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Identifier
Created
Classification
Origin
06LISBON1280
2006-06-28 15:03:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Lisbon
Cable title:  

PORTUGUESE RESPONSE TO WTO DOHA ROUND DEMARCHE

Tags:   WTRO  ETRD  ECON  FO  PO 
pdf how-to read a cable
VZCZCXRO3410
PP RUEHAG RUEHAP RUEHDE RUEHDF RUEHGI RUEHHM RUEHLZ RUEHMR RUEHPA
RUEHPB
DE RUEHLI #1280 1791503
ZNR UUUUU ZZH
P 281503Z JUN 06
FM AMEMBASSY LISBON
TO RUEHC/SECSTATE WASHDC PRIORITY 4927
INFO RUCNWTO/WORLD TRADE ORGANIZATION COLLECTIVE PRIORITY
RUEHGV/USMISSION GENEVA PRIORITY 0532
RUEHBS/USEU BRUSSELS PRIORITY
						UNCLAS LISBON 001280 

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: WTRO ETRD ECON FO PO
SUBJECT: PORTUGUESE RESPONSE TO WTO DOHA ROUND DEMARCHE

REF: SECSTATE 104561



1. (U) Summary: On June 26, Pol/Econ DepCouns delivered
reftel demarche to MFA EU External Relations Division Head
Cristina Vasconcellos and Ministry of Economy Acting DG for
Enterprise Alice Rodrigues. Each reiterated well-known EU
positions, with Vasconcellos underscoring the need for
simultaneous agreements in agriculture, NAMA and services and
Rodrigues urging greater cuts in US domestic supports in
return for EU concessions on tariffs. Both Vasconcellos and
Rodrigues were very aware of the July 2007 expiration of the
Trade Promotion Authority and how difficult it would be to
amend US law to accommodate a DDA agreement after 2006. End
Summary.



2. (U) MFA EU External Relations Division Head Cristina
Vasconcellos disagreed with the US focus on the EU to grant
agricultural concessions first and commented that instead the
US needed to focus its attention on pressuring the G20 to
make concessions on NAMA and services. She underscored that
the US and the EU had similar positions in these two areas
and that the EU would only be able to make agricultural
concessions if agreements in all three areas were concluded
at the same time.



3. (U) Ministry of Economy Acting DG for Enterprise Alice
Rodrigues inquired if the US was open to greater cuts in
domestic agricultural subsidies, underscoring that greater
subsidy cuts would be necessary for the EU to grant larger
cuts in agricultural tariffs. DepCouns responded that the US
offer was not a "take it or leave it" offer and that the US
was open to further negotiations if the EU offered a
counterproposal to warrant further movement, which it had not
yet done. Neither DepCouns nor Rodrigues could provide
specifics on US or EU latitude, with Rodrigues commenting
that politics would now determine the way forward.



4. (U) In a separate June 26 article in the Economic Daily,
Ministry of Economy Director General for Enterprise Helder
Oliveira noted that although the US-EU agricultural debate
underway did not directly affect Portuguese agriculture,
France,s intransigence could benefit Portugal by extracting
greater concessions for NAMA and services, two areas of high
importance to the Portuguese economy. He reiterated the need
for simultaneous agreement in all three areas - agriculture,
NAMA and services, noting that if the EU ceded its
agricultural dossier without the guarantee of equal measures
in NAMA and services, the EU would lose all its leverage. In
contrast to Vasconcellos and Rodrigues,s acute awareness of
the Trade Promotion Authority,s expiration in July 2007 and
the wall the US would hit if negotiations were not concluded
by the end of 2006, Oliveira underscored that the DDA should
not be subject to time pressure. "Although elections in
October in Brazil, in November in the U.S. and in France in
2007 make the negotiation scenario more difficult," Oliveira
is quoted as saying, "a good deal of judgment is required not
to let the calendar dictate our agreement."



5. (SBU) Comment: Vasconcellos and Rodrigues were very
attentive during our discussions and promised to consider
reftel points in formulating Portugal,s position for the
June 29 Council of Minister,s meeting in Geneva. They
clearly appreciated the weight the June 23 Senate letter to
President Bush calling for "a good result for U.S.
agriculture" carried. However, they noted that the EU faced
similar political pressures in dealing with the 25 member
states. In contrast to Oliveira,s hard line expressed in
the June 26 press article, both Vasconcellos and Rodrigues
appeared eager to find a way to move the negotiations forward
although it is unlikely that Portugal will stick its neck out
on any particular issue. Rodrigues will accompany Ministry
of Economy State Secretary for Trade, Services and Consumer
Defense Fernando Serrasqueiro to the June 29 meeting. MFA
State Secretary for European Affairs Fernando Neves will also
be attending.
Hoffman