EU ARMS EMBARGO UNLIKELY TO BE LIFTED DURING

1. (C) Summary: The EU Arms Embargo against China is
unlikely to be lifted, or even be on the agenda, during the
German EU Presidency that begins in January 2007, according
to contacts at the German and UK Embassies in Beijing.
Although both Italian President Prodi and French President
Chirac publicly called for lifting the EU ban on arms sales
to China during their respective visits to Beijing this fall,
EU contacts feel there is still no consensus among member
states at this time to reopen discussion on the subject. End
summary.

Prodi and Chirac Support Lifting the Embargo


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2. (C) Italian President Romano Prodi said Italy "leans to
lifting" the EU Arms Embargo against China while at a joint
press conference in Beijing with Premier Wen Jiabao during
Prodi's September 13-19 visit. Prodi led a 500-person trade
delegation to several Chinese cities to sign trade deals with
China, Italy's largest source of imports after OPEC members.
Separately, but under similar circumstances, French President
Chirac in a Joint Statement with President Hu Jintao
reiterated his opposition to the EU Arms Embargo during his
October visit to China. During this visit France secured
trade deals with China worth 5 billion Euro. (Comment: At a
post-Chirac briefing to diplomats in Beijing, the French DCM
said Chirac simply voiced well-known French policy as France
has long been in favor of lifting the arms ban, but he
admitted that France is "perhaps lonely in its view." End
comment).

But Not Enough EU Consensus To Act


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3. (C) Despite recent French and Italian public statements
in support of lifting the EU arms embargo, neither country
has taken active steps at the EU to reopen the issue of
lifting the ban, according to contacts at the German and UK.
Embassies in Beijing. There is still no EU consensus about
lifting the ban, according to the UK. contact, and the EU
continues to tell the Chinese that there are "technical
issues" that must be resolved to lay the ground work for a
lift.



4. (C) Separately, our German Embassy contact confirmed that
the arms embargo "is not on the agenda" for the German EU
Presidency which begins in January 2007. Pointing to the EU
Presidency Conclusions of December 2004 which state "the
European Council reaffirmed the political will to continue to
work towards lifting the arms Embargo" and invites "the next
Presidency to finalise the well-advanced work in order to
allow for a decision," he felt there would likely be no
significant movement on the issue in 2007, under either the
German or Portuguese EU Presidency. China has been pressing
Germany for some time on the arms embargo issue and to grant
them EU Market Economy Status, but China has not taken
significant steps to address EU concerns about these issues,
he said. Under the current German Chancellor, it would be
highly unlikely that China will make much headway with
Germany on the embargo issue, he commented. Noting that
France will follow Slovenia in the EU Presidency in 2008, he
speculated that China might find a more opportune moment to
press the issue after the Beijing Olympics in summer 2008.
Randt