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.

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New Reasons for Hope ...
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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

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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).

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... But not out of the Woods Yet
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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.

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Next Steps with the U.S.
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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.

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Comment
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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
.