WTO DEMARCHE: FRENCH MAINTAIN VIEWS ON AG TRADE

UNCLAS SECTION 01 OF 02 PARIS 007598

SIPDIS

SENSITIVE

STATE FOR EB, EUR/WE AND EUR/ERA
GENEVA FOR USTR
STATE FOR USTR
USDA FOR FAS/ITP

E.O. 12958: N/A
TAGS: ETRD EAGR PGOV FR
SUBJECT: WTO DEMARCHE: FRENCH MAINTAIN VIEWS ON AG TRADE

REF: A. STATE 1999861 B. TRADE OFFICERS E-MAIL CHAIN


1. (SBU) SUMMARY: Emboffs delivered ref A points to key
French officials at the Elysee, the Trade Ministry and the
Foreign Ministry, who continue to voice their objections to
the Commission's revised proposal for the WTO Doha Round
negotiations. The French approach seems to have changed very
little over recent weeks. French officials say the
Commission's latest proposals, like the previous ones, go
even further beyond the Commission's agreed-upon negotiating
mandate. France therefore reserves the right to "veto" the
EU position at any point. Dismissing the U.S. proposal,
French officials say France "has sacrificed already", and
cite their 2003 reform of the Common Agricultural Policy as
agreed to by EU member states. END SUMMARY


2. (SBU) Ministers and cabinet advisors alike say publicly
the GOF has lost confidence in EU Trade Commissioner Peter
Mandelson. Agriculture Minister Bussereau, like other
Ministers, continues to speak disparagingly of him and of the
Commission's new proposal. The EU's proposal, says Herve
Lejeune, President Chirac's agriculture advisor, is even
further from the Commission's mandate. For example, he
called the "safeguard" proposals "nothing but hot air."
Lejeune told FAS M/C and Econoff that President Chirac has
therefore reserved the right to "veto" the EU's proposal at
whatever time he deems necessary. A French veto could come
at any time, in the next days, at the Hong Kong Ministerial
in December or even later.


3. (SBU) MinAg's international affairs chief Christian
Ligeard told FAS M/C that France would nevertheless maintain
a high profile in the agriculture negotiations, and hinted at
a more flexible approach if significant advances are made in
other sectors, such as services.


4. (SBU) French officials make clear President Chirac is in
charge on this issue. Chirac advisor Lejeune said he believed
WTO Director-General Pascal Lamy and Trade Commissioner Peter
Mandelson's strategy was "to isolate France". Nevertheless,
the "President of the Republic" was "very calm". (Note:
Pascal Lamy, while French, is an active member of France's
Socialist Party. Chirac only reluctantly supported Lamy's
candidacy as Director-General of the World Trade
Organization.)


KEY FACTORS
--------------


5. (SBU) The key factors for France, according to Lejeune
were:

A) France stands by the "sacrifices" embodied by the 2003 CAP
reform; the current Commission, is disregarding it;

B) Perceived public support for agricultural protectionism is
strong.

C) France is committed to a development round, but is more
interested in helping LDCs like Mali, than emerging export
powerhouses like Brazil.

As did other officials, Lejeune dismissed the recent U.S.
agricultural proposal as containing less than meets the eye,
and referred disparagingly to the US proposal. Regardless of
its merits, Lejeune said, France cannot be persuaded that the
U.S. offers will stand in advance of Congressional debate on
the Farm Bill.

SINGLING OUT BRAZIL
--------------


6. (SBU) Curiously, the Brazilians are also regularly singled
out for opprobrium in private meetings. Despite a yearlong
cultural celebration in France in 2005 known as "the Year of
Brazil", GOF officials regularly deride Brazil's dubious
status as a developing country and criticize Brazil's
aggressive trade negotiating style. Chirac's multilateral
advisor Laurent Vigier posited a "nightmare scenario" for the
U.S. and the EU in which the Brazilians would reap all the
benefits from the Doha Round by pushing through full market
access to the EU and forcing the US to reduce its domestic
supports through more offensive dispute settlement cases at
the WTO.

COMMENT: A WAITING GAME?
--------------


7. (SBU) COMMENT: Over the last weeks, the French have not
changed their tune on agricultural trade. Unlike some of
their EU colleagues, they are not motivated to play the WTO
game and try to match the U.S. or G20 in lowering
agricultural tariffs or subsidies. Given the negative
political impact of the May referendum on the European
constitution, the weakened Chirac/Villepin government likely
sees no political upside to giving up subsidies for a key
export sector and opening it to foreign competition at time
where the economy is generally weak. And traditionally,
French voters have long supported a protectionist approach to
agriculture, for a number of rational and historical reasons.


8. (SBU) COMMENT CONTINUED: On the other hand, most
government officials have hinted at France's strong interest
in pursuing market access for its more competitive service
and industrial goods sectors. As the government lays down a
marker for a possible veto that could protect agriculture, it
will benefit from waiting on the sidelines and seeing which
way the wind blows on the other issues.
STAPLETON

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Stapleton