IS THE EU RETREATING ON THE CHINA ARMS EMBARGO?

C O N F I D E N T I A L SECTION 01 OF 04 BRUSSELS 001231 SIPDIS DEPT. FOR EUR, EAP/CM, PM, T, S/P E.O. 12958: DECL: 03/23/2015 TAGS: PREL PGOV ETTC CH TW EUN USEU BRUSSELS SUBJECT: IS THE EU RETREATING ON THE CHINA ARMS EMBARGO? REF: A. USEU TODAY 3/23/05 ¶B. USEU TODAY 3/22/05 ¶C. USEU TODAY 3/21/05 ¶D. USEU TODAY 3/18/05 ¶E. LUXEMBOURG 253 ¶F. STATE 49288 ¶G. EMBASSY LONDON DAILY REPORT 3/23/05 ¶H. RECINOS E-MAIL 3/23/05 ¶I. DEAN E-MAIL 3/23/05 ¶J. ROSENBERRY E-MAIL 3/22/05 Classified By: USEU Charge Michael McKinley for reasons 1.5 b/d ¶1. (C) SUMMARY: The EU drive to lift its arms embargo on China appears to be faltering as a result of the March 14 passage of the anti-secession law, increased U.S. pressure, and China's unwillingness to deliver concessions on human rights. Our EU contacts generally confirm press reports that EU governments might be persuaded by these factors -- plus increasing opposition from domestic constituencies -- to postpone their decision beyond the current June deadline. The EU is particularly keen on finding some accommodation with the U.S. before moving forward, and High Rep. Solana plans to travel to Washington in April with a "mandate" to "come to terms with the Americans." While these are positive signs in the wake of the anti-secession law and suggest the EU is finally beginning to understand the depth of our concerns, it is far too early to declare victory. The EU machinery is still geared up for a June lift; reversing that momentum will not be easy. More important, Presidents Chirac and Schroeder appear as committed as ever to lifting, and Solana, whose opinion is especially valued by smaller Member States, continues to argue that the time has come for lifting the embargo. The UK, meanwhile, is sending ambiguous signals and appears satisfied to hide behind the EU flag. END SUMMARY. -------------- New Reasons for Hope ... -------------- ¶2. (C) Stories in major U.S. and European news outlets this week report that the EU's determination to lift its arms embargo on China is wavering in the face of increased U.S. pressure. China's adoption of an "anti-secession" law designed to intimidate Taiwan is cited as another key reason for the EU retreat. Our contacts in Brussels largely confirm these reports and acknowledge that a number of EU governments are having second thoughts about whether or when to lift the embargo. The Irish PSC Ambassador told us March 19 that some delegations have begun to think twice about lifting the arms embargo by the end of the Luxembourg EU Presidency in June (ref. C). Council Deputy DG Peter Feith told a HIRC Staffdel March 22 that he thought the decision "might well" be delayed (ref. A). According to a Council policy advisor working on the embargo, the whole issue is "in flux" and EU governments are "holding their cards close to their chests" for fear of being seen as the problem by China, the U.S., or their own parliaments (ref. B). The bottom line, according to the advisor, is that the EU will find it difficult to proceed without: 1) some accommodation with the U.S., 2) assurances that they can weather the likely reactions of their publics and parliaments, and 3) clear concessions from China on human rights. Until then, "you have us over a barrel," the advisor said. ¶3. (C) The EU has consistently argued that the U.S. simply did not understand either their intent with lifting the embargo or the effectiveness of the regime they intended to adopt in its place (the strengthened Code of Conduct on arms exports and the "Toolbox" of additional controls). However, after Annalisa Giannella's widely-publicized visit to Washington this month (ref. F),the EU has begun to realize that our opposition cannot be explained away with vague assurances about intent or yet more technical briefings about the Code and Toolbox. Recent remarks by President Bush and Secretary Rice, plus tough warnings from senior Congressional SIPDIS leaders, have driven home the message that there will be a serious price to pay for transatlantic relations and defense trade if the EU proceeds with lifting the embargo. For the first time, EU governments appear to be as concerned about the U.S. reaction to a decision to lift the embargo as they are of the Chinese reaction if they do not. ¶4. (C) There are also signs that increased public and parliamentary opposition is having an impact on the calculations of EU Member States. The European Parliament has passed two near-unanimous resolutions since November demanding that the EU not lift the embargo, and leading MEPs from the far left to the far right are increasingly trying to raise public awareness. By our count, all major European editorial boards (including international papers like the Financial Times, Wall Street Journal Europe, International Herald Tribune, and Economist) have come out in opposition to the EU move, and several European think tanks have taken up the issue and given it greater prominence in public debate (the next seminar in Brussels will be on April 6 at the Transatlantic Institute). Prominent NGOs, led by Amnesty International, have held press conferences and organized public commentary, including by prominent Chinese dissidents, and we have even seen press coverage of student protests against lifting the embargo. ¶5. (C) Public efforts such as these appear to have altered the political atmosphere surrounding the embargo and have left some European governments nervous about domestic fallout if they are seen to be overly supportive of lifting the embargo. A British contact told us that the Dutch seem to want to avoid a decision on the embargo at least for the next few months in order not to jeopardize their national referendum on the EU Constitution, scheduled for June. ¶6. (C) Nor has China helped the EU lift the embargo. While China has always insisted there should be no linkage between human rights and the decision to lift the embargo, EU leaders have made it very clear that they expected at least token progress on human rights before they could justify taking a decision. The EU even spelled it out for Beijing by suggesting that ratification of the International Covenant on Civil and Political Rights (ICCPR),release of Tiananmen prisoners, or reform of the Reeducation Through Labor (RTL) system would help facilitate an EU decision. ¶7. (C) So far, China has done virtually nothing to give the EU the fig leaf it needs. Instead, China irritated the EU