PRIME MINISTER AHERN AND GOVERNOR BUSH DISCUSS

C O N F I D E N T I A L SECTION 01 OF 03 DUBLIN 000887

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SIPDIS

E.O. 12958: DECL: 01/31/2015
TAGS: EAIR ECON EIND PREL EI
SUBJECT: PRIME MINISTER AHERN AND GOVERNOR BUSH DISCUSS
BENEFITS OF EDUCATION, R&D, AND OPEN SKIES


Classified By: Ambassador James C. Kenny; Reasons 1.4 (B) and (D).


1. (C) Summary: In a July 21 meeting, Florida Governor Jeb
Bush, Prime Minister Bertie Ahern, and the Ambassador
discussed the importance of education, R&D funding, and
liberal commercial aviation policies in sustaining Ireland's
and Florida's economic successes. Prime Minister Ahern cited
Irish Government plans to invest euro 10 billion over six
years in graduate education and university-affiliated R&D
facilities, in the hope that higher numbers of Ph.D. students
would attract more foreign investment in high-tech sectors.
He lamented, however, that most EU Member States, including
Ireland, had been unable to reach the EU goal of funding R&D
at three percent of national GDP, leaving Europe far behind
the United States in research support. Government Bush
observed that Florida's continued transition from an
agriculture-heavy economy to a high-tech, high-wage center
would, as in Ireland, depend on education, particularly in
math and sciences. He noted that his administration had
committed USD four million to a Florida program to identify
and train high school math and science teachers to make these
fields more rewarding for students. Prime Minister Ahern
said that there were "fantastic opportunities" for Irish
tourism and business with the prospective U.S.-EU aviation
agreement, and he commented that Ireland had been "backward"
in not having already established Open Skies with the United
States. Governor Bush replied that he was a strong advocate
of Open Skies, to the extent of having angered U.S. legacy
carriers in his support for opportunities by foreign carriers
to franchise in the United States. Comment: Prime Minister
Ahern's enthusiasm for Open Skies suggests not only that
Ireland will continue to push the EU Transport Council to
approve the draft U.S.-EU aviation agreement this autumn, but
also that the Irish Government might be willing to consider
bilateral arrangements in the event the U.S.-EU agreement
were not signed. End summary and comment.

Florida and Ireland: Education and R&D
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2. (C) The Irish Government will focus on education and R&D
to build the human capital necessary to sustain the strong
economic growth, low unemployment, and positive fiscal
position achieved in recent decades, Prime Minister Taoiseach
Bertie Ahern said in a July 21 meeting with Florida Governor
Jeb Bush and the Ambassador. Prime Minister Ahern observed
that, with over 90 percent of young people graduating from
the second level (high school),the task was to build up the
third level (universities, now attended by two-thirds of
college-age youth) and fourth-level (graduate/post-graduate)
programs. This year, therefore, the Government had committed
euro five billion over six years to improve the third and
fourth levels, with the goal of producing more Ph.D. students
for eventual employment in cutting-edge technology sectors.
To continue to attract investments akin to the euro two
billion facility opened by U.S. pharmaceutical giant Wyeth in
2005, Irish students would have to be able to compete at the
highest international levels, explained Ahern. (Note: In
recent months, U.S. subsidiaries have told the Embassy about
their difficulties in filling positions requiring
graduate/Ph.D. qualifications, a factor that, they said,
could impinge on future investments in Ireland.)


3. (C) Prime Minister Ahern noted that the Irish Government
had likewise committed euro five billion over six years to
R&D, primarily research facilities at Irish universities as
well as programs to promote collaboration with overseas
institutions, including U.S. Ivy League schools. Ahern
recounted that the Government budget for R&D had been zero
when he assumed office in 1997. Later he helped to establish
Science Foundation Ireland (SFI),a body to administer euro
635 million between 2000 and 2006 to support research in
biotechnology and ICT. The key to SFI's success, said Ahern,
has been the body's requirement that researchers compete for
available funds through international peer assessments, as
opposed to funding arrangements that might favor proposals on
the basis of the researchers' family, political, or regional
connections. Patents and new products have flowed from SFI's
approach, which has drawn talented scientists, including
foreigners and Irish expatriates, to Ireland as a research
hub. Ahern lamented, however, that most EU Member States,
including Ireland, had been unable to reach the EU goal of
funding R&D at three percent of national GDP, leaving Europe
far behind the United States in R&D support.


