ITALY'S EU PRESIDENCY: U.S./EU TASK FORCE

UNCLAS ROME 003360

SIPDIS


SENSITIVE

E.O. 12958: N/A
TAGS: ECON PREL PGOV MOPS IT EUN
SUBJECT: ITALY'S EU PRESIDENCY: U.S./EU TASK FORCE
DISCUSSIONS


1. (U) U.S., Commission and Council officials and
representatives of the Italian EU Presidency discussed a wide
range of subjects, from the U.S. Passenger Name Record and
Container Security Initiatives to Europe's efforts to assist
Africa, at the July 18th U.S./EU task force meeting in Rome.

Task Force Participants
--------------

U.S.
--------------
Chuck English, Director, Office of European Affairs, State
Department
Scott Kilner, Minister Counselor for Economic Affairs, U.S.
Embassy Rome
Steve Cristina, Economic Counselor, U.S. Mission to the
European Union
Marja Verloop, EU Desk Officer, State Department
Kathleen Doherty, Economic Officer, U.S. Embassy Rome
(notetaker)

Italian Presidency
--------------
Sandro De Bernardin, Task Force Coordinator, Ministry of
Foreign Affairs
Massimo Gaiani, Director, EU external relations division, MFA
Andrea Sama, EU External Relations division, MFA

Council Secretariat
--------------
Jim Cloos
Massimo Parnisari
European Commission
--------------
Percy Westerlund
Luc Veron
Luisa Ragher
David Tirr
Philippe Coessens (EU Delegation in Washington)

Passenger Name Record (PNR)
--------------


2. (SBU) Commission officials argued that the March
U.S/Commission interim agreement was legally frail and, as
such, was severely attacked by the European Parliament and
Data Privacy Authorities (Article 29 Committee members).
Although acknowledging that the U.S., in a good-faith effort,
has taken several steps to address Commission and member
states' concerns, the U.S. must do more, Commission officials
remarked. Key EU demands were highlighted in Bolkestein's
June 16 letter to Secretary Ridge. They included a
limitation of USG use of PNR data to counter-terrorism, but
not law enforcement; deletion of all PNR data defined as
sensitive by EU Law once Customs and Border Police (CBP) and
the Transportation Security Administration (TSA) receive it;
provision of a system of passenger redress to an independent,
non-USG body. Commission officials reiterated what
Commissioner Patten recently told DHS Deputy Secretary Gordon
England: agreement on PNR must be reached by end of July to
avoid negative adequacy findings in September. The Italian
Presidency underscored the political importance of this
issue, domestically within EU member states and for all of
the EU. It is a question of compatibility of security
demands with national laws and civil liberties, GOI officials
contended.


3. (SBU) English acknowledged that the talks between DepSec
England and Patten revealed that fundamental differences
still remain. Addressing Bolkestein's questions, the U.S. is
hopeful that there might be a way forward on the limitation
of scope question. The EU has proposed a scope of "terrorism
and related crimes;" the U.S.' wording is terrorism and
serious offenses. U.S. Customs, by its charter as a law
enforcement agency, can not ignore serious felonies such as
murder and drug smuggling, English stated. On sensitive
data, the U.S. has moved much closer to the EU position and
hopes fields for immediate deletion can be identified.
Commission officials concurred. On the independent review
question, the U.S. side pointed out that Nuala Kelly, Chief
Privacy Officer, Department of Homeland Security, has an
independent role and reports directly to both Secretary Ridge
and to Congress, depending on the issue. Regarding Kelly,
Commission officials questioned whether she is sufficiently
independent within DHS and queried whether her independence
can be strengthened and better defined.



4. (SBU) A glaring omission in the discussion of PNR,
remarked English, is the law enforcement perspective (Justice
and Home Affairs - JHA). For the U.S., PNR is a question of
security and we would welcome the JHA point of view.
Commissions officials underscored that they are aware of the
purpose of PNR and see the value of the JHA perspective, but
it no way should this be used to circumvent data protection
issues.

Container Security Initiative
--------------


5. (SBU) English noted that much progress has been made on
reaching an agreement on CSI. He expressed hope that we can
close an agreement with the Commission that would capture the
spirit of the existing "Declarations of Principle" with EU
member states and would allow us to move forward in a
constructive manner. English also said that it was the U.S.
understanding that the infringement proceedings that the
Commission had begun against the member states for the DOPs
would be lifted on signature of the Joint Decision.


6. (SBU) Westerlund responded that the Commission could not
discuss or negotiate the lifting of the infringements. "We
need a legally binding agreement," he added, "That is why the
nature of the decision to be taken by the U.S.-EU Joint
Customs Committee is so important. He noted that Commissioner
Patten had raised this with DHS Deputy Secretary England --
who seemed to confirm that it would be legally binding.
Westerlund suggested that we might need to follow up on this
at the operational level.

