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Cablegate: Foreign Minister Huang On His Central America

DE RUEHIN #2921/01 2352207
O 232207Z AUG 06

C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 002921





E.O. 12958: DECL: 08/23/2016

REF: A. TAIPEI 02800
B. TAIPEI 133192

Classified By: AIT Director Stephen M. Young. Reason(s):
1.4 (B/D)

1. (C) Summary. Taiwan Foreign Minister James Huang
believes his visit to Central America last week shored up
Taiwan's fragile relations with Panama, Costa Rica and
Honduras. He remains deeply concerned, however, that Daniel
Ortega might win the November presidential election in
Nicaragua and shift relations from Taipei to Beijing, and
that Sao Tome and Principe is Beijing's next diplomatic
target after facilitating the break in relations between
Taiwan and Chad earlier this month. Huang explained that
economic development and humanitarian assistance programs,
the bulwark of Taiwan's relations with Panama, Costa Rica and
Honduras, will become the basis of Taiwan's efforts to create
a new, more substantive foreign policy, one less focused on
world-wide jousting with Beijing for diplomatic partners.
Other officials, however, are less optimistic that Huang can
transform Taiwan's "dollar diplomacy" in the face of the Chad
setback and Chen Shui-bian's embattled presidency. End

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Stabilizing Relations with Panama, Costa Rica and Honduras
--------------------------------------------- -------------

2. (C) In the Director's courtesy call on Foreign Minister
James Huang (Chih-fang) to introduce new Deputy Director Bob
Wang, Huang expressed appreciation for U.S. transit
assistance on his visit last week to Central America. The
visit, he said, had helped stabilize Taiwan relations with
Panama, Costa Rica, and Honduras. Huang detailed his visits
to those three countries:

-- Panama: Huang told the Director that his visit received
excellent press coverage in Panama and that his meetings with
President Torrijos and Vice President Lewis Navarro had gone
very well and functioned to reinvigorate the relationship.
The three men discussed a number of cooperative projects over
the next three years, including Taiwan participation in
construction to expand the Canal, set to begin after an
October 22 referendum. Acknowledging that China was "as
always" continuing to press Panama to break relations with
Taiwan, Huang insisted that in his meeting President Torrijos
did not seem concerned by this pressure.

-- Costa Rica: Huang felt his visit to Costa Rica and
meeting with President Arias reinforced bilateral relations.
In San Jose, he signed a bilateral MOU for a series of
projects: (1) USD 50 million for the reconstruction of a
hospital destroyed by fire (which "will benefit millions," he
said), (2) USD 2 million for a housing project for poor
people in the northern part of the country, and (3)
assistance on police training (particularly important, he
noted, in a country which has no armed forces and a spiraling
crime rate).

-- Honduras: Since President Zelaya was relatively new in
office, Huang told the Director, Taiwan's major need there is
to consolidate relations, which he believed his visit had
helped accomplish.

3. (3) In response to the Director's inquiry on Huang's
further travel plans in Latin America this year, Huang
replied that he might visit Belize for the 25th anniversary
of independence on September 21. Prime Minister Musa had
invited President Chen Shui-bian to attend the celebration,
and Huang might go in Chen's stead. Noting that he had told
the press that politics should not affect foreign affairs,

TAIPEI 00002921 002 OF 004

Huang insisted Taiwan would not cease its senior level trips
abroad, including that of President Chen to Palau in
September. (Note: Huang did acknowledge that the impending
"Depose Chen" street demonstrations might inhibit access to
MOFA and suggested the Director might have to enter through
the rear entrance of the building. The media, Huang lamented
in a nonsequitur, is now "ruling the country." End Note.)

Nicaragua Relations Hanging in the Balance

4. (C) Noting that Nicaraguan Ambassador Marcos Garcia had
expressed concern to him earlier that day about the upcoming
November 5 presidential election and the possibility of an
Ortega victory, the Director asked for FM Huang's assessment
of the political situation in Nicaragua and the prospects for
Taiwan relations with Nicaragua. Huang responded that
Nicaragua remains especially worrisome in the run up to the
election, with the most recent polls giving Ortega a slight
lead over Montealegre, 31 to 29 percent, and the other two
candidates trailing at 15 and 12 percent. This could put
Ortega within striking distance of a first-ballot victory.
If he received at least 35 percent of the vote with a 5
percent margin over his closest rival, Huang said, Ortega
could win the presidency outright and avoid a run-off. While
he was quite worried about the possibility of an Ortega
victory, Huang told the Director, Taiwan was working to
maintain ties to all political parties in Nicaragua to give
Taiwan options no matter who wins. If Ortega wins, Huang
noted resignedly, Taiwan would just "go from there."

5. (C) The Director encouraged FM Huang to keep Taiwan
low-key toward the Nicaraguan elections, noting that while
the U.S. privately has its views on the candidates, our
official position is to affirm publicly our support for
Nicaragua's democratic process. The Director passed on
Ambassador Garcia's report that Ortega himself had waited for
several years after assuming the presidency in the 1970s
before he broke ties with Taiwan, to which Huang added that
when Taiwan resumed relations with Nicaragua in 1989 after it
had negotiated with Ortega's brother.

