FSC/ETI DISPUTE: DEMARCHE TO GOF ON SUSPENSION OF

UNCLAS PARIS 000389

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ETRD FR USTR
SUBJECT: FSC/ETI DISPUTE: DEMARCHE TO GOF ON SUSPENSION OF
RETALIATORY DUTIES

REF: (A) STATE 11149, (B) WHITE/USEU WILSON E-MAIL, 1/20/05



1. (SBU) Summary. Economic Minister-Counselor made ref A
demarche January 20 to MFA Director Alain Leroy. Leroy took
our points on board, but revealed little about how France
will act when the Commission takes up the issue of FSC
sanctions in the 133 Committee meeting. The GOF remains
particularly sensitive to the allegation that Boeing is one
of the primary beneficiaries of FSC phase-in/grandfathering.
End Summary.


2. (SBU) Economic Minister-Counselor called MFA Director
for Economic and Commercial Affairs Alain Leroy (U/S
equivalent) January 20 to make ref A demarche, emphasizing
in particular the fact that the legislation realized 99
percent of what the EU asked of us, and that EU action could
have a salutory or negative effect on Congressional
attitudes on trade issues with the EU as we move into the
second Bush term. The U.S. intent is to resolve contentious
issues (as indicated by the FSC legislation and the recent
Boeing/Airbus procedural agreement),rather than to see new
irritants created. An EU refusal to recognize
Administration and Congressional efforts to gather support
for difficult trade decisions would be a very negative
signal, particularly to U.S. legislators, many of whom feel
they have made an unpopular political decision in approving
the legislation.


3. (SBU) Leroy took the points on board, and seemed
particularly sensitive to the upcoming visit by President
Bush to Europe (and Chirac eventually to Washington),as
well as the potential implications for Congressional
consideration of Fast Track negotiating authority later this
year. While not indicating how the French would argue on
the issue of sanctions suspension/automaticity, he indicated
that the two-year phase-in and the existence of
grandfathered contracts were serious concerns for France,
particularly given the perception that Boeing is a major
beneficiary.


4. (SBU) Comment. Leroy promised to pass our concerns up
the chain, but the heavy overhang of the Boeing/Airbus issue
likely ensures that the GOF will not help our cause in the
133 Committee. End Comment.
WOLFF