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

UNCLAS SECTION 01 OF 02 THE HAGUE 001560

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USDA/FAS (ROBERTS, YOUNG)
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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.

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Van Gennip Blames U.S. for WTO/Doha Stalemate
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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.

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EU Willing to "Move," if Others Do
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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.

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Dutch Question U.S. Agricultural Offer
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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

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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.

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Dutch Remain Hopeful for Balanced Outcome
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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