6. (C) (Comment: Ambassador Garcia told the Director
earlier on August 22 that he anticipated there would be a
run-off between Ortega and Montealegre, since neither would
likely gain either the 40 percent plurality or a five percent
lead if their total vote was between 35-40 percent required
by Nicaraguan election law to win outright in the first
round. Garcia admitted that contributions from foreign
businessmen were legal under Nicaraguan law, but cautioned
that any sign the Taiwan government was trying to influence
the contest would be received very badly within his country.
That is why, he said, Nicaragua has discouraged visits by FM
Huang and other high level Taiwan officials in recent months.
End Comment)

Sao Tome and Principe: PRC's Next Target?

7. (C) FM Huang raised Taiwan concerns about its relations
with Sao Tome and Principe, stating that it appeared Beijing
was targeting Sao Tome next after Chad in its drive to
isolate Taiwan internationally at the same time it sought to
gain access to more oil resources. Sao Tome's offshore oil
fields, Huang explained, are tied into Nigeria's offshore
fields, and Beijing is seeking to exert diplomatic pressure
on Sao Tome via its relations with Nigeria. (Comment: The
implication seemed to be that if Sao Tome balked, it might
find its oil fields being tapped by Nigeria. End Comment.)

TAIPEI 00002921 003 OF 004

Future Directions in Taiwan Foreign Policy

8. (C) Noting FM Huang's late July comments to the press
about a "new diplomacy" for Taiwan and Premier Su
Tseng-chang's proposal last week for a more "substantive

diplomacy" rather than an exclusive focus on the number of
diplomatic allies, the Director inquired about future
directions in Taiwan foreign policy. Had the shock of the
recent break in relations with Chad, he asked, affected this
search for a new Taiwan foreign policy?

9. (C) FM Huang responded that Taiwan needed a new foreign
policy strategy, one that reflected what Taiwan could offer
the world. While Taiwan must continue doing all that it
could to maintain its diplomatic relations, he said, it also
must work to expand its informal relations with other
countries. Pointing out that this would require a lot of
creativity and ingenuity by Taiwan, the Director stressed the
importance of Taiwan not doing anything to undermine
democratic regimes. Huang responded that his ideas for a new
foreign policy and his public announcement in July were
intended to distinguish Taiwan from China and to put
democratic and human rights values at the forefront of
Taiwan's foreign policy.

10. (C) At the same time, Huang told the Director, Taiwan
would continue focusing on its relations with the U.S., "the
most important of Taiwan's important relations." Following
the DPRK missile launches in early July, he explained, he had
convened an interagency meeting to discuss Taiwan's response.
The resulting decision to tighten up Taiwan's report control
regime vis-a-vis the DPRK, he pointed out, had been conveyed
to AIT last week (see Ref A). After the interdicted airline
bombings in London last week, Huang continued, he had
directed all Taiwan missions in Europe and South and
Southeast Asia to "take special consideration" in issuing
visas to Pakistani nationals, since 24 of the plotters
arrested were Pakistani nationals.

11. (C) The Director expressed appreciation for Taiwan
assistance on proliferation and terrorism issues, stressing
that it was important for the U.S. and Taiwan to continue
working closely together. The Director then gave FM Huang a
copy of the talking points on U.S. concern over the Swedish
exclusion of Taiwan from AMRAAM International Working Group
meetings in Sweden (Ref B), stressing the U.S. would not sit
idly by if this was repeated in the future. Huang expressed
appreciation for the strong U.S. position in support of
Taiwan participation in AMRAAM IWG activities.

Comment: Diplomatic Creativity in a Time of Turmoil
--------------------------------------------- -------

12. (C) FM Huang's and Premier Su's efforts to develop a
new, more "substantive" diplomacy for Taiwan is something AIT
has long been urging on Taiwan authorities. The Director has
repeatedly urged senior Taiwan leaders to reach out to the
world on the basis of Taiwan's "comparative advantages" --
its experience with hugely successful economic development
and political democratization -- rather than focusing solely
on the diplomatic numbers game, which it can never win
against a rising China. Criticism by New Zealand last week
of Taiwan's destabilizing influence in the Solomon Islands
highlights the negative impact of Taiwan's traditional
"recognition diplomacy," often labeled "dollar diplomacy."
(FM Huang, however, bitterly complained to the Director that
the New Zealand criticism was unfair because, he pointed out,
PRC diplomacy was really "much worse.")

13. (C) The new diplomacy of which FM Huang and Premier Su

TAIPEI 00002921 004 OF 004

speak will not be an easy task, and it is one that has been
rendered more difficult by the shock to Taiwan of its break
in relations with Chad earlier this month. On the other
hand, this shock may also spur consideration of new
approaches. NSC Senior Counsellor Lin Cheng-wei told AIT
this week that FM Huang and President Chen are under heavy
pressure over the Chad "loss." Because PM Su is buffered on
this particular issue, he may have a bit more political space
to prognosticate foreign policy changes, as he did last week
both in his weekly cabinet meeting and when he met with the
Director. Since FM Huang, along with the President himself,
will be held publicly and politically accountable for further
diplomatic losses, however, Huang may have been forced back
into the bottom-line diplomatic numbers scramble before he
can safely proceed with his touted new, or Su's more
pragmatic diplomacy.


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