WTO/DOHA: DUTCH ATTRIBUTE GENEVA FAILURE TO U.S.

UNCLAS SECTION 01 OF 02 THE HAGUE 001560 SIPDIS SENSITIVE 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 (ALLGEIER/SHARK) E.O. 12958: N/A TAGS: ETRD USTR WTRO ECON EAGR EU NL SUBJECT: WTO/DOHA: DUTCH ATTRIBUTE GENEVA FAILURE TO U.S. UNWILLINGNESS TO LOOK FOR AGREEMENT REF: STATE 109374 THIS MESSAGE IS SENSITIVE BUT UNCLASSIFIED. PLEASE HANDLE ACCORDINGLY. ¶1. (SBU) SUMMARY/COMMENT. In recent statements to the parliament and press, Dutch Foreign Trade Minister van Gennip attributed the failure of recent WTO/Doha talks to USG unwillingness to negotiate an agreement, a signal of Dutch frustration with the current stalemate, according to senior trade officials. The Dutch remain "one of the few" within the EU that continue to push for more ambitious offers. At the same time, they question the depth of proposed cuts to U.S. agricultural subsidies and the ability of USG negotiators to win U.S. Congressional approval of its WTO offer. Dutch senior trade officials are still hopeful for a successful outcome and suggest that the time has come for serious negotiations between the U.S. and EU on what each side seeks in specific improvements and respective "margins for maneuvering." END SUMMARY/COMMENT. -------------- Van Gennip Blames U.S. for WTO/Doha Stalemate -------------- ¶2. (U) In a July 7 letter to the Dutch parliament, Karien van Gennip, Dutch Minister for Foreign Trade, outlined her views on the July 28 - July 1 gathering of high-level trade officials at WTO in Geneva (ref A). Van Gennip described the European Commission's proposals in the ongoing Doha negotiations as constructive, while attributing the current stalemate to a U.S. unwillingness to look for an agreement. In statements to the press, van Gennip said the U.S. offer on agricultural farm subsidies was largely cosmetic, adding that the U.S. proposal would not reduce actual spending and would leave key subsidy programs intact. -------------- EU Willing to "Move," if Others Do -------------- ¶3. (SBU) On July 11, Econoffs followed up with Ministry of Economic Affairs officials Tjerk Opmeer, Senior Trade Policy Advisor, Trade Policy Department, Max Simonis, Policy Advisor, Trade and Investment Policy Department, and Taco Westerhuis, Senior Policy Advisor, North American and Energy Affairs Department, to discuss van Gennip's statements and Dutch views from the Geneva meetings. (NOTE: Opmeer drafted van Gennip's letter to parliament, serves as the main Dutch representative to the EU 133 Trade Committee, and was part of the Dutch delegation in Geneva. END NOTE.) ¶4. (SBU) Opmeer said EU Trade Ministers had met June 29 to discuss the potential for "moving" on an EU WTO offer. As a result, the EU indicated on June 30 that it was flexible on Non-Agricultural Market Access (NAMA) and sensitive product lists, and that it was "willing to go to the G20 offer of 51 percent" on agricultural market access. Opmeer clarified that the "EU was willing to move" on agricultural market access, but that "everyone else had to move a little too." He said the EU had been disappointed by the USG negotiating team's unwillingness to "improve" its agricultural offer and said it was a "pity" that USTR had taken such a rigid stance. -------------- Dutch Question U.S. Agricultural Offer -------------- ¶5. (SBU) Opmeer said the U.S. offer did not include real cuts in agricultural subsidies and was too ambitious in market access. According to GONL calculations, U.S. agricultural support would remain unchanged at $20 billion under the U.S. proposal. He suggested that a reduction closer to $12 billion might "induce the G20 into compliance" in other areas of the negotiations. "Real cuts for real market access" should remain the basis for negotiations. Opmeer said the EU was also concerned that the U.S. $6 billion counter-cyclical payments program would remain "untouched." Meanwhile, U.S. cotton subsidies needed to be THE HAGUE 00001560 002 OF 002 part of a final deal "or there would be no African support nor would we achieve Doha's development objectives," he added. Opmeer noted that the EU intended to change all trade-distorting agricultural subsidy programs to non-trade distorting by 2013. ¶6. (SBU) Simonis shared his concern that USTR's position on agricultural subsidies was unrealistic. Getting Congress to pass reductions and a Trade Promotion Authority extension as elections approached "would be difficult," he added. Even with a 2.5 percent cap, the U.S. could "shift everything from the amber to the blue box." The EU was seeking greater discipline in the use of the blue box, he said. ¶7. (SBU) Econoff countered that our agricultural proposal would require real cuts to U.S. farm subsidy programs, including a reduction to $12.6 billion, according to USG figures. However, he stressed that such an offer was still contingent on receiving ambitious responses from others, something that had not yet occurred. -------------- Dutch Remain Hopeful for Balanced Outcome -------------- ¶8. (SBU) Despite these differences, Opmeer said the Dutch still saw opportunities for a successful outcome and continued progress, including perhaps negotiations on the margins of upcoming G8 meetings in Russia. He proposed that the U.S. and EU "lay their cards on the table" and share the specific improvements they sought and their respective "margins for maneuvering." Van Gennip's recent statements, he argued, did not reflect a change in Dutch policy, as the Dutch continue to be "one of the few in the EU that are pushing for more ambitious proposals and for WTO Director General Pascal Lamy to go forward." However, van Gennip's statements were a signal that the Dutch also have limits. Other EU countries had "reached their limit earlier," he said. BLAKEMAN