VZCZCXYZ0010
RR RUEHWEB

DE RUEHIN #0767/01 0960847
ZNR UUUUU ZZH
R 060847Z APR 07
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 4777
INFO RUEHBJ/AMEMBASSY BEIJING 6603
RUEHHK/AMCONSUL HONG KONG 7854

UNCLAS AIT TAIPEI 000767 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR INR/R/MR, EAP/TC, EAP/PA, EAP/PD - LLOYD NEIGHBORS 
DEPARTMENT PASS AIT/WASHINGTON 
 
E.O. 12958: N/A 
TAGS: OPRC KMDR KPAO TW
SUBJECT: MEDIA REACTION: U.S.-ROK FREE TRADE AGREEMENT, U.S.-TAIWAN 
ARMS DEAL 
 
 
¶1. Summary:  Taiwan's major Chinese-language dailies focused news 
coverage April 5-6 on the military helicopter crash Tuesday 
afternoon, on the Executive Yuan's plan to lift the ban on gambling 
on horse and car racing in central and southern Taiwan, and on the 
year-end legislators' elections and 2008 presidential elections. 
The pro-status quo "China Times" carried an exclusive report on page 
four April 6 with the headline, "Lobbying Irritates the State 
Department, Taiwan Terminates Contract with BGR."  The sub-headline 
added "Spending Humongous Sums on Contracting a Public Relations 
Company, Yet [the Move] Unexpectedly Endangers U.S.-Taiwan 
Relations." 
 
¶2. In terms of editorials and commentaries, a "China Times" 
editorial discussed the possible impact of the U.S.-ROK free trade 
agreement on Taiwan's economy.  The article said Taiwan will be 
marginalized and become another Cuba if it loses its economic 
strength.  An editorial in the limited-circulation, 
pro-independence, English-language "Taipei Times," on the other 
hand, discussed the aftermath of the military helicopter crash.  The 
article urged Taiwan's legislators to "pass the military budget 
bills currently stalled in the legislature and to include within 
them the budget required to provide a safer and more efficient 
environment for the nation's military personnel."  End summary. 
 
¶3. U.S.-ROK Free Trade Agreement 
 
"Does Taiwan Want to Become 'Another Cuba'?" 
 
The pro-status quo "China Times" [circulation: 400,000] 
editorialized (4/5): 
 
"... When countries in Southeast Asia were ready to sign free trade 
agreements (FTA) [with each other] one after the other, the United 
States also accelerated its pace by signing FTAs with economies such 
as South Korea.  The move was of course meant to thwart China's 
expanding alliance with other countries in the region and to meet 
the United States' own interests as well.  It is a fact generally 
acknowledged by the entire world that both mainland China and the 
Southeast Asian nations will be the world's factories and markets in 
the next few years.  Once ASEAN-plus-N is formed, economic members 
in the world such as the United States will naturally hope to sign 
an FTA with it in an attempt to get a piece of the pie.  Likewise, 
countries such as Japan and South Korea that covet the huge market 
and consummation ability of the United States are also interested in 
signing such agreements with the United States and ASEAN.  As more 
and more countries sign FTAs, the potential trade interests 
intertwining among them will expand like the Internet.  This is a 
main reason why Taiwan must not look down on the follow-on 
development [of this trend].  When countries in the Asia-Pacific 
area sign FTAs with each other, it will be akin to removing trade 
barriers between them, and Taiwan will become the only country 
excluded [from this net], with all the trade barriers it has with 
other nations still in place.  Taiwan will be like an orphan in the 
international community, completely 'marginalized.'  Should this 
happen, more Taiwan industries will lose their comparative 
advantage, and the hollowing out of the island's industries will 
accelerate.  In a nutshell, only a few industries in Taiwan were 
hollowing out previously, but as Taiwan becomes marginalized, the 
island will encounter the crisis of a number of its industries 
hollowing out. 
 
"In the face of such an obvious and perilous situation, what is most 
pitiful is the stubbornness of the fundamentalists.  It is a 
well-known fact that China's obstruction is the main reason why 
Taiwan is unable to sign FTAs with other countries.  To put it in 
plain language, the entire design of the ASEAN-plus-N is nothing but 
a strategy, whereas mainland China intends to use its trade and 
economic strength to blockade Taiwan.  In the face of such an 
obvious scheme on the part of Beijing, the Taiwan authorities not 
only are at their wit's end but also lack the wisdom to feign 
civility.  Moreover, the island is constantly engaging in efforts to 
change its name, to write a new constitution, to strive for the Four 
Wants, to de-Sinify, and to divide its ethnic groups -- all moves 
aimed at stymieing cross-Strait relations.  Taiwan can certainly 
maintain a distance from Beijing politically, but despite 
everything, we cannot afford to lose our economic strength.  What 
else will we be able to do except for turning our protests into 
domestic consumption during campaigns, when we hit a dead end while 
Beijing tries its best to blockade us economically?" 
 
¶4. U.S.-Taiwan Arms Deal 
 
"Cleaning the Military Cupboard" 
 
The pro-independence, English-language "Taipei Times" [circulation: 
30,000] editorialized (4/5): 
 
"... As the nation mourned the loss of some of the country's elite 
ARMS DEAL 
 
military personnel, legislators were quick to play the blame game, 
with the pan-greens saying the pan-blues' blocking of the arms 
budget bills had a direct bearing on Tuesday's [UH-1H helicopter 
crash] accident.  The pan-blues, on the other hand, slammed the 
pan-greens for being so busy trying to please the US that they had 
failed to attend to the need for equipment upgrades outside of the 
three major weapon systems offered by the US. ...  We urge lawmakers 
to pass the military budget bills currently stalled in the 
legislature, and to include within them the budget required to 
provide a safer and more efficient working environment for the 
nation's military personnel. ..." 
 
WANG