Taipei, 11 November 1971
Secret Austeo
I am not sure whether you will send me any background on the PM’s talks in Washington1 to chew over before I come down on leave and consultations. That would be useful, but I appreciate that you might think it preferable to talk in person in Canberra.
2. In the absence of other than inferences as to how Departmental thinking may be developing, but in the belief that the ‘Trade Commission’ line in my telegram 8022 may have some attraction, the following views must be very tentative.
3. I imagine that there may at present be several schools of thought as to how we should proceed. One might for example argue with some force in favour of
(a) maintaining present representation here until we reach an acceptable agreement with Peking;
(b) removing all official presence from Taiwan as early as possible in order to deal more freely with Peking;
(c) finding some middle course.
4. I, myself, would favour course (c).
5. As I see it, the main disadvantage with (a) is that it would demonstrate no acceptance of the new situation in regard to China that now exists. Moreover, if, after making no change here, we did reach agreement with Peking, we would then have to make a very rapid switch from one extreme to the other. Some confusion might follow and, inter alia, damage our solid trade interest here. While it is not an overriding consideration, I also do not think it is very desirable or dignified to have an Ambassador or Charge told to leave by an erstwhile friend, as has been the case with Turkey and Peru (so far). Perhaps we can do better than that.
6. The disadvantages of course (b) in para 3 above, as I see them, are that immediate abandonment of Taiwan might cause the Government major problems with the US and Japan in particular; it would look very like the offhand dumping of an old associate; our trade with Taiwan might again presumably be set back (possibly more than in case (a) since a too rapid withdrawal could cause more resentment here than a final switch for which we could, over a period, have prepared the ROC; and it would deprive us of any opportunity to assist or influence the ROC’s adjustment to its new international position.
7. Even if course (c) is favoured, there are various possibilities, including
(a) leaving the Embassy under a Charged’ Affaires. (But this would seem to me—and I think to Peking—a futile and empty gesture.);
(b) changing our representation to a Trade Commission and standing absolutely pat on that position for the duration of the present Government. One might argue (i) that we would have more flexibility with Peking; (ii) that the PRC might (conceivably but in my view doubtfully) come round eventually to accepting that we have limited but permanent, legitimate and non–political interests in Taiwan which we are determined to protect, and (iii) that our position would be entirely defensible publicly and not inconsistent with past positions;
(c)changing our representation, in the next few months, to a Trade Commission, but regarding this as an interim position, to be adjusted as necessary whenever it is necessary or politic to do so.
8. Once again, I would favour course (c). Such a change, made by our own unilateral decision and without exploratory talks with the PRC or ROC, could be represented to Peking as a sign of our serious intent. It would leave us with non–political official representation here as a minor, even if, in the longer run, only temporary, bargaining card with Peking. (The Embassy as such is not a card since we all know it will have to go if we want to come to terms with the PRC. It would make it more difficult to keep trade representation if the trade section was a part of the Embassy at the time of decision.) We would have somewhat greater flexibility in dealing with Peking. We would also satisfy ROC supporters (to some extent) by not making a total and immediate break. We would gain time to prepare the ROC for some change; we could make flexible public statements, so that when we actually told the ROC what we would do, it might even be a pleasant surprise that we were not withdrawing entirely. (I cannot stress too much that courteous, though firm, dealings with the ROC can pay dividends in such matters as trade relations. Abruptness and discourtesy would cause us to pay needless penalties.) Such a change would also make it easier for us to continue to lower our profile gradually than any other; and a run–down of the sort proposed would have many administrative advantages over the abrupt closure of even a small Embassy such as this (sorting out property matters etc.).
9. It would of course be a major question for the Government whether, in time, it should go beyond this change to the closure of the Trade Commission also, and possibly try to transfer trade promotion activities to some form of ‘unofficial’ representation. Such a decision could hinge on the logic (in view of past policies) of accepting the PRC as the ’sole legitimate Government of China’. I look forward to talking about this aspect with you in December. My main point in this letter is that even a final step would also be eased by the sort of transitional arrangements suggested above. Gradualism would also give you more time to sort out the many problems which would have to be faced (our Trade Agreement with the ROC, our participation in the ASPAC FFTC, ownership of the ROC Embassy in Canberra etc.). Your boys are no doubt making a growing list of such problems even if they cannot yet address themselves to solutions.
10. Timing would be an interesting aspect of the whole exercise. Some of the key elements in timing seem to me to be:
(a) President Nixon’s visit to Peking and its likely outcome—about which I trust that you by now know much more than I.