4. (C) Governor Bush responded that Ireland's economic
success had shown the benefits of strong political
leadership, and he noted that Florida's transition from
dependence on agriculture and tourism to reliance on
high-tech, high-wage industries had paralleled Ireland's
experience. He pointed out that Florida, like Ireland, saw

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education as critical in sustaining the state's economic
evolution. He observed that the number of math, hard
science, and engineering graduates were lagging in Florida
and the United States generally, a trend that spelled trouble
for innovative technology sectors. To address this problem,
Governor Bush's administration had committed USD four million
to a Florida program to identify and train high school math
and science teachers to make these fields more rewarding for
students. He also cited President Bush's success in doubling
research funding through the National Science Foundation and
the National Institutes of Health to USD 28 billion, a level
that still fell short of roughly USD 60 billion in national
demand for research funds. He added, however, that domestic
debate on stem cell research had overshadowed the President's
efforts.

Ireland Wants Open Skies
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5. (C) There are "fantastic opportunities" for Ireland with
the hoped-for signing of the U.S.-EU Open Skies agreement
later this year, noted Ahern. He explained that increased
access to the U.S. market for Irish carriers, as well as the
easing of the Shannon Stop requirement for U.S. carriers,
would boost two-way tourism and business, two additional
pillars of Ireland's continued economic success. He observed
that Ireland had been "backward" in not having already
established Open Skies with the United States, and he cited
Irish overtures to the USG last year on the possibility of
more liberal aviation relations. The Prime Minister pointed
out that one in eight Irish who traveled overseas in 2005
visited the United States, and the Ambassador added that over
100,000 Irish women last year had visited New York alone.
Ahern also cited Ireland's hopes for the re-establishment of
direct service to Florida in an Open Skies context, with Aer
Lingus having ceased Orlando flights last year. Ahern
elaborated that Ireland's poor weather between November and
March would make Florida an ideal vacation spot during that
time of year.


6. (C) In reply, Governor Bush noted his long-standing
strong support for Open Skies, and he claimed to have lobbied
Congress regularly on the issue in the interest of making
Florida even more tourist-friendly. He said that "he could
care less" whether airlines entering Florida were domestic or
foreign-owned, so long as they fulfilled all safety and
security requirements. The Governor believed that U.S.
legacy carriers were disingenuous to press the USG for
increased access overseas while also opposing opportunities
for foreign carriers to franchise in the United States. He
also claimed that he had angered Delta and United Airlines by
making this point to them directly. He remarked that the USG
should be wary of policies that might protect legacy
carriers, noting that "if we had adopted such policies for
Florida, low-cost carriers Southwest and Jet Blue would not
today rank first and second in passenger traffic to the
state." He argued that the USG approach to international
aviation should likewise aim to expose the legacy carriers to
competition, while also promoting new technology to
streamline security screening at U.S. airports. Regarding
the U.S.-EU agreement, he recalled recent conversations with
German transportation officials who advocated the
establishment of uniform standards for foreign ownership in
the trans-Atlantic market.

Comment: Possible Bilateral Options on Open Skies
-------------- --------------


7. (C) Prime Minister Ahern's enthusiasm for Open Skies
suggests not only that Ireland will continue to push the EU
Transport Council to approve the draft U.S.-EU aviation
agreement this autumn, but also that the Irish Government
might be willing to consider bilateral arrangements in the
event the U.S.-EU agreement were not signed. Post
understands that Irish transport officials had alluded to the
possibility of bilateral options on the margins of the
U.S.-EU aviation discussions in May, notwithstanding the
Commission's mandate to negotiate on behalf of Member States.
Per earlier correspondence with EB/TRA, Post will push back
on any Irish inquiries about bilateral options for now, while
encouraging Irish transport officials to support an
affirmative Transport Council decision in October on the
U.S.-EU agreement.

Meeting Participants
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8. (U) Other Irish participants in the meeting were Michael
Collins, Second Secretary General in the Department of the
Taoiseach, Sharon Finegan, Deputy Director for Northern
Ireland in the same department, and Paul Bates, Assistant

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Secretary for Tourism in the Department of Arts, Sport, and

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Tourism. The U.S. side included econoff and Pamela Dana,
Director of the Florida Office of Tourism, Trade, and
Economic Development.


9. (U) Governor Bush did not have an opportunity to clear
this message.
KENNY