WTO DOHA ROUND : AFTER GENEVA, FRENCH AGRICULTURAL OFFICERS

UNCLAS PARIS 004765 SIPDIS SENSITIVE BRUSSELS PASS USEU FOR AGMINCOUNSELOR STATE FOR OES; EUR/ERA AND EBB ; STATE PASS USTR FOR MURPHY; USDA/OS/JOHANNS/PENN AND TERPSTRA; USDA/FAS FOR OA/YOST/ROBERTS; ITP/SHEIKH/MACKE/TOM POMEROY/MIKE WOOLSEY/GREG YOUNG; FAA/SEBRANEK; EU POSTS PASS TO AGRICULTURE AND ECON GENEVA FOR USTR, ALSO AGRICULTURE E.O. 12958: N/A TAGS: EAGR ETRD EU FR SUBJECT: WTO DOHA ROUND : AFTER GENEVA, FRENCH AGRICULTURAL OFFICERS CAUTIOUSLY OPTIMISTIC SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET ¶1. (SBU) In recent meetings with Agricultural Minister-Counselor, French Ministry of Agriculture officials stressed that they still expect a positive outcome of the Doha round of trade negotiations, despite the recent meeting in Geneva. In fact, they acknowledged that they are now more optimistic than before the meeting. They highlighted positive movement from Brazil but emphasized that they still expect more movement from other G20 countries. Trade Minister Lagarde and staff are not expressing similar optimism. ¶2. (SBU) France believes that a positive outcome could result from Pascal Lamy's active diplomacy. However, French officials fear that Pascal Lamy's triangular (Market Access / Domestic Support / NAMA) approach may be too simplistic as it excludes important issues such as Geographic Indications (GI)and other export support such as food aid. They also pointed out that Lamy does not have a mandate from the WTO to propose a deal in a similar way to the Dunkel proposal of 1993-94. French officials were aware of meetings in Russia prior to the G8 summit but do not expect any definite outcome from them. ¶3. (SBU) French agricultural officials who attended the Geneva meeting felt that Brazil was ready to propose something but that the United States was reluctant to move forward on domestic support. They mentioned that they were aware of the U.S. political agenda with upcoming mid-term elections. They also stressed that the Commission has already reached the limit of its negotiating mandate and that Commissioner Mandelsohn should not -quote- cross the red line -end quote-. French officials reiterated that France would be ready to veto an agreement which does not address NAMA issues. France also has strong support from other EU countries (such as Italy, Germany and Spain) on GI issues. In fact, French officials stated that including GI issues should be a pre-requisite for any agreement. ¶4. (SBU) France is not opposed to (but does notspecifically request) a peace clause but understands U.S. concerns on this issue (they deem the EU to be less vulnerable than the U.S. on domestic support due to decoupling under CAP reform.) French officials agreed that good faith would be needed after an agreement is reached and would support the United States in its demand for a peace clause. ¶5. (SBU) French agricultural officials' comments contrast with a more pessimistic view voiced by Trade Minister Christine Lagarde and advisors in discussions with Ambassador and Economic Minister-Counselor over the past few days. In several private comments on the margins of a weekend economic conference, Lagarde expressed concern over WTO Director General Pascal Lamy's recent assertion of the need to "crack heads together", noting that that large differences that still exist, especially between the industrialized West and the G20, require expert mediation, not head cracking. A Lagarde technical advisor told ECMIN July 10 that France's agriculture "red lines", U.S. reluctance to move sufficiently on domestic agricultural supports, and continued inadequate offers from the G20 on NAMA and services did not auger well for agreement in the short time that remains. ¶6. (SBU) COMMENT. The GOF remains engaged with Brussels on the EU negotiating position. (Lagarde was scheduled to meet in Brussels with EU Trade Commissioner Mandelsohn on July 11.) However, France's tough stance on agriculture remains an important obstacle. We suspect that the upbeat assessment of French agricultural officials may reflect their view that no WTO agreement is just as acceptable politically as a positive WTO outcome. END COMMENT. Stapleton