Identifier
Created
Classification
Origin
06PARIS897
2006-02-13 11:02:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Paris
Cable title:  

FRENCH APPRECIATE USG OVERTURE ON WTO TRADE IN

Tags:  ETRD ECON FR WTRO 
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131102Z Feb 06
UNCLAS SECTION 01 OF 02 PARIS 000897 

SIPDIS

SENSITIVE

STATE ALSO FOR E, EB, EB/TPP, EUR/ERA, AND EUR/WE
COMMERCE FOR ITA
STATE PLEASE PASS USTR
GENEVA FOR USTR

E.O. 12958: N/A
TAGS: ETRD ECON FR WTRO
SUBJECT: FRENCH APPRECIATE USG OVERTURE ON WTO TRADE IN
SERVICES


UNCLAS SECTION 01 OF 02 PARIS 000897

SIPDIS

SENSITIVE

STATE ALSO FOR E, EB, EB/TPP, EUR/ERA, AND EUR/WE
COMMERCE FOR ITA
STATE PLEASE PASS USTR
GENEVA FOR USTR

E.O. 12958: N/A
TAGS: ETRD ECON FR WTRO
SUBJECT: FRENCH APPRECIATE USG OVERTURE ON WTO TRADE IN
SERVICES



1. (SBU) SUMMARY. French services negotiators told USG
negotiators they appreciated the visit by the USG's WTO
services negotiators and told them that France shared the
United States' high-level of ambition. GOF officials told
acting Assistant USTR Christine Bliss February 2 that they
saw considerable convergence with U.S. positions on
services, particularly financial, telecom, distribution,
energy and environment and construction services. They also
expressed some concern that cooperation between the US and
the EU could frighten key markets such as Brazil, India and
the ASEAN countries into not making concessions. The French
also appreciated the Usdel's insights on its discussions
with the European Commission (EC) and indicated interest in
further informal bilateral consultations regarding the EC's
positions on services.


2. (U) Acting USTR for Services Christine Bliss and Director
for Services negotiations Christopher Melly briefed French
officials February 1, accompanied by USEU's Christopher
Wilson and Paris Emboff Adam Shub. The French side was led
by Vincent Guitton, head of the Investment, Services and IP,
his deputy Aymeric Ducrocq, Helene Pelosse, Unit chief for
trade at the Prime minister's office for the coordination of
European Affairs (SGAE),and her staffers Cecile Mahe for
services and Alain Le Dortz for financial services.

EMERGING ECONOMIES ARE U.S. TARGET
--------------

3. (SBU) U.S. officials strongly rebutted the contention of
the European Commission that the U.S. has lost ambition in
the services component of the Doha negotiations. They
explained the high level of U.S. ambition for the services
negotiations and outlined the sectors and markets that the
U.S. saw as vital. These included financial services such as
banking, securities, insurance services, telecom services
(both basic and value-added),distribution, computer,
energy, environmental, construction, engineering as well as
some professional services (such as legal). AUSTR Bliss said
that the U.S. target markets were the 13-14 key emerging
economies such as Brazil, India, China, South Korea, the
ASEAN nations (Thailand, Malaysia) Egypt, South Africa,
Turkey, Argentina and Mexico.



4. (U) On audiovisual services, Guitton told US officials
that France and the EU had only defensive interests and " no
margin of progress" . Bliss told the GOF that U.S.
negotiatiors understood the sensitivity of the issue. She
noted that on telecom services, there were nevertheless some
content coverage issues that needed to be resolved.


5. (U) Guitton told us that France was pleased to hear that
the U.S. interest in services was high. He said France
shared the U.S's high level of ambition for services and saw
considerable "convergences" on both sectors and target
countries. He said France considered financial services,
telecom, distribution, environmental, tourism and
construction services as its core interests. Energy services
were somewhat problematic and express delivery services were
more interesting on the postal side for them than on the
delivery side.


6. (SBU) In the financial services sector, Guitton said
that France sought the removal of the foreign equity caps.
On insurance services, France has offensive interests in the
U.S. market, including elimination of the obligation to
collateralize exposure for reinsurance, and greater
harmonization of state-level insurance regulation (although
Guitton acknowledged that France understands U.S.
limitations on the latter point). Bliss responded that such
matters are not within the scope of the current negotiation
as they concern the right to regulate. On Mode 4 (movement
of people),the Commission has both offensive and defensive
interests, but greater flexibility on unskilled labor will
be a political issue. In terms of key markets, the EC is
looking at the U.S. in addition to the other emerging
markets such as China, India. In India, France wants to
assure predictability and transparency. Bliss stressed that
while U.S. offensive market access interests were generally
focused on advanced developing economies, the U.S. would
also like to see improvements in access to the EU market in
a number of areas including energy, professional,
distribution and value-added telecommunications services.

FRENCH HOPE TO CONTINUE INFORMAL CONTACTS
--------------

7. (SBU) Guitton and his deputy Aymeric Ducrocq agreed that
it would useful to continue to have informal contacts but
worried that the US and the EU working together might
frighten off key developing countries. The two sides
reviewed events at the recent Hong Kong ministerial
regarding services. Ducrocq and Guitton indicated that the
Commission's actions were not always clear to them either.


8. (SBU) The two sides also exchanged views on procedural
and tactical issues surrounding the services negotiations.
Guitton asserted that France and the EC felt that the U.S.
did not adequately support the EC's pre-Hong Kong concept of
numerical targets for measuring progress in the services
negotiations. Bliss responded that the U.S. was convinced
that this concept threatened to "explode" the negotiations
by alienating large numbers of developing country WTO
members. With respect to the post-Hong Kong effort to
produce plurilateral market access requests in specific
sectors, Guitton offered the French view that it would be
important to concentrate this exercise on a relatively
limited number of priority sectors so as not to overload the
process "scare away" developing countries. The U.S.
negotiators broadly agreed with this point, but noted U.S.
expectations that the plurilateral request exercise would
still be the most effective approach.


9. (U) This cable was cleared by USTR.
STAPLETON