ITALY WILL MAKE NO COMMITMENTS TO CHINESE FM LI ON

C O N F I D E N T I A L ROME 000905

SIPDIS


E.O. 12958: DECL: 03/17/2015
TAGS: PHUM PREL CM IT EUN EXPORT CONTROLS
SUBJECT: ITALY WILL MAKE NO COMMITMENTS TO CHINESE FM LI ON
ARMS EMBARGO

REF: A) STATE 44309 B) BUDAPEST 615

Classified By: POLMINCOUNS TOM COUNTRYMAN. REASON: 1.5 (B)(D)


1. (C) Drawing from points ref a, poloff reiterated with EU
CFSP Office Director Luigi Mattiolo continued strong US
concern over the possibility that the EU may lift its arms
embargo against China within the next few months, and the
damaging signal such a development could send to Beijing and
to those outside the EU looking to increase arms sales to
China. Poloff said that the US hoped that FM Fini would use
the opportunity presented by FM Li's March 18 Rome visit to
urge China to improve its internal human rights situation and
do its part to stabilize the security situation in the Taiwan
Strait.


2. (C) Mattiolo said that his government, including FM Fini,
is well aware of USG opposition to the EU lifting its arms
embargo on China He reiterated that Italy is not pushing the
EU to lift, but, contradicting somewhat indications reported
ref b, noted that it was very likely the Embargo would be
lifted prior to the final Council of the Luxembourg
Presidency, given UK and French support for lifting the ban.
Italy shares the view held among all member states that a
decision to lift the ban shoud only be taken in conjunction
with strengthening the "Code of Conduct" in "consultation"
with the US.


3. (C) As to the details of Li's visit, Mattiolo said he had
been asked to contribute input to Fini's briefing material,
and noted that the agenda would be "broad, ranging from
bilateral concerns on human rights to Italy's desire to
improve its trade relationship with China" which would
possibly include contracts on arms not currently restricted
by the embargo. Mattiolo said that ongoing negotiations on
the embargo in Brussels would preclude Fini from making "too
forward leaning" statements to Li about lifting the embargo,
other than to say the issue is under study. Mattiolo
promised to share points ref a with Fini's staff.


4. (C) Separately, Pol Minister-Counselor shared points ref a
with Fini's Deputy Chief of Cabinet Alain Economides, who
promised to review them with the FM prior to his meeting with
Li.


5. (C) Comment. The Italians have in the past interpreted
broadly "the issue is under study" when making statements
under that mantle. During Fini and President Ciampi's visit
to Beijing in December, both made public remarks very
pleasing to the ears of both their hosts and to the Italian
businesspersons, arms manufacturers included, they had in
tow. Recently, possibly in preparation for Li's trip, the
government took a hard line against the Lega Nord party's
push for anti-dumping duties on textiles seen as harmful to
Chinese business interests. We expect, based on previous
experience, that the Italians will take a forward leaning
(pro-lift) line in public while Li and his entourage are in
Rome, again for the benefit of their Chinese guests and
Italian defense industry executives, who will be watching
this visit closely for signals of Italian government
intentions on the embargo. It is just as likely that the
government will then revert to its "neither lead nor
obstruct" position in Brussels after the visit.

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2005ROME00905 - Classification: CONFIDENTIAL