VZCZCXYZ0000
PP RUEHWEB

DE RUEHIN #0205/01 0260835
ZNR UUUUU ZZH
P 260835Z JAN 07
FM AIT TAIPEI
TO RUEHRC/USDA FAS WASHDC PRIORITY 2608
RUEHC/SECSTATE WASHDC PRIORITY 3875

UNCLAS AIT TAIPEI 000205 
 
SIPDIS 
 
SENSITIVE 
 
FAS FOR OCRA/SMITH; OFSO/THURSLAND 
STATE FOR EAP/TC 
STATE PASS USTR FOR ERIC ALTBACH 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAGR ETRD TW
SUBJECT: DIRECTOR'S MEETING WITH COA CHAIRMAN SU: PAVING THE WAY FOR 
CCA 
 
REF: TAIPEI 00024 
 
SENSITIVE BUT UNCLASSIFIED 
 
¶1. (SBU) Summary.  In his January 25 meeting with Taiwan's Council 
of Agriculture (COA) Chairman, Mr. Su Chia-chyuan, AIT Director 
Young proposed that the inaugural session of the Consultative 
Committee on Agriculture (CCA) be convened soon, hopefully in the 
spring.  A senior USDA official is expected to come to Taipei to 
open the CCA, leading a small group of experts who will participate 
in the meetings.  Chairman Su noted that since the remaining issues 
over the CCA founding documents are resolved, he expected that 
Executive Yuan clearance of these documents and other internal 
administrative processes will be completed before the start of the 
Chinese New Year (February 17).  COA's earlier misgivings over the 
CCA appear to have given way to a more proactive desire to use this 
mechanism to deepen its relationship with the United States. 
Director Young also described for Chairman Su his recent meeting 
with USDA Secretary Johanns, heard COA's concerns over escalating 
corn prices, and reviewed the status of the WTO rice market access 
case. End summary. 
 
¶2.  (SBU) Director Young and COA Chairman Su held their third 
meeting in the last ten months on January 25.  Each session has 
demonstrated the Chairman's broad political expertise and his keen 
interest in Taiwan's overall political environment including, of 
course, the political context of the agricultural issues he must 
manage.  Director Young opened with a report of his January 3 
meeting with USDA Secretary Johanns in Washington, D.C., noting that 
while serving as Governor of Nebraska, the Secretary traveled to 
Taiwan more than once.  The Secretary was joined in the DC meeting 
by the newly arrived Under Secretary for Farm and Foreign 
Agricultural Services, Mark Keenum.  The Director related Secretary 
Johanns' great interest in Taiwan's current situation and the status 
of the overall trade and economic relationship.  In particular, the 
Director noted, Secretary Johanns is quite interested in seeing that 
the CCA be established in order to strengthen the existing 
agricultural relationship between the United States and Taiwan. 
 
¶3.  (SBU) Moving on to the specifics of the CCA, the Director 
proposed that we target spring as the time to hold the first CCA 
meeting in Taipei.  A senior USDA official will represent the U.S. 
side in convening this inaugural session and will lead a group of 
experts who will participate in the meetings.  Specific dates depend 
on the availability of appropriate officials from both sides. 
Chairman Su agreed with that proposal and suggested that 
AIT/Agriculture and COA's International Cooperation staff coordinate 
over coming weeks to develop a precise planning timeline and draft 
agenda for the CCA.  This coordination is already underway. 
Chairman Su added that differences over specific wording in the 
documents that will formalize the CCA have been resolved and he 
expected that the remaining administrative procedures in Taiwan, 
clearance by the EY and notification to the LY, can be wrapped up 
before the start of the Spring Festival on February 17. 
 
¶4.  (SBU) Chairman Su picked up on an earlier comment by the 
Director regarding Secretary Johanns' review of the global corn 
situation to describe the detrimental impact current high corn 
prices have on Taiwan's livestock sector.  The rise in production 
costs is putting an economic squeeze on hog and poultry producers. 
One consequence is pressure by hog producers to import corn from 
China.  (See reftel for a more detailed analysis of this situation). 
 The Chairman noted that there are no barriers to prevent Taiwan 
companies from purchasing Chinese corn.  In his view, if the United 
States loses market share due to current high prices, it will prove 
difficult to regain these sales in the future.  (Comment: Taiwan 
companies have so far been unable to agree with Chin on a 
reasonable price for its corn.  China's corn prices are currently 
about the same as U.S. prices, and Taiwan users demand a discounted 
price due to the poorer quality of Chinese corn. End Comment) The 
Director pointed out that high corn prices are affecting users 
around the world, including the United States. This largely reflects 
growing demand for corn by the biofuels sector.  He also noted the 
visit to Taiwan on February 1 by senior executives from the U.S. 
Grains Council who will meet with COA to discuss this situation. 
 
¶5.  (SBU) Moving from corn to rice, Chairman Su described Taiwan's 
concern that Australia was objecting to terms of the side agreement 
already negotiated with the United States.  The side agreements must 
be in place before Taiwan will notify its new rice import regime to 
the WTO, thereby ending the five-year WTO dispute over rice market 
access.  He also said Taiwan was concerned that Egypt will file a 
WTO objection once Taiwan notifies its new import regime, while 
discounting the threat of an objection from Vietnam.  The Director 
noted that our bilateral agreement with Taiwan says the United 
States will help Taiwan respond to any WTO objections. 
 
 
¶6.  (SBU) Comment:  The corn and rice issues raised in this meeting 
illustrate the value of a mechanism like the CCA to focus regular, 
high-level attention on trade, market access, and policy problems 
that affect U.S. interests in our sixth-largest agricultural market. 
 COA's earlier misgivings over the CCA appear to have given way to a 
more proactive desire to deepen its agricultural relationship with 
the United States through this consultative framework.  Support for 
the CCA now seems well established at the highest levels.  In coming 
weeks, it will be important for both sides to establish a 
constructive timeline and meaningful agenda for the first CCA 
meeting in Taipei.  Similarly, USDA should begin determining the 
availability of the appropriate senior official to lead the U.S. 
delegation.  End comment. 
 
YOUNG