EC Enhanced Status at UNHCR Executive Committee
--------------


7. (SBU) Making a strong pitch for the U.S. to support the
EC's request for enhanced status in the UNHCR's EXCOM,
Commission officials argued that the EC is a major
stakeholder in UNHCR in terms of asylum issues and is a major
donor itself. Officials also pointed out that the EC is a
full participant or has enhanced observer status in most
major fora and in UN Committees. Member states have granted
the Deputy High Commissioner a mandate to negotiate for
enhanced status in the UNHCR EXCOM. The Italian Presidency
argued that all Member States are behind the Commission's
request and do not want a confrontation with the U.S. or the
UN on this issue.


8. (SBU) In response, the U.S. delegation said that the
principle of no additionality must be upheld, and that U.S.
policy is not to grant the EU/EC, when it is an observer,
special status equivalent to those of a party.

Bio-Terrorism Act
--------------


9. (SBU) Luc Veron said that the EU shares U.S. concerns and
ideas for improving traceability and security in the food
chain, but continues to have grave concerns about the
obligations imposed under the U.S. Bioterrorism Act of 2002.
Member States have rigorous inspection and safety guidelines
and there should be some recognition of and acceptance of
these standards and practices. The Commission also stated
that application of the obligations on food imports to the
U.S. should not be more onerous that those imposed on
domestic products. The Commission hopes that we can work
together to minimize the effects on trade. Before the U.S.
finalizes the implementing regulation, the Commission hopes
to have further consultations with the U.S. The Italian
Presidency emphasized that the principle of no-duplication
should be respected as much as possible and that the possible
long-term negative effects on trade are clearly understood.


10. (SBU) English said that the FDA has tried to ensure that
it takes into account whenever possible EC comments and
concerns while developing the implementing regulation, the
U.S. delegation commented. The U.S. understands that the
rules should be as least burdensome as possible, with the
least impact on trade and as non-discriminatory as possible
with regards to our trading partners. In a final comment, DG
Trade Official De Laet said for the record, that the law
itself -- not just the proposed implementation rules -- is
restrictive on trade. He urged that we not only take every
opportunity to improve the implementation but that we also
use any flexibility built into the law itself to ensure
minimal effects on trade.

Africa


--------------


11. (SBU) Commission and Presidency officials summarized the
key aspects of the meeting of the EU Troika with Africa
leaders, which took place on July 11 in Maputo, Mozambique.
The key purpose of this meeting was to keep the EU's
political dialog with Africa open, since the Zimbabwe
question precluded the holding of an EU/Africa Summit. In
Maputo, European and African leaders discussed prospects for
an active partnership on security and conflict resolution.
On the latter point, the Commission intends to set up a peace
facilitation structure. This facility will be designed to
assist and finance African peacekeeping operations by
Africans. Also discussed were Africa's external debt burden,
and the WTO trade round, especially on how it addresses
capacity building in developing countries.


12. (SBU) The Commission also briefed on the situation in the
Democratic Republic of the Congo and of High Rep Solana's
visit to the Great Lakes region. They expressed appreciation
for U.S. support for MONUC force expansion and a UNSC Chapter
7 resolution. Regarding the turnover of supplies by the
"Artemis" force to MONUC, they said they are concerned about
the transition to the Bangladeshis, since there will be no
French-speaking contingent in Ituri. Regarding the political
process in the Congo, Solana was encouraged that the impasse
is close to being unblocked. When queried by the U.S. whether
Solana and the EC believe that the warlords will lay down
their arms and participate in the political process, the
Council Secretariat official Jim Cloos replied that the
Congolese are determined to move forward and that there is an
opening for a peaceful solution. The question of arms will
have to be looked at carefully, according to Cloos. The EU is
in favor of some type of arms embargo, but this is a
complicated issue.


13. (SBU) Solana emphasized in his talks in Africa and before
the UN that the EU military mission must be terminated by
September 1. Its sole intent is to bridge the peace and
allow for the start of the political process. Since this is
the first mission outside of Europe, the terms under which it
was agreed to do so must be respected, Secretariat and
Commission officials emphasized.


14. (SBU) Regarding President Bush's recent visit to Africa,
the U.S. side said no decision has yet been made to put "U.S.
boots on the ground" or instead, provide support to ECOWAS.
On HIV/AIDs, Cloos from the Secretariat queried whether the
US pledge of 15 billion is real, since the 2004 draft federal
budget does not have sufficient funds to support this
commitment. U.S. delegates underscored the President's
commitment, noting the Congressional requirement that the US
contribute no more than one third of the contributions to the
Global Fund. The delegation remarked that the President
himself told Commissioner Prodi that he, as the Chief
Executive, will ensure that the full pledge of USD 15 billion
is spent over the next five years, either through the Global
Fund for HIV/AIDs or through bilateral programs.

Bilateral Investment Treaties
--------------


15. (SBU) The U.S. delegation expressed its hope that the
College of European Commissioners will approve the political
understanding negotiated with DG Trade on bilateral
investment treaties. Commission officials said that one
possible "tripping stone" remains - the issue of whether the
Commission would continue to have the authority to impose
restrictions on capital movements. Although the prospect of
the EU resorting to such restrictions is remote, Commission
officials noted, they still might need a flexible approach.

