NETHERLANDS/WTO: WE MUST SALVAGE WHAT WE CAN

UNCLAS SECTION 01 OF 02 THE HAGUE 001723

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: NETHERLANDS/WTO: WE MUST SALVAGE WHAT WE CAN

Ref A) The Hague 1560, B) The Hague 1433


1. (SBU) Summary. Dutch Trade Minister van Gennip publicly
blames the U.S. for the suspension of the Doha negotiations,
but contacts at the ministries of Economic and Foreign
Affairs stressed the need to avoid the blame game and
restart talks. The Dutch see an agreement as critical to
their international trade interests and seek specific
information on USG expectations of the EU and the cuts in
USG agricultural subsidies. End Summary.

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Dutch Still Committed to Doha
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2. (U) In a July 26 public reaction to the suspension of
trade talks, Foreign Trade Minister Karien van Gennip
stressed her continued commitment to achieving a successful
agreement. Highlighting the interests of Dutch exporters,
consumers, and businesses, van Gennip called for a restart
of the Doha process and announced her willingness to "fight"
to keep the Doha Development Round alive. With the
Netherlands "at the heart of world trade," failure to reach
agreement could cost the country one percent of GDP -- about
500 billion euros ($640 billion). Given the export-oriented
nature of its economy and the agriculture sector
specifically, she said the Dutch clearly would benefit from
more open borders. The French were also very aware of the
cost of failure, she added.


3. (U) While concerned that "poor countries have a far
weaker position in bilateral talks," van Gennip did not rule
out the possibility of new bilateral or regional agreements
in accordance with WTO rules. She said the EU would not
demand more from its trading partners under such agreements
than it would have secured through a multilateral accord
within the WTO.

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Publicly -- U.S. to Blame for Failure
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4. (U) Van Gennip went on to blame the failed talks on U.S.
"unwillingness to look for agreement," a view voiced earlier
in her July 7 letter to parliament (ref A). Recalling a May
2006 visit to the U.S., she said her American counterparts
believed "they had done their part," and this attitude
remained unchanged even after July G8 meetings in Russia.
While WTO negotiators had engaged in 'what if' talks in
Geneva, the U.S. had refused to participate, she said.
President Bush "says one thing," she added, but "something
else emerges at the negotiating table."


5. (U) Van Gennip argued the U.S. does not believe the WTO
produces sufficient results and instead favors bilateral
agreements, in which it can wield greater power. The U.S.
Congress opposes changes to the current U.S. agricultural
policy, she added, including the Farm Bill with subsidies
worth billions to U.S. farmers.

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Privately -- Time to Move On and Avoid Finger Pointing
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6. (U) AgCounselor and Econoffs met July 31 to discuss van
Gennip's statement and the recent suspension of Doha talks
with Ministry of Economic Affairs (MEA) officials Tjerk
Opmeer, Senior Trade Policy Advisor and main Dutch
representative to the EU 133 Trade Committee, and Maaike
Hoffman, Senior Policy Advisor, as well as Ministry of
Foreign Affairs officials Pauline Diepenbroek, Senior Policy
Officer, and Niels van der Bijl, Policy Officer.


7. (SBU) Econoff stressed USG continued commitment to Doha
and USTR Schwab's ongoing outreach to identify prospects for
renewed talks. Opmeer said the Dutch also sought ways to
restart negotiations. He argued there was still "enough
there for something ambitious," and "too much work" had been
done to fail now. Despite van Gennip's statements to the
contrary, Opmeer stressed that both sides should "avoid the
blame game."


8. (SBU) Opmeer said that EC Trade Commissioner Peter
Mandelson would be conducting his own outreach. In early

THE HAGUE 00001723 002 OF 002


September, EU members would discuss possibilities for a Doha
revival within the 133 Committee. Opmeer said he would be
drafting another letter from van Gennip to the Dutch
parliament expressing GONL disappointment with the Doha
talks and its desire to restart negotiations "as soon as
possible." In an earlier meeting, senior MEA officials had
indicated that the Dutch would pursue bilateral agreements
if the current talks failed (ref B).


9. (SBU) The Dutch saw moving forward on "elements where we
can agree" as another avenue to restart negotiations, Opmeer
added. He said the Dutch do not believe that such an
approach would undermine attainment of a complete Doha
package, as WTO Director Pascal Lamy has asserted.

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Dutch Seek Specifics on U.S. Expectations
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10. (SBU) On agriculture market access, Opmeer said the EU
saw adjustments in its proposals from 39 percent to 48
percent and then to 51 percent as significant compromises.
Given internal EU politics, he said "getting to 66 percent
would not be possible" and asked specifically for USG
expectations. Opmeer added that the EU proposal included
real cuts, as EU tariffs don't have any "water" in them
(i.e., applied tariffs close or at the level of bound
tariffs).


11. (SBU) On agriculture subsidies, Opmeer questioned
whether USG domestic support cuts would involve real program
cuts, a question also raised in earlier meetings (ref A).
The EU provided $22.7 billion in general agricultural
support in 2005, he said. This figure would drop to 9
percent of current levels by 2013, he explained, almost
eliminating amber box support and leaving only green box
subsidies. AgCounselor and Econoff countered that under the
U.S. proposal, U.S. support payments would drop considerably
and would involve real cuts to programs.


12. (SBU) AgCounselor stressed that more support from the EU
would also help encourage other countries to improve their
market access proposals and to promote a meaningful Doha
outcome. Within the EU, it is the Dutch and Nordic countries
that continue to press for an EU proposal that offers "real
access," Opmeer noted.

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Comment: Helping the Dutch Help the US
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13. (SBU) The Netherlands is the world's third largest
exporter of agricultural goods -- $64 billion in 2004. The
Dutch therefore have a genuine interest in restarting the
Doha round negotiations, reaching an agreement on
agricultural goods (market access and domestic support) and
further opening international trade markets.


14. (SBU) These Dutch officials agreed that further
information exchanges would benefit both sides. Sharing
additional details with the Dutch on expected cuts in the
USG agricultural subsidy proposal, products of interest, and
USG expectations for the EU proposal would help the Dutch
work from within the EU to restart talks and seek an EU
offer with "real access."