FRENCH STILL CONSIDERING OSCE BID, BOUCHER TOLD

C O N F I D E N T I A L SECTION 01 OF 03 PARIS 004580

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E.O. 12958: DECL: 07/02/2016
TAGS: PREL IEA OSCE PGOV ENRG ELAB ETTC TRGY ZK IN
PK, CH, RS, CE, FR
SUBJECT: FRENCH STILL CONSIDERING OSCE BID, BOUCHER TOLD


Classified By: Political Minister-Counselor Josiah Rosenblatt, reasons
1.4 (b) and (d).


1. (C) SUMMARY. Concerned officials say they will tell
Kazakh Foreign Minister Tokayev that Kazakhstan will have to
meet higher standards if it wants to Chair the OSCE in 2009.
But, they admit, the personal relationship between the two
Presidents may carry the day. During other meetings in
Paris, Boucher asked for support for U.S. priorities in
Afghanistan and Pakistan, as reflected by the Secretary's
visit. International energy officials said that Turkmenistan
has plenty of gas but not much governance. In any case,
export pipelines to China made more sense that the
trans-Afghan pipeline. END SUMMARY


2. (U) A/S Boucher met with Jean-Francois Terral,
A/S-equivalent for Continental Europe, and Aurelia Bouchez,
DAS-equivalent for Russia and the former Soviet space, to
discuss Central Asia. Terral said the important country in
Central Asia, from France's point of view, is Kazakhstan,
because of its energy resources and because its
democratization efforts are "less bad than the others." The
other "big guy," said Terral, is Uzbekistan. France follows
the EU line on Uzbekistan, but believes it would be unwise to
"corner" Uzbekistan, especially because of the threat of
radical Islamic groups on Uzbek territory. Boucher replied
that President Karimov is dealing with the radical Islamic
threat in the worst possible way. Terral agreed and said he
saw little potential for any positive evolution in Uzbek
behavior.


3. (C) A/S Boucher raised Kazakhstan's bid for the OSCE
Chairmanship in 2009, and noted he had heard France was
considered by the Kazakhs to be supportive. He reviewed the
U.S. position that Kazakhstan was a long way from meeting
OSCE standards, and it appeared unlikely that it would do so
by 2009. Terral said France was not opposed to a Kazakh
chairmanship "in principle," but clearly they had to comply
with OSCE standards. No final GOF decision had been made,
but he believed that France would not support Kazakhstan's
bid. He added, however, that certain French Senators (Senate
President Poncelet and Senator Montesquiou, the latter for
"private reasons") recently gave the Kazakhs the wrong
impression regarding GOF support. Terral noted that
President Chirac had a close relationship with President
Nazarbayev, but nonetheless Terral "could not imagine" that
France would support Kazakhstan's 2009 bid. France, said
Terral, was "very happy" with the U.S. position.


4. (U) Terral said Russia's role was key to Central Asia, and
it was very important to engage Moscow in a strategic
dialogue. Europe, said Terral, was not in a "competitive"
mood regarding Central Asia. Boucher replied that the U.S.
was not "playing the game" either, but it was important for
the development of the Central Asian countries that they have
greater economic and political options than they have had in
the past. Terral said Russia clearly had a common interest
with the West in combating trafficking and Islamic extremism
in Central Asia. Bouchez added that the EU is "almost
invisible" in Central Asia, and needs to expand its
engagement. Boucher said that a visible Europe in Central
Asia is good, and added it would be useful to discuss how the
U.S., the EU and other countries such as Japan could orient
their programs in the region. Programs dealing with good
governance, democracy and civil society would be especially
useful, said Boucher.


5. (U) French MFA Director for Asia, Herve Ladsous, said
that meeting with A/S Boucher in Washington the week before
and hearing his remarks earlier in the day (A/S Boucher gave
an afternoon speech as part of the conference) reinforced his
belief that France and the U.S. share the same objectives in
the region. A/S Boucher offered Ladsous a synopsis of
Secretary Rice's visit to Afghanistan and Pakistan saying

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that she praised Pakistan for what it has done while prodding
it to do more. Ladsous said that the GoF would take the same

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approach with Pakistani FM Kasuri when he visits the
following Tuesday (July 4) adding that he would also discuss
the matter of conventional nonproliferation.


6. (U) Ladsous pointed out that on July 20 China and
Pakistan would celebrate 55 years of official ties between
the two countries. However, he said, he was not convinced
that China would push too hard on behalf of Pakistan with
regards to the civilian nuclear issue.


7. (U) Ladsous said France, with its 200,000 strong Tamil
population, was looking into terrorist financing. He said
that the GoF knows that racketeering is taking place, but it
is a challenge to pinpoint. Nevertheless, he said, with the
UN listing of the Tamil Tigers, France is building up its
legal mechanisms to deal with the problem.


8. (U) In a meeting with the International Energy Agency
that included IEA Deputy Director Ramsay and an assembled
team of regional energy specialists, IEA Manager for South
Asia, Dagmar Graczyk, gave a summary of IEA studies and
activities focused on India's energy sector while
highlighting the challenges in addressing the country's
energy inefficiencies. She explained that India's dialogue
with the IEA began with a Memorandum of Understanding that
was signed in 1998 and that preliminary work focused on
indicators and statistics. As the relationship evolved, the
focus turned to examining specific sectors, such as coal and
electricity. She explained that India's energy sector is
complicated, with five different energy-related ministries
that, until recently, never communicated. In 2003, she said,
the IEA sponsored a conference that allowed the Indian
Ministry of Power and Ministry of Coal to meet for the first
time. Ramsay added that Indian Prime Minister Manmohan Singh
has recently tried to hold regular meetings to allow
ministries to interface, and Ramsay suggested that the U.S.
needs to encourage the practice to continue.


9. (U) The coal market in India, Graczyk explained, was
strangled by labor unions that refuse to allow the government
to open the market. The unions themselves, she said, tended
to blame the railroads for inefficiencies while the
government, currently reliant on the support of Marxists, was
powerless to institute real change. Supplies of coal,
meanwhile, were not provided in the quantity, or quality,
needed.


10. (U) Although the IEA has developed a list of
recommendations which their Indian contacts agree with, they
have stagnated in the implementation phase. On the issue of
transmission losses Graczyk noted that high percentages
attributed to transmission losses may not be entirely
accurate as they include not just transmission losses but
energy theft and uncollected energy bills. She added that
there has been some progress in India's regulatory framework
and they can contribute to the IEA in the relatively new
field of biomass.


11. (U) With regard to the issue of gas in Turkmenistan,
Caspian expert Christof Van Agt said that there is gas in
Turkmenistan, although corporate governance and market
diversity is in short supply. Given the difficulties of
sending Turkmen gas southward, he said, it was more logical
and feasible to send it to China. Russia has been pulling
gas in to control markets to the east. Gazprom has been
willing to pay a higher price for gas because it can sell it
for higher still in the West. Ambassador Ramsay said that he
had hoped that the G8 summit would do more with the gas
issue. It was noted that Ukraine transports 80 percent of
Russian gas and that there are many countries in Europe who
are likely to have more disruptions ahead.


12. (U) In closing, Ukrainian expert Mereydd Evans forecast
difficult days ahead on Eurasian gas, as Ukraine has no
apparent contract for gas imports as of 1 July 2006.


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13. (U) A/S Boucher has cleared the unclassified portions of
this document.




Please visit Paris' Classified Website at:
http://www.state.sgov.gov/p/eur/paris/index.c fm

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