OECD REFORM: A/S WAYNE MEETS WITH FRENCH OFFICIALS

UNCLAS SECTION 01 OF 02 PARIS 002623

SIPDIS

SENSITIVE

STATE FOR EB, EUR/ERA, AND EUR/WE

E.O. 12958: N/A
TAGS: ECON FR OECD
SUBJECT: OECD REFORM: A/S WAYNE MEETS WITH FRENCH OFFICIALS

REF: A) State 64265


1. (SBU) A/S Wayne briefed GOF officials on USG ideas for
OECD reform. The GOF agrees with USG ideas about the OECD's
mandate, but our contacts cited questions about the role of
"Full Observers" and how the members of other groups, like
the Bureau of the Council would be chosen. Nevertheless,
they agreed completely on the need for reform and the need
to ensure engagement from member state capital officials.
End Summary.


2. (SBU) On 12 April, EB A/S Tony Wayne called on French
MFA Director for Economic Affairs (U/S-equivalent) Alain
Leroy, his deputy Christophe Chouvet, and OECD Desk Officer
Thierry Mathou to discuss U.S. proposals for OECD reform.
A/S Wayne was accompanied by EUR/ERA's Greg Garramone and
Embassy Paris Econ Chief. Per reftel request, Econ Chief
had passed A/S Wayne's letter and non-paper on OECD reform
to Leroy on 8 April and Leroy and his colleagues had already
reviewed the documents.


3. (SBU) A/S Wayne noted that he had asked for a bilateral
meeting with Leroy specifically to discuss in detail the
thinking behind the proposals in the USG non-paper. He said
he hoped the USG and France could work together to ensure
that the OECD could effectively and efficiently function as
membership increased over time to as many as forty to sixty
members. A/S Wayne added that he knew that all members
would not be happy with all the ideas, but that it was
important to circulate a document which could be the basis
for discussion and which addressed some of the key
challenges. A/S Wayne also emphasized that he hoped to
spark discussion among officials well beyond those at the
OECD in Paris; a "mixed committee" of Paris/OECD-based
officials and officials in member state capitals would be
key to any reform agenda forward. He added that OECD
governance was an area that needed particular attention.


4. (SBU) Leroy welcomed A/S Wayne's initiative to meet
bilaterally to discuss the OECD and agreed that a discussion
involving more officials than just the Paris-based OECD
staff was crucial to moving the issue forward. Leroy also
noted that it was good to have a paper that put "everything
on the table." He said that France was "entirely in
agreement" with the U.S. paper's views on the OECD's
mandate, and in general agreement with the U.S. paper's
views on governance. In this area, however, Leroy read from
the U.S. text: "The role of the European Union would need to
be explored." That, he joked, is "a little grenade" but
very cleverly placed and indeed an issue that will have to
be addressed. He said that he was certain that several EU
countries would not agree with having only the seven largest
budget contributors participate in the Bureau of the
Council, as proposed in the U.S. paper. Sweden and Spain in
particular would oppose that idea Leroy warned.


5. (SBU) Leroy said he wanted to discuss the membership
proposals too. He said that France agrees that today the
OECD Council is overburdened. In today's structure, he
observed, the Executive Committee effectively functions as
the Bureau of the Council would under the U.S. proposal. He
suggested that one could compare the functions on the
Council and the Bureau of the Council to the EU's COREPER I
and COREPER II, in which one forum takes care of the
technical and legalistic decisions, and in effect prepars
for the other body to consider more political and "big-
picture" decisions. Leroy also suggested that the Bureau of
the Council was effectively the same thing as an Office of
the Secretary General should indeed be established to look
after administrative issues.

6. (SBU) A/S Wayne noted that with a larger membership, a
reasonably sized group would have to meet to discuss the
"issues of the day" and make recommendations to the Council.
A large Council comprised of forty or more members would be
simply unmanageable, particularly if the issues brought to
it for decision were numerous.


7. (SBU) Leroy again said that he agreed in principle and
that once per month meetings or something similar might be
the optimum frequency. He said that perhaps one could
consider the G-7 as members on the Bureau, but again noted
that he was unsure of how that would sit with several other
members. Leroy suggested that members should also examine
the role of the Executive Committee. He opined that members
should be careful not to give too much autonomy to the
Executive Committee. He also opined that there "really is
not much in this [the U.S. proposal] for" Full Observers.


8. (SBU) A/S Wayne added that he wondered whether
assembling a group of "wise men" that understood the OECD
but were no longer a part of the organization would be a
good way to get other ideas into the reform process. He
again emphasized that he thought it was imperative that
officials from member state capitals be involved in the
reform discussions. Leroy heartily agreed on the role for
capital-based officials and said assembling a group of "wise
men" was also an excellent idea.


9. (SBU) A/S Wayne also briefed Leroy on USG views on
coordinating the G-8 Broader Middle East and North Africa
(BMENA) initiative with the activities of the OECD's Middle
East and North Africa (MENA) Investment Program. Leroy
understood and noted that France supported the idea.
Continuing on G-8 issues, A/S Wayne also noted that the USG
would be circulating a progress report on Transparency and
Corruption covering Nicaragua, Zambia and Indonesia among
others. Leroy suggested that the G-8 should also reflect on
what can be done to promote evolving improved practices in
Nigeria.

10. (SBU) A/S Wayne also briefed Leroy on U.S. work in
following up on the 2004 U.S.-EU Summit. The USG, he
explained, was assembling a list of attainable goals drawn
from the stakeholder meetings undertaken over the past year.
This list would include possible attainable goals that the
U.S. and the EU could work toward over the next five to ten
years. A priority for the USG list will be practicality and
attainability, he explained. The four fields of possible
cooperation will be 1) Regulatory Cooperation; 2)
Innovation, R&D and Competitiveness; 3) Financial Services;
and 4) Moving People and Goods Securely. Leroy noted he was
impressed with the U.S. diligence in following up in these
areas but made no further comment.

WOLFF