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00THEHAGUE1676 2000-06-06 13:39:00 UNCLASSIFIED Embassy The Hague
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					  UNCLAS SECTION 01 OF 02 THE HAGUE 001676 


E.O. 12958: N/A


1. Secretary of Transportation Rodney Slater visited the
Netherlands May 31 and June 1 to discuss transportation
issues with Dutch government and private sector officials.
Although front-burner issues such as hushkits were mentioned,
most of the conversations were broader, touching on the
future of the airline industry, road safety, shipping
regulation, and areas for future U.S.-Dutch cooperation.
Dutch Minister of Transportation Netelenbos sought U.S.
support for strengthening ICAO and for cooperation on
promoting international, rather than regional, rules for
regulation of shipping safety. Secretary Slater described
DOT's efforts to consider the future of transportation --
looking twenty-five years ahead -- and encouraged the Dutch
government and key private sector representatives (e.g., of
KLM and the Port of Rotterdam) to send representatives to
DOT's October 2000 conference in Washington. End summary.

2. Secretary Slater was accompanied during his visit to the
Netherlands by the following DOT officials: Deputy Chief of
Staff Norma Krayem, Deputy Assistant Secretary for Aviation
and International Affairs Bradley Mims, Office of
International Transportation Director Bernestine Allen,
Assistant to the Secretary for Public Affairs Mary Trupo, and
Director for Scheduling and Advance Natalie Hartman.

Dutch Government Views


3. During a June 1 meeting with Minister Netelenbos and
ministry officials, the Dutch government representatives made
the following key points:

-- The government of the Netherlands remains concerned with
implementation of the Hatch amendment.

-- "Civil servants will have to work hard" to shepherd the
hushkit issue through the ICAO dispute settlement procedure.
It is good that the issue is being handled through
appropriate means. More generally, ICAO needs to be
strengthened by speeding up its procedures and through an
input of political muscle. It is too much "an organization
of civil servants."

-- The Dutch are interested in reports of a possible United
Airlines/U.S. Air merger, and, indeed, in the future general
direction of airline mergers. "We want competition, but
understand that it is a tough industry for individual
airlines to survive in." The Dutch government is not privy
to KLM's thinking, but understands that KLM has been
approached by Portuguese, Greek, and Central European
airlines interested in discussing merger opportunities.
(Comment. Recent media reports indicate the possibility of a
KLM/British Airways merger. End comment.) The Dutch would
be interested in learning of USG views on means of ensuring
an appropriate level of competition among airlines.

-- Minister Netelenbos supports privatization of air traffic
control, in part because she believes ministry management of
air traffic control experts makes little sense. However,
privatized control seeks to maintain a share of control,
while what is needed in Europe is consolidation. One
alternative is for the government to grant a concession to a
private air traffic controller, with the understanding that
the concession could be withdrawn if performance was
inadequate. Eurocontrol should take over management of high
altitude flights over Europe, but the militaries and the
French government resist this idea.

-- The Dutch government is concerned that the French
government's enthusiasm for new shipping safety regulations,
in the wake of the sinking of the tanker Erika off the coast
of Brittany, is leading to proposed regulations that have not
been adequately considered. Funding of enforcement,
shipbuilding capacity, and effects on shipping prices need
study. Moreover, because the proposals are unlikely to
achieve world-wide acceptance, their imposition on a European
regional basis would drive substandard vessels towards Asia
-- something Japan would resist. It would be better for the
U.S., EU, and Japan to consider common rules. (In an aside,
Netelenbos wished the French would begin by enforcing
existing regulations. She also noted that the Netherlands
had offered voluntarily to remove the still-leaking Erika
from the sea bed, an offer the French turned down.)

-- Contrary to the Kyoto Protocol, CO2 is not diminishing
but increasing, and industry must conform to CO2 reductions.
Government and industry must address the negative impact of
road and air traffic growth.

4. Secretary Slater said that the U.S. and the Netherlands
have similar interests in ensuring air safety and noise
reduction. That should make solutions to outstanding issues
possible. It is necessary to get the hushkits dispute out of
the way so we can move forward on the more important Stage IV
noise level discussions. The Secretary said that he could
not yet comment on the possible merger between U.S. airlines
because the facts are still forthcoming. He noted that DOT
is undertaking a long-term study of transportation needs and
welcomes international comments and involvement.

Dutch Industry Views


5. The Secretary met on May 31 with leading Dutch private
sector representatives at a meeting organized by the VNO-NCW
(Dutch industry federation). Following were the main
discussion points:

-- Schiphol airport, Europe's fourth busiest, needs to grow
in order to afford investments required to remain
competitive. The overall approach is to apply an overall
"noise budget" to Schiphol, within which it must optimize its
traffic. Schiphol would like to establish freight service to
and from Atlanta to become an even greater gateway for
U.S.-EU trade. (Mr. Verboom, Schiphol Airport)

-- Container cargo is rapidly increasing. The Port of
Rotterdam, already the world's largest, expects to increase
the number of containers it handles from the current 6
million a year to 12 million a year over the next twelve
years. Cargo handling is becoming a high technology industry
and calls out for standardization of new technologies between
the U.S. and EU. (J.M. Dekkers, Europe Combined Terminals BV)

-- There is concern in Europe that the U.S. is moving
towards a new 47-foot container standard, in addition to the
current 20 and 40-foot containers. This would complicate
transatlantic cargo movement. The U.S. and EU should
consider common standard container sizes. (Th. W. Aris,
Transport Management International)

-- The Dutch have begun a radical rethinking of highway
safety, introducing the concept of "sustainable safety," and
would appreciate communication with U.S. experts in the
field. The current annual highway death toll in the
Netherlands is 1,000 per year. The goal should be to reduce
it by a factor of ten. (F.C.M. Wegman, Dutch Institute for
Road Safety)

6. Secretary Slater told the private sector gathering that
the Administration has taken a strong position that
transportation is a policy area that requires close
government-private sector partnership. It is also a policy
area that requires long-term and forward-looking examination.
DOT has therefore initiated a policy of looking towards the
transportation needs of 2025 in close conjunction with
industry. Globalization is a fact and transportation an
integral part of it. DOT welcomes contact with European
governments and the private sector and looks forward to their
participation in a major conference that DOT will host in
Washington in October.

P.S. The Ubiquitous Dutch Bicycle


7. No discussion of transportation in the Netherlands is
complete without mention of the bicycle. Dutch officials,
including Minister Netelenbos and Ton Welleman, Project
Manager of the Dutch Bicycle Master Plan for the Transport
Ministry, were skeptical that the Dutch experience has much
to offer to the U.S., but were pleased that the bicycle
remains center stage in the Netherlands, with 6 million
bicycles used for 30 percent of all travel within the
country. The current problem for the Netherlands is the
600,000 bicycle thefts which occur annually, a problem the
Ministry is considering addressing by inserting computer
chips into bicycles. Both Minister Netelenbos and Ton
Welleman, to the surprise of the U.S. delegation, were
adamant that mandatory helmet laws even for children made no
sense for the Netherlands. Accident rates are low, the Dutch
are good bicyclists, and (more to the point) no government
could propose such a measure because it would be universally
condemned and ignored. Secretary Slater replied that the
U.S., and particularly individual cities, are more
enthusiastic about increasing bicycle use than the Dutch
might think.