by passing the anti-secession law and then sending FM Li to Europe to demand quicker progress on lifting the embargo. The anti-secession law, in particular, has given some Europeans pause, leading them to realize that US concerns about regional stability have greater validity than they previously thought. As a result, according to WMD Rep. Giannella's Deputy, the Europeans now need even more progress on human rights from China in order to counter the perception that they are giving Beijing an undeserved reward. According to the Council advisor, High Rep. Solana pressed this point in his March 17 meeting with FM Li, saying that progress on just one of the three human rights issues highlighted by the EU (ICCPR, Tiananmen prisoners, RTL) would no longer be enough; China now needed to make progress on all three (ref. D). -------------- ... But not out of the Woods Yet -------------- ¶8. (C) The December European Council declaration that the EU was working toward lifting the arms embargo by the end of the Luxembourg EU Presidency in June remains the only current, "official" EU position. While the declaration was drafted vaguely enough to allow some wiggle room (EU leaders "invited the next Presidency to finalize the well-advanced work in order to allow for a decision"),the EU has seen it as a deadline and the Chinese as a promise. Some EU officials believe backing down risks Chinese diplomatic and perhaps commercial consequences, and also see it as a blow to the EU's credibility as a global player capable of making autonomous decisions on important international issues. President Chirac, Chancellor Schroeder, and High Rep. Solana all remarked to the press March 23 (on the margins of a European Council meeting) that the EU should maintain its political will to lift the embargo as soon as possible. We should expect intense lobbying from these and other European leaders, and from the Chinese, over the coming weeks. ¶9. (C) Nor are we comfortable with where the UK is on lifting the arms embargo. While some press reports are characterizing the UK as unlikey to support a lift during its EU presidency in the second half of the year (we have heard reports that the local UK PSC ambassador has made similar statements),we see other indications that give us pause. The UK is sending ambiguous signals that suggest a preference for hiding behind the EU flag. Asked on March 22 about the UK's position on lifting the embargo, PM Blair's Official Spokesman responded that it was an EU-led issue and the UK wanted EU consensus. However, he added that the UK still believed that a strengthened Code of Conduct could meet U.S. concerns (ref. G). While FM Straw acknowledged to the press March 20 that the anti-secession law had created a "difficult political environment" around the embargo, Deputy PM John Prescott then told the press March 23 that he thought "the good sense in Europe will be that they will come to some agreement on this matter and lift the embargo." Comments such as these indicate that we should not count on the UK to help us with this issue, even if it lands in their Presidency. (We defer to Embassy London for a more authoritative assessment.) ¶10. (C) Moreover, the EU's bureaucratic machinery has been gearing up for a spring lift. Work on the Code of Conduct and Toolbox has been all but completed by national experts in the COARM group. These measures could be adopted as soon as the Luxembourg Presidency decides to put them on the agenda of the Political and Security Committee (PSC). The calendar also offers plenty of opportunities for France, Germany and others to push for continued progress. There will be four more meetings of EU Foreign Ministers before the end of June, including an informal "Gymnich" gathering on April 15 (the GAERCs will be April 25, May 23 and June 13). Heads of Government will meet June 16-17, and will almost certainly discuss China regardless of their expectations at that point on the embargo. The EU will also have a troika ministerial with China on May 8 to celebrate 30 years of official relations. At any of these meetings the dynamic could turn very quickly and a June decision could again look imminent. Our first test will be on April 5 when the PSC convenes to discuss the arms embargo and to examine options for further engagement with the U.S. -------------- Next Steps with the U.S. -------------- ¶11. (C) High Rep. Solana plans to visit the Washington in April to follow-up on the Giannella visit. According to Council Deputy DG Feith, Solana will be traveling with a &mandate" from Member States to "come to terms with the Americans" (ref. A). There is a desire within the EU, Feith added, to reach agreement with the U.S. on weapons and technology that should not be transferred to China. According to the Council advisor, the EU still hopes to overcome at least our biggest concerns through some combination of strategic talks on China and consultations about weapons and technology. They recognize that we will not support lifting the embargo no matter what they do, but they hope to at least reduce the risk of serious damage to transatlantic relations and defense trade. "You've got us over a barrel on this, and we can't really move forward until we see what happens with the strategic dialogue and weapons consultations," he said. -------------- Comment -------------- ¶12. (C) The technical discussions on April 5 will be important, but far more critical will be the Solana visit later in the month. In our view, Solana is part of the problem. He jumped on board the pro-lift train early, and his views have been important in influencing smaller member states. He does not take our regional stability concerns seriously, nor give prominence to China's persisting human rights problems. He was quoted yesterday saying it was "unfair to maintain sanctions on China so many years after the reason" it was imposed. We should use Solana's visit to "re-educate" him on our concerns, challenge him on many of his assumptions, and then to discuss in detail the nature of a strategic dialogue that will allow us to look at China in the broader regional and global perspective. If we can lock the EU into a process, Mission believes they will be more likely to delay any final decisions that run counter to our interests. We can then use the time gained to keep ratcheting up the pressure, especially by exploiting the gap that currently exists between European leaders and their publics on this issue. McKinley .