Aviation Agreement
--------------


16. (SBU) U.S. and Commission officials lauded the agreement
that gives the EC the mandate to negotiate a comprehensive
air services agreement with the United States. English
underscored the U.S. interest in an early harvest agreement
that would be followed by further negotiation on more
difficult issues, particularly those that would require
statutory changes. Regarding early harvest, the Commission
said it is ready to listen to U.S. proposals but the EC also
is committed to a full agreement. The latter is the only way
to achieve real economic benefits in aviation. Veron said
the first plenary will be the week of October 1 in Washington
followed by a second session the week of December 8 in
Brussels. He added that Commissioner de Palacio and Secretary


Mineta may meet some time after the second session and before
the end of the year to take stock of progress to date.

Positive Economic Agenda (PEA)
--------------


17. (SBU) Veron noted the good results that have been
achieved: the U.S./EU financial services market dialogue;
Spanish clementines; U.S./EU cooperation on regulatory
reform; the pending mutual recognition agreement on marine
equipment well as exploratory talks on trade of organic
products. He said that he hoped the Commission could go into
more detail with USTR on July 29 on ideas to expand the PEA.
English said the U.S. shared this positive assessment and
hopes that we can strive for solutions on poultry and solving
the remaining questions. All sides agreed that we need to
work together to meet the broader challenges facing
transatlantic and international businesses.

World Summit on the Information Society (WSIS)
-------------- -


18. (SBU) Commission and Presidency officials see the WSIS as
an opportunity for political leaders to express confidence in
using information technology for economic development and
growth and to share EU experience in e-strategies. The
Commission is concerned about the slow progress in the
preparatory stages for the Summit, especially in bridging the
gap between the developed and developing countries on these
issues. The Commission views the September 12th Information
Society Dialogue in Washington as an opportunity to advance
before the third prepcom meeting. The U.S. also expressed
concern about some of the proposals offered by developing
countries on such issues as intellectual property rights.
Task Force participants agreed on the need to work closely
together to find common ground. Regarding the level of
participation, Commission officials said European
Commissioner for Enterprise and Information Society, Erkki
Liikanen will definitely attend; President Prodi also is
likely.

U.S./EU Summit Follow-Up: Hydrogen, Non-Pro
--------------


19. (SBU) U.S. delegates noted that the U.S. will convene in
November. (The IPHE roll out is planned for November 19-21) a
high-level meeting to inaugurate the International
Partnership for the Hydrogen Economy (IPHE) and are pleased
that the Commission will participate. In advance of the
meeting, the U.S. will circulate a draft terms of reference
and welcomes the Commission's comments. Commission officials
said they are reviewing U.S. proposals for the IPHE
partnership, and will pay particular attention to ensuring
that the terms of reference are consistent with EC and member
state guidelines. On another Summit issue, non-proliferation,
the U.S. encouraged a joint plan for areas where the U.S./EU
can work together, including in such areas as export controls
and IAEA.

Trade
--------------


20. (SBU) Laying down a marker on GMOs once again, the U.S.
side reiterated that the U.S. government is committed to
getting access to the European market. Commission officials
replied that a recent regulation adopted by the European
Parliament would increase transparency in the regulatory
system for GMOs and increase consumer confidence. Officials
also pointed out that they have started infringement
proceedings against member states that have not implemented
the GMO deliberate release directive. Echoing the comment
of DG Trade official de Laet on the US Bioterrorism law (para
10 above),English noted that the USG views the
recently-passed laws on traceability and labeling and food
and feed to be fundamentally flawed, regardless of how they
might be implemented. The USG reserves its right to consider
a WTO challenge on the basis of the restrictions the laws
raise to trade, he added. After the recent meeting of
European Parliamentarians and the Congressional Delegation
led by Chairman Henry Hyde, both sides understand better the
perspectives of the other, which should lay a solid
foundation for future talks, Commission officials remarked.

HUMAN RIGHTS
--------------


21. (SBU) The U.S. delegation notified Commission and
Presidency officials that it will sponsor a resolution on


women and political participation and will seek EU support.
The U.S. also hopes the EU will help convince the Africa
Group to stop blocking key resolutions on African nations
such as Zimbabwe.


22. (SBU) Regarding the proposed WEOG rotation for the Human
Rights Commission, the U.S. hopes a solution can be found
that will allow U.S. participation on an appropriate
schedule. The U.S could not consent to the Dutch/Canadian
proposal that would have left the U.S. off the board for two
years.

Justice and Home Affairs
--------------

23. (U) Participants in the JHA task force meeting provided
highlights of their two-day discussion (reported septel).


24. (U) This cable was cleared by EUR/ERA and USEU.
Sembler
NNNN
2003ROME03360 - Classification: UNCLASSIFIED