NETHERLANDS/EU/CHINA ARMS EMBARGO: REDIRECTION

1. (C) On July 15, senior Dutch government interlocutors engaged in a
robust and animated discussion on the China Arms Embargo during a dinne
hosted by Ambassador Sobel for EUR DAS Glyn Davies and EUR/ERA Kathy
Allegrone. The Dutch side pulled out all the familiar arguments
(inevitability of lift, desire for a "strategic dialogue" with China,
China is not what it was 15 years ago, China doesn't belong in same
category as Burma and Zimbabwe, etc.) and some new ones: the EU can't
have a relationship with the Chinese military without lifting the embar
other countries (including the U.S.) are already transferring more
sensitive equipment; Europe's global economic competitiveness is on th
line, etc. The clear sense was that the Dutch side (claiming to speak
the EU) were pulling out all the arguments they could think of to convi
the U.S. side that the train has already left the station.



3. (C) Most of the arguments the Dutch presented can be (and were) easi
countered. A comprehensive approach for shifting the entire context of
the debate onto more favorable ground, however, is clearly needed. Int
briefings, in our view, can only do part of the job; those who want to
convinced (mostly on the military side) already are, while their politi
leaders are obviously making their decisions on other grounds.
Redirecting the EU debate will require sustained, convincingly senior
policy-level engagement with the Dutch, the British, and other key
partners.



4. (C) During the dinner mentioned above, Prime Minister Balkenende's
senior foreign policy advisor provided an opening for engagement by
proposing that the U.S. and EU should look for a "common starting point
to discuss the perceived human rights and regional threat issues relate
to the China debate. From our discussions here with the Dutch, we beli
a convincing case should be based on some combination of the following
points/questions:

- If China of today is really different from the China of 1989, the onu
must be on the EU and China to prove it. Has China acknowledged the
events of 1989 and punished those responsible? Where are the apologies
for the victims? What has China done to ensure that Tiananmen won't
happen again?

- China has made some progress since 1989, but there has also been
backsliding, especially in the last two years. How would lifting the
embargo reverse this negative trend? Can the EU prove it?

- Does offering China what it demands in the hope of reciprocal action
really work? If the EU is serious about bringing about positive change
China, it should hold out the promise of lifting the embargo as a rewar
for measurable and delivered progress. What leverage will the EU have
left once the embargo is lifted?

- Is there a real, enforceable mechanism in place for ensuring that no
additional weapons/dual technology will go to China after lift? If no
such mechanism is in operation and demonstrated to be effective, then a
promises of strengthening the "code of conduct" or other alternative
mechanisms are unsatisfactory and unconvincing.



5. (C) The Dutch and British in particular need to know the USG is
determined at senior levels to prevent lift until circumstances change
significantly. Post experience suggests that regional states such as
Australia or Japan will only play a minimally helpful role in this
effort. (Note: The Australian Ambassador told Ambassador Sobel on Jul
15 that he had received no instructions -- "not a bloody thing" -- to
engage the Dutch on the embargo. End Note.) We would therefore recomm
that Washington consider sending a high-level policy team to the Hague
elsewhere specifically to discuss China (perhaps within the rubric of a
broader EU-US discussion on Asia) at the earliest opportunity. The Dut
still hope to have this issue on the agenda of the September 3-4 Gymnic
which means they will push to have an agreement in place before the end
July (since August is a "down" month for the EU.)



6. (C) At this point, the USG is not trying to influence an EU decision
much as reverse one that many -- if not most -- EU parties believe has
already been made. The Dutch are committed to a successful EU-China
summit as well as improving the EU's relationship with a growing strate
power. We sense that the Dutch are growing irritated at our unwillingn
to "accept the inevitable" and their inability to find a mechanism to
balance our interests with those of the EU and China. If forced to mak
choice, the Dutch and others will have to believe that the negative
fallout from lift to the US-EU relationship will be more than they are
willing to accept. If the Dutch are a good guide to the European
mainstream, it will take a full court press on several fronts to produc
enough "reasonable doubt" within Europe to get past the December Summit
with the embargo still in place.

SOBEL