US 
continue its policy of supporting Chinese Taipei's applications on 
the merits at the committee or working group level, notwithstanding 
possible PRC objections.   To do otherwise would allow Beijing to 
unilaterally raise the bar for Chinese Taipei activities at the 
OECD, and encourage Beijing to make further demands concerning 
Taiwan both at the OECD and at other international organizations. 
In maintaining this policy, we acknowledge that the result could be 
a severe curtailment -- by Beijing -- of the current very active 
program of OECD-China cooperation.  End Summary and action request. 
 
 
 
¶3.  (SBU) China and Chinese Taipei continue to spar over 
participation in the work of the OECD (reftel).  The OECD accords 
priority to China, as a key world economy and one of the "BRICS," 
the five important economies not now members of the OECD (Brazil, 
Russia, India, China, and South Africa).  China is also the focus of 
the OECD's largest "country program," (featuring extensive 
OECD-China consultations and resultant policy recommendations from 
the OECD) and a likely candidate for the OECD's new "enhanced 
engagement" program now under discussion, with eventual OECD 
membership in view, though in the distant future.  At the same time, 
under OECD commitments made to Beijing by then OECD 
Secretary-General Paye a decade ago, Chinese Taipei participates, 
 
SIPDIS 
without symbols of sovereignty, in activities for which statehood is 
not a requirement -- as an observer in several OECD committees, and 
as an invited guest (economic officials only, and below the level of 
minister) at Global Forums and other OECD events.  Membership is not 
in the cards for Chinese Taipei, nor is Chinese Taipei a likely 
candidate for enhanced engagement.  However, "regular outreach" to 
nonmembers, including committee observerships, remains open to 
Chinese Taipei. 
 
Taipei and Beijing raise the stakes 
 
¶4.  (SBU) Over the past year and a half, Chinese Taipei has ramped 
up its efforts to participate in OECD work, with applications to be 
observers in six different committees and working groups.  It has 
also on occasion hinted that it might press to be an OECD member 
(under a stretched interpretation of the OECD Convention; the OECD 
legal office disagrees that this would be possible).  In reaction, 
China, no longer content with the previous OECD commitments 
regarding Taiwan, has moved to raise the bar, objecting to Chinese 
Taipei's participation as committee observers in general, and 
threatening -- and in at least one case, acting -- to freeze 
cooperation with the OECD in order to pressure the organization to 
keep Chinese Taipei from joining committees as observers. 
 
US Policy 
 
 
¶5.   (SBU) US policy to date has been to defer to the judgment of 
OECD committees on Chinese Taipei's applications to be observers. 
The US, of course, is represented on those committees.  The 
committees have examined applications on technical and non-political 
criteria, looking at factors such as whether applicants are "major 
players" in the subject matter handled by the committee (e.g., 
trade, science and technology, health), and whether there would be 
"mutual benefit" to both the committee and the applicant from an 
observership.  Following examination by subject-matter committees, 
the External Relations Committee (ERC) then examines and generally 
endorses the substantive committees' recommendations (for or 
against), which are then passed to the OECD Council for final 
approval as an "a" point (i.e., without discussion). 
 
Committee on Science and Technology Policy: China objects 
 
¶6.   (SBU) China joined the Committee for Science & Technology 
Policy (CSTP) as an observer in 2001.  Chinese Taipei applied last 
year for the same status, and the CSTP, with US backing, approved 
the application. China, however, made known its opposition to 
inclusion of Chinese Taipei, asserting that Chinese Taipei's 
application was part of a world-wide campaign to solicit recognition 
of Taiwan as a state.  China also withheld cooperation with the OECD 
on an innovation policy study of China, pending assurances that 
Chinese Taipei would not participate in the CSTP's meeting in March 
2006 (in any event, Chinese Taipei's participation as an observer 
was not possible, since the ERC and Council had not yet approved the 
application).  The External Relations Committee finally addressed 
Chinese Taipei's application, in June, 2006, and referred the matter 
back to the CSTP for another look -- effectively kicking the can 
down the road in order to give newly-installed OECD Secretary 
General Gurria time to get his feet on the ground on this and other 
issues facing the OECD. 
Latest application: Group on Health 
 
¶7.  (SBU) Now push has come to shove: on the one hand, Chinese 
Taipei's application to join the CSTP remains on hold.  At the same 
time, Chinese Taipei has recently applied to "participate in the 
activities" of the OECD's Group on Health.  China is not a member of 
the Group on Health, nor has it applied for any kind of status 
there.  We believe that the US should continue on the same policy 
course as before: deferring to OECD committees, and, in those 
committees, supporting Chinese Taipei's applications when they meet 
the criteria of the committees.  We acknowledge the paramount 
importance of the China program to the OECD, compared with Taiwan -- 
and we should of course make this point in our discussions with 
Beijing.  We acknowledge also that Chinese Taipei's sudden storm of 
applications clearly has political as well as economic motivations 
-- and we expect that committees would weed out any applications 
lacking a firm economic or technical foundation.  From an OECD point 
of view, however, to allow China -- as a non-member -- to enforce 
its views on another non-member's qualifications finds no support in 
OECD rules, could result in rejection of a qualified applicant 
(particularly to committees such as CSTP, an area where Taiwan is 
clearly a major player), and sets a bad precedent with respect to 
other non-members who may wish to do likewise on other matters 
(Cyprus issues come to mind).  From a US point of view (at least as 
seen from OECD-Paris), granting China an effective veto on Chinese 
Taipei's participation would not only likely lead to further demands 
from China at the OECD (such as renewed pressure to oust Chinese 
Taipei from Committees on which Taiwan is already an observer -- a 
request put forward by China's Ambassador to France last January, 
reftel) but would presumably also result in increased Chinese 
pressure in other international organizations to raise the bar in a 
similar fashion. 
 
¶8.  (SBU) Action Request: we recommend that the US make it clear -- 
in the Group on Health, at the CSTP, and in other OECD bodies and 
activities where statehood is not a requirement -- that its policy 
with respect to Chinese Taipei remains as before: to consider 
observership and other applications and invitations "on the merits," 
in the light of the usual OECD criteria such as major player and 
mutual benefit, irrespective of Beijing's views.  The US should also 
make clear to the OECD Secretariat that the OECD should be prepared 
to accept the possible consequences of this policy, such as 
withdrawal by Beijing of cooperation with the OECD in one or (worst 
case) all areas of current cooperation.  In this context, we and the 
OECD should of course continue to emphasize to Beijing the paramount 
importance of China, as evidenced by the China country program, and 
by China's likely inclusion in the new "enhanced engagement" process 
and possible future consideration as a member (all in contrast to 
the treatment of Chinese Taipei), and reiterate our support for the 
OECD's previous commitments with respect to Taiwan, including use of 
the term "Chinese Taipei" and avoidance of all symbols of 
sovereignty. 
 
STONE