Secretary of Agriculture Mike Johanns meeting with

UNCLAS SECTION 01 OF 02 PARIS 006631

SIPDIS

BRUSSELS PASS USEU FOR AGMINCOUNSELOR
STATE FOR OES; EUR/ERA;
STATE PASS USTR FOR MURPHY, NOVELLI;
USDA/OS/JOHANNS AND PENN;
USDA/FAS FOR OA/TERPSTRA/ROBERTS;
ITP/SHEIKH/HENKE/MACKE/TOM POMEROY/MIKE WOOLSEY;
FAA/SEBRANEK/BLEGGI;
EU POSTS PASS TO AGRICULTURE AND ECON
GENEVA FOR USTR, ALSO AGRICULTURE

SENSITIVE

E.O. 12958: N/A
TAGS: EAGR ETRD PGOV FR WTRO EUN
SUBJECT: Secretary of Agriculture Mike Johanns meeting with
French Ag Minister Dominique Bussereau


1. INTRODUCTION AND SUMMARY: (SBU) After opening
cordialities, Minister Bussereau implicitly referred to the
previous day's meeting between Secretary Johanns, USTR
Portman and their EC counterparts, stating that whatever the
EC negotiates will have to be approved by all 25 Member
States. He stressed that the EU was prepared to make
concessions on market access only if others were willing to
make reciprocal concessions. He said that a Doha agreement
would have to be compatible with CAP reform and that the EU
can't sign on to Doha without agreement on geographical
indications. Secretary Johanns stressed that the model for
Doha should be to encourage trade and open markets via
reducing export subsidies and tariffs, and that the EU
should move toward this model, applying a scientific
approach to issues such as biotech and hormone-fed beef.

Participants on the U.S. side were: Mike Johanns, Secretary
for Agriculture, Craig R. Stapleton, U.S. Ambassador to
France, Dr. J.B.Penn, Undersecretary for Farm and Foreign
Service, Ellen Terpstra, Administrator, Foreign Agricultural
Service, Elizabeth B. Berry, Minister-Counselor for
Agricultural Affairs, Thomas J. White, Minister-Counselor
for Economic Affairs, and Xavier Audran, Agricultural
Economist.

Participants on the French side were: Dominique Bussereau,
Minister for Agriculture and Fisheries, Michel Cadot,
Director of Cabinet, Franois Riegert, Deputy Director of
Cabinet, Jean-Marie Aurand, Director for Economic and
International Policy, Raphael Alomar, Adviser for
International Affairs, and Jonathan Derai, Deputy-Adviser
for Diplomatic affairs


2. (SBU) After pledging French support for U.S. hurricane
victims, Minister Bussereau focused on the WTO negotiations,
stating that although some progress has been made in
agriculture, not much progress has been made on services and
industrial goods. He stated that the EU has already
decoupled domestic support, making its ag policy compatible
with WTO parameters. Further, he asserted that the EU
couldn't undertake additional reforms given that decoupling
is new for its farmers and is less advantageous than the
previous system. Implicitly referring to the previous day's
meeting between Secretary Johanns, USTR Portman and their EC
counterparts, he said that whatever the EC negotiates on
market access, subsidies and domestic support will have to
be approved by all 25 Member States.


3. (SBU) Secretary Johanns expressed the hope that further
progress on the ag pillar could be made before the Hong Kong
summit. He emphasized President Bush's comments about the
need to eliminate trade-distorting subsidies at the G-8
summit and the United Nations. While acknowledging that
reform of the Common Agricultural Policy (CAP) was a step in
the right direction, he underscored the fact that the EU's
level of ag subsidies remains the highest in the world. He
also emphasized the degree to which the EU has benefited
from the U.S.'s relatively low tariffs and open markets, and
that U.S. farmers want reciprocal business opportunities in
Europe. He underscored the need to convince our Congress
that a WTO agreement will result in opportunities for U.S.
farmers in the EU market. He also made a strong argument
that we must address market access and trade-distorting
subsidies to help raise the standard of living in the
developing world.


4. (SBU) Minister Bussereau stated that the EU is already
the largest importer of ag products from developing
countries and referred to the Everything but Arms program.
He said that tariff cuts would benefit the wealthy segments
in the Cairns countries rather than farmers in the
developing world. He added that per capita subsidies in the
U.S. were higher than in Europe, according to OECD data.
With regard to export competition, the Minister said that
France was willing to eliminate export subsidies in exchange
for "parallelism" from others, e.g. U.S. food aid reforms.
He added that the EU was prepared to make concessions on
market access if others were willing to make concessions,
stating that he thought the Uruguay Round framework provided
a better basis than the G-20 proposal for market access
discussions. He said that a Doha agreement would have to be
compatible with CAP reform and that the EU can't sign on to
Doha without agreement on geographical indications.


5. (SBU) Secretary Johanns said that food aid represents a
small fraction of U.S. ag exports and that we should be
doing more in ways that are more efficient, rather than
tying the hands of donors. He also noted that dollarizing
food aid is not a good solution because of corruption.
Regarding domestic support, the Secretary again noted that
CAP reform was a step in the right direction and that if the
model is decoupling that the US should move in that
direction. Moreover, he emphasized, if the model is to
encourage trade and open markets via reducing export
subsidies and tariffs, the EU should move toward the U.S.
model. He added that the EU should harmonize its
regulations on biotech and hormone-fed beef, concluding that
U.S. farmers would like to have the same opportunities in
Europe that EU farmers have in the U.S.


6. (SBU) Minister Bussereau said that progress can only be
made at Doha if everybody makes concessions on all three
legs of the negotiations. He added that the US and the EU
shouldn't disrupt their marketing systems for developing
countries since such changes wouldn't significantly help the
poorer countries. He said that there are several "red
lines" for France such as non-disruption of the CAP. He
added that Europe has made some political choices, e.g.
traceability, protecting the rural environment, and
protecting, preserving and promoting the rural way of life,
which is "the soul of Europe."


7. Secretary Johanns replied that we shouldn't respond to
the Brazil challenge by raising tariff barriers. He said
that the U.S. believes in an open market policy and is ready
to make concessions as we're asking the world to do.


8. (SBU) Minister Bussereau said that a balance was needed
and that the Council of EU Ag Ministers was ready to talk
but that any agreement must be based on reciprocity. He
said that he was satisfied with the US/EU wine accord,
although it was only a first step. He hopes to attain
further progress on EU appellations of origin. On food
safety matters, he asked for more USG flexibility on issues
such as regionalization. He noted that the U.S. meat
industry was working on an agreement with Japan and said
that the EU would like a similar agreement. He expressed
appreciation for the lifting of the U.S. delisting of French
foie gras plants and said that France wanted a solution on
the wine bottle crate issue. He noted the Forestry MOU
signed in July and emphasized that there was a lot of room
for cooperation between the U.S. and France in the forestry
and bioenergy sectors.


9. Secretary Johanns said the U.S. was interested in moving
towards a more regional approach on phytosanitary issues and
that decisions should be made in a science-based manner. He
stressed that a science-based approach should be used in
addressing BSE, biotechnology and the beef hormone issue.
He agreed that the forestry sector afforded many positive
opportunities.


10. Minister Bussereau thanked the Secretary for the useful
exchange of views and invited him to return to France.

STAPLETON