(b) The inauguration of a new (or old) President here next May. My own view is that we should have any change we wish to make largely completed by then, and that we should have neither a special representative or even an Ambassador here to take part in the festivities. We might however send a flat and formal message on the occasion (assuming we were still in relations with the ROC at that point), and have the Trade Commissioner attend—or even a Charge d’Affaires if the change–over were not quite complete—without annoying Peking too much.
(c) The time required to persuade the ROC of the necessity and inevitability of this change, and to have them accept it with reasonable grace.
11. The timing of elections in Australia may of course also be relevant.
12. The sort of scenario I would envisage as being workable could be along thefollowing lines:
(a) November 1971–January 1972. A further round or rounds of talks with the PRC in which we might go through the ritual of proposing various ideas for developing normal relations—trade missions to the mainland, formulas for recognition which avoid the problems which the Canadian one poses for us etc. Presumably all this would be mere formality and result in no sign of give from the PRC.
(b) January/February 1972. Assess results of President Nixon’s visit (if it has taken place by then). Consultations with Americans.
(c) Soon after my return to Taipei in February presentation of a letter to the ROC (either to Sampson Shen in Canberra or the Foreign Minister here) informing it of the Government’s decision to close the Embassy in Taipei. It would be important that full, cogent and courteous reasons be given (including our Departmental personnel shortages, which the ROC won’t believe but might see as a slight face–saver). This decision would be firmly stated to be unchangeable, but the hope could be expressed that the ROC would allow us to maintain a Trade Commission in Taipei. The proposed composition of the Trade Commission and the status we would desire for it (privileges, immunities and communications facilities etc.) should be clearly defined taking into account what we wanted and could reasonably expect the ROC to grant. The ROC could be politely told it could have such Australian representation in Taipei or nothing. (It seems quite possible to me that it would accept, partly in the belief that, so long as we have any form of official representation here, we will get nowhere with Peking.) It could possibly be made clear that, at that stage, we had no intention of breaking relations with the ROC, or of asking it to remove its Embassy from Canberra.
(d) Armed with suitable background arguments, I could attempt to persuade the ROC to accept the Trade Commission idea and grant adequate privileges. In doing so, I could draw heavily on good will for Australia existing here, including that of the carefully–cultivated Chiang Ching-kuo.
(e) Having, hopefully, gained the ROC’s agreement to this proposal, we could close the Embassy and establish the Trade Commission with visa–issuing powers and some hold–over FA personnel seconded to Trade. A Foreign Affairs Section would be desirable at least until the political relationship stabilises. I and some others would leave (less popular than before but at least not thrown out!). Some administrative and secretarial FA staff could be seconded to the Trade Commission in the initial stages until its viability and ultimate prospects can be assessed. All this to be done by about April at the latest.
(f) Having taken these steps, we could return to negotiations with the PRC, point to the significance of the closure of the Embassy in Taipei as a proof of our sincerity and goodwill in seeking normal relations, and ask which of our earlier requests (for visiting or resident trade missions on the mainland etc.) Peking was now disposed to grant. If the PRC predictably pointed to the Trade Commission as an impediment, we could speak of its non–political nature, which would not affect the PRC’s claims to sovereignty in any way. There are presumably parallels we could draw—our Trade Commissions in Calcutta or Bombay did not affect Delhi’s sovereignty, and there have been or are other cases in the US—Chicago?—I think. I don’t see why we couldn’t go so far as to say that the PRC accepts an official British presence in Hong Kong while still maintaining its claim to that territory. Has it claims to Macao also? It would of course be a matter for later decision how long we would seek to stand on this position.
13. If we move along the above lines we should take into account the probability that we shall have informal responsibility for British interests by that time and ensure that we have adequate staff to enable us to discharge our responsibilities.
14. It may be that thinking in Canberra has progressed too far for this line of thought to be fully taken aboard. It may be thought optimistic rather than realistic. I hope not. I think it basically pretty practical, though hard to stick to. I do not think that the fact that it is a new approach for which there are no precedents is necessarily an argument against it. In any event, I look forward to talking it and alternative courses over with you soon. I myself think it quite essential to start making appropriate changes fairly soon, i.e.—to define our line of movement and to keep moving in the agreed direction.
[NAA: A1838, 3107/38/18, xxii]
1 McMahon departed Canberra on 27 October en route to the United States and Britain. He returned on 18 November after discussions with President Nixon and UK Prime Minister Edward Heath.
2 12 November. It supplemented a memorandum from the Embassy of 1 November, in which it had been suggested that the ROC would be amenable to ‘reasonable suggestions’ regarding the opening of an unofficial office in Taipei. The cablegram gave further information as to the manner in which trade with the ROC was managed by countries with no formal relations with Taipei.