EU CHINA ARMS EMBARGO: VADM METZGER/DAS SUCHAN

C O N F I D E N T I A L SECTION 01 OF 02 THE HAGUE 002462 SIPDIS E.O. 12958: DECL: 09/26/2014 TAGS: PREL PARM MARR CH NL EUN SUBJECT: EU CHINA ARMS EMBARGO: VADM METZGER/DAS SUCHAN MEETING WITH GONL REF: A. THE HAGUE 1846 (NOTAL) ¶B. THE HAGUE 2074 (NOTAL) Classified By: CLASSIFIED BY DEPUTY CHIEF OF MISSION DANIEL RUSSEL FOR REASONS 1.4 (B AND D) ¶1. (C) Summary: On September 15, VADM James Metzger and PM/DAS Greg Suchan briefed a Dutch interagency team chaired by MFA Security Policy Director Maurits Jochems on U.S. concerns regarding the possible lifting of the EU's arms embargo on China. VADM Metzger outlined the enhanced threat posed by possible increased EU technology transfers to China, while DAS Suchan explained why proposed changes to the EU's Code of Conduct on arms transfers were unsatisfactory, noting that U.S. concerns in this area were broad and bipartisan. In a shift from earlier stated positions, MFA Political Affairs Chief Jaap Werner said that relations with the U.S. and Japan would be a key consideration in reaching an EU decision; the Dutch side argued forcefully, however, that an enhanced Code of Conduct and a "Toolbox" for post-embargo countries should address U.S. concerns. The Dutch side repeatedly noted that while the Dutch were not pushing to lift the embargo themselves, as EU president they would be compelled to deal with the issue in accordance with the wishes of the EU membership. End Summary. ¶2. (C) ACJCS VADM James Metzger and PM/DAS Greg Suchan briefed a Dutch interagency team on September 15 in The Hague on U.S. concerns related to a possible lifting of the EU China arms embargo. Dutch MFA Security Policy Chief Maurits Jochems hosted the meeting, accompanied by other policy level colleagues from the MFA Political Affairs and East Asian Affairs Departments and Ministry of Economic Affairs, as well as representatives from MOD arms transfer office and Dutch Military Intelligence Department. VADM Metzger opened the meeting by stating that the symbolism of a decision to lift the embargo at a time when China was behaving in a threatening manner vis-a-vis Taiwan would clearly send the wrong signal to China and would be counter-productive to resolving cross strait differences. He noted that U.S. concerns go beyond countering immediate military threats to include long-term worries about Chinese proliferation to third countries. He also said that the U.S. is concerned about transfers of seemingly non-lethal systems such as night vision devices which could significantly enhance Chinese capabilities. ¶3. (C) Jochems observed that the Dutch were not responsible for raising the issue of a possible embargo lift within the EU, but had inherited it from previous presidencies. Repeating his comments from a previous meeting with U.S. interlocutors (ref A),Jochems said that he was struck by the progress the Chinese had already made despite the embargo, which raised the question of how effective the embargo really was. MFA Political Affairs Office Director Jaap Werner (MFA's agenda manager for the Dutch EU Presidency) said the EU was looking to play a part in China's impressive economic growth. He saw four elements as being key in determining how the EU should proceed: the effectiveness of the embargo as such, human rights concerns, regional stability considerations and the impact of an embargo lift on relations with allies such as the U.S. and Japan. He stressed that VADM Metzger and DAS Suchan's visit was a good opportunity to explore U.S. feelings on this issue. MFA East Asian Affairs Deputy Director Margriet Bot said the EU felt compelled to respond positively to a request from the Chinese, who objected (fairly, she thought) to being lumped in the same category as Zimbabwe and Sudan. ¶4. (C) VADM Metzger presented a U.S. Pacific Command Briefing on the possible impact of specific EU technologies on regional stability. Jochems noted that European and U.S. industrial high-tech cooperation with China was a legitimate cause for concern, and acknowledged that the Dutch parliament opposed lifting the embargo on both human rights and regional stability grounds. He suggested, however, that an enhanced EU Code of Conduct on arms transfers in place of the embargo would restrain EU states from increasing sales to China. DAS Suchan countered that it was intuitively obvious that lifting the embargo implied an increase in transfers would follow. MFA arms transfers Office Director Paul van den IJssel argued forcefully that an enhanced Code of Conduct and a "Toolbox" for post-embargo countries such as China would result in increased scrutiny of transfers to China. DAS Suchan noted U.S. support for the Code of Conduct in general, stating it was a useful instrument in judging arms transfers to nations such as Brazil, but stressed that China was a special case. Suchan added that those EU Members that apply the Code (but not the Embargo) to their defense exports to the PRC approve seventeen licenses for every one that they deny. In the U.S. view, "the universe of acceptable arms transfers to China is a null set." Bot said the EU hoped to gain some concessions from the Chinese on human rights grounds in exchange for an embargo lift. Werner asked how an EU lifting of the embargo would be received in Washington. DAS Suchan said that on political level it would be greeted with "immense disappointment," noting that the issue was a bipartisan matter of concern in both the executive and legislative branches of the U.S. government. Suchan also noted that if the EU lifts the Embargo, it will raise significant obstacles to U.S. defense cooperation with Europe, and the U.S. congress would likely legislate additional impediments to defense trade. ¶5. (C) Comment: MFA Political Affairs Office Director Werner's inclusion of U.S. and Japanese interests in his criteria for Dutch consideration of this issue is significant and positive shift away from earlier suggestions (from Werner and others) that the EU had already decided to lift the embargo and was concerned only with how to manage the U.S. reaction. With the possible exception of MFA's East Asia Department, it appeared that most Dutch interlocutors would be happy to have the issue off their plate for the rest of their EU Presidency (see also ref B). Nevertheless, the Dutch continue to argue that an enhanced Code of Conduct and a "Toolbox" for post-embargo countries will address U.S. concerns, and it is clear that the Netherlands is not prepared to "go it alone" if other states make a forceful move -- without significant opposition -- to lift the embargo. End Comment. ¶6. (U) DAS Suchan has cleared this message. SOBEL