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C O N F I D E N T I A L SECTION 01 OF 04 TAIPEI 002933 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 08/23/2016 
TAGS: PREL PM CS HO BH NU TP CH TW
SUBJECT: FOREIGN MINISTER HUANG ON HIS CENTRAL AMERICA 
TRIP, FUTURE TAIWAN FOREIGN POLICY 
 
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 
Summary. 
 
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 00002933  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 00002933  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 
 
SIPDIS 
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 00002933  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. 
 
YOUNG