DUTCH OFFICIALS OUTLINE TRADE PRIORITIES

UNCLAS THE HAGUE 001433 SIPDIS SIPDIS STATE FOR EB/TPP/BTA, EUR/UBI, EUR/ERA STATE PLEASE PASS TO USTR USDA/FAS (ROBERTS, YOUNG) USEU FOR CWILSON GENEVA FOR USTR E.O. 12958: N/A TAGS: WTRO EAGR ETRD EU NL SUBJECT: DUTCH OFFICIALS OUTLINE TRADE PRIORITIES THIS MESSAGE IS SENSITIVE BUT UNCLASSIFIED. PLEASE TREAT ACCORDINGLY. ¶1. (SBU) SUMMARY: Senior Dutch trade officials recently outlined current Dutch trade priorities: completion of Doha (WTO) talks, energy security, balancing of trade and security needs, and the export of Dutch water management expertise. A February 2007 High Tech Connections mission to San Francisco may include a water-related visit to Sacramento. END SUMMARY. ¶2. (SBU) Emboffs used a June 14 introductory meeting with Roderick van Schreven, new Director General for Foreign Trade at the Ministry of Economic Affairs, to discuss current Dutch trade priorities. Van Schreven assumed his post in May, replacing Dirk Bruinsma. A career diplomat, he will continue to serve as Dutch ambassador to Syria until mid-July. Like his predecessor, van Schreven will be our primary Dutch contact in high-level trade talks. Emboffs met the same week with Richard van Rijssen, currently the Director of Foreign Trade Relations at the MEA but scheduled to take over as DCM at the Dutch Embassy in Washington later this summer. -------------- Doha Negotiations -------------- ¶3. (SBU) Van Schreven listed completion of the Doha Round negotiations within the WTO talks as a top Dutch priority, including agreements on agriculture and services, even if less ambitious than once envisioned. He expressed concern that continued USG demands for EU concessions could harm overall US-EU relations. While there might be room to negotiate on sensitive products lists, he viewed expectations for a revised EU WTO offer as "misguided." The EU, and specifically member state France, believed its current offer had gone "as far as it could go" and had "already been trimmed," especially in the area of direct farm subsidies. Nevertheless, van Schreven noted progress within the various working committees, and underscored Dutch interest in reaching an overall agreement by April 2007 and ahead of the expiration of U.S. Trade Promotion Authority. ¶4. (SBU) Despite strong messages to the contrary from USTR, van Schreven said that many in the EU still believed the US would make further concessions in its WTO offer. He also pointed to difficulties the Bush administration encountered in selling the Central American Free Trade Agreement to Congress, noting that some EU member states questioned whether similar problems would arise with the current U.S. WTO offer. ¶5. (SBU) Van Schreven also noted concerns among EU member states about the potential rise of U.S. protectionism. As the third largest direct foreign investor in the United States, the Dutch had also followed the Dubai Ports deal closely. Many in the Dutch government regard the Committee on Foreign Investments in the United States (CFIUS) as a potential non-trade barrier rather than a security measure, a view he said was shared by several Dutch companies who have complained that CFIUS limits their ability to compete for investments in the U.S. Van Schreven urged the U.S. to carefully review the reach of CFIUS. -------------- Energy Security -------------- ¶6. (SBU) Both van Schreven and van Rijssen identified energy security as another key priority, emphasizing that Russia figures strongly in Dutch energy strategy. Although the Dutch have adequate natural gas reserves and are net exporters, van Schreven said these reserves are expected to last only 20-25 years and new sources need to be developed. Van Rijssen noted the Netherlands thus is seeking to secure investment protection agreements (e.g., national treatment, repatriation) in Russia, Libya, Algeria, Central Asia, and other supplier countries. Given the current focus on energy security, both MEA officials said the ministry planned to name a special energy envoy by September 1 to lead overseas negotiations in this area. ¶7. (SBU) Van Schreven explained that the GONL also sought to position Rotterdam as a liquified natural gas (LNG) transport center. While there are currently no LNG plants in the Netherlands, the Dutch are considering two projects at the port of Rotterdam and one near the Groningen natural gas fields in the north of the country. Under this scheme, the Dutch would provide the EU with strategic reserves, operational supply, transport, and storage capabilities and, thereby, help fulfill a EU priority of diversifying its natural gas supplies. Van Schreven noted that a LNG hub would also meet security objectives as "vessels can be redirected," making them less vulnerable than pipelines. ¶8. (SBU) Under a seperate project, van Schreven said the Dutch company Gasunie, with support from GONL, had recently announced plans to join the Russian Gazprom $6 billion North European Gas Pipeline Project, which will supply gas under the Baltic Sea to Germany by 2010. In return, Gazprom will take a stake in Gasunie' pipeline project to England, which Gasunie is currently building together under the North Sea with the German company Eon. Both this and the LNG project, van Schreven added, would strengthen the Dutch position in natural gas, a sector where the Netherlands holds a comparative advantage. -------------- Trade and Security -------------- ¶9. (SBU) Van Rijssen said the Dutch remain concerned about the economic impact of new security measures, such as travel restrictions and inspections, on the free flow of trade and business travelers. With 60-70% of all global trade crossing the Atlantic, differences in regulatory systems between the EU and U.S., such as that for food security and inspections, imposed a "huge cost" on both sides. He cited the Container Security Initiative as a positive example of how the U.S. and EU can balance security and economic needs. On the related issue of immigration, he said the Dutch are seeking a secure way to attract highly qualified foreign workers, perhaps through a point-based admission system, to fill a need left by the Netherlands' aging workforce. -------------- Water Management -------------- ¶10. (SBU) The Dutch have been actively involved in Katrina reconstruction efforts, especially in the area of water management. According to van Schreven, they are now exploring how to sell their water management expertise to other regions such as California, whose Sacramento valley shares many geographic similarities with the Netherlands. He said California officials have expressed "concern" over the state of their water management, and UC Berkeley and Davis have also indicated interest in bilateral exchange programs. As a follow-on to the 2004 and 2005 High Tech Connections (HTC) trade mission to Silicon Valley and Boston, respectively, van Schreven said the MEA is now planning a February 2007 HTC mission to San Francisco, which may include a water-related visit to Sacramento. -------------- Bio Information -------------- ¶11. (U) Van Schreven - a career diplomat - is an accomplished sailor and mountain climber. He climbed Mount Ararat in 2005 (5,165 m) with a Swiss mountain team, and has sailed across the Atlantic three times and participated in the 1977-78 Whitbread Round the World Race. He speaks English and French fluently and Spanish well. Van Schreven was born in Ottawa in 1954 and is married with a daughter and two sons. ARNALL