TOUR D'HORIZON OF PORTUGAL'S EU PRESIDENCY AGENDA

C O N F I D E N T I A L SECTION 01 OF 03 LISBON 001841

SIPDIS

SIPDIS

E.O. 12958: DECL: 07/13/2017
TAGS: PREL PGOV ETRD EUN PO
SUBJECT: TOUR D'HORIZON OF PORTUGAL'S EU PRESIDENCY AGENDA

REF: A. A. LISBON 57

B. B. LISBON 1148

Classified By: LCLIFTON



1. (C) SUMMARY. In recent meetings with EUR/ERA director Bill
Lucas, Portuguese officials shared their latest thinking on
Lisbon's agenda for its EU presidency (July ) December
2007). Lisbon has a number of challenges on its plate:
securing final approval of an EU reform treaty; holding an
EU-Africa summit while not exacerbating internal EU tensions
over the question of Robert Mugabe's participation; and
achieving an expeditious implementation of the Ahtisaari
proposal on Kosovo. It will be a demanding presidency, and
it is not yet clear whether Portugal will have the heft to
drive EU action on some of the key issues in a direction
consistent with U.S. interests. END SUMMARY.


2. (SBU) EUR/ERA Director Bill Lucas met in Lisbon on June 28
with the directors of the MFA's regional offices and the next
day met separately with the Prime Minister's senior
diplomatic advisor, MFA Director for European Institutions
Mario Miranda Duarte, MFA Director for the Americas Helena
Coutinho, and senior Ministry of Economy policymakers. Lucas
was accompanied by EUR/ERA econ deputy Eric Luftman, Portugal
desk officer Kevin Opstrup, and Embassy officials.

U.S. Priorities
--------------


3. (SBU) With all his interlocutors, Lucas underscored U.S.
interest in building on strong US-EU cooperation during the
preceding German presidency and highlighted USG priorities in
the economic, political, and Justice and Home Affairs
spheres. On economic issues, Lucas identified the top three
objectives as progress on Doha, concrete deliverables * such
as agreement on accounting standards * for signing at the
first ministerial meeting of the Transatlantic Economic
Council (TEC) this November, and a high-level dialogue on
energy and climate change. On the political front, he
stressed support on Afghanistan and Iraq reconstruction, on
dealing with a newly assertive Russia -- including on missile
defense and Kosovo -- EU-NATO collaboration on ESDP, Iran,
the Middle East, and Darfur. He noted that now that the
Passenger Name Record agreement is practically done, we must
continue our effort to reach agreement on principles for
sharing sensitive data for law enforcement and
counterterrorism purposes. Lucas also urged Portuguese help
toward member- state ratification of the implementing
instruments for the U.S.-EU Extradition and Mutual Legal
Assistance Treaty.

EU Reform Treaty
--------------


4. (C) Mario Miranda Duarte, the MFA's Director for EU
Institutions, said the mandate for the way forward on the
reform treaty that emerged from the June European Council had
been very clear, and he outlined an ambitious timeline for
finalizing the text. The Portuguese plan to circulate a
draft text at the next General Affairs and External Relations
Committee (GAERC) meeting July 23-24, to allow parties time
to review it during August vacations. Miranda Duarte added
that Portugal's ultimate goal is to have leaders endorse a
final text at their informal European Council meeting October
18-19. According to Miranda Duarte, the Portuguese will add
a clause on energy security, a Polish initiative endorsed by
the German presidency.


5. (C) Ministry of Economy (MoE) Deputy Director General (DG)
for Economic Activity Nuno Lucio noted Sarkozy's insistence
on removal of any reference to "free and undistorted
competition" from the revised EU treaty preamble. Lucio's
supervisor, DG for Economic Activity Mario Lobo, commented
that the French President "likes to shake things up" by
saying that competition is a means to an end, not an end in
itself. Lobo further remarked that Sarkozy's removal of the
"free and undistorted competition" wording was "a powerful
message received by all of the EU member states."

AFRICA
--------------


6. (C) The MFA's Miranda Duarte said the Portuguese
presidency is in the process of developing a joint strategy
with Africa ) covering commerce, good governance, health
issues, and defense/security ) in anticipation of the
EU-Africa summit Portugal hopes to host in December.


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7. (C) Nuno de Mello Bello, the MFA's Director for Africa,
declined to speculate on Zimbabwean President Mugabe's
possible participation or on how this might affect other
leaders' attendance, stating that those decisions would be
made above his level. (Comment: Mello Bello has told us in
previous conversations that Portugal plans to invite European
leaders and the AU would invite African leaders. Although
the Portuguese share our views about Mugabe, they are willing
to allow him to travel to Lisbon, if that is the price for
ensuring the summit occurs. End comment.)

BRAZIL
--------------


8. (C) Miranda Duarte noted that the idea for the EU-Brazil
Summit came about in part to address the fact that Brazil was
the only BRIC country (Brazil, Russia, India, China) with
which the EU did not have a sustained, institutionalized high
level dialogue. Helena Coutinho, the MFA's Americas
Director, added that the EU's efforts to upgrade relations
with Brazil to a strategic partnership would have a positive
impact on EU discussions with Mercosul.

KOSOVO AND RUSSIA
--------------


9. (C) Liliana Araujo, MFA Director for European Affairs,
said Kosovo would obviously be one of Portugal's top
priorities during the next six months. She noted that
Lisbon's Special Envoy for the Balkans, Antonio Tanger
Correa, is Ambassador in Vilnius. He travels extensively in
relation to his Balkans responsibilities, and he will
maintain Vilnius for now as his home base. Asked if it was
the Portuguese view that the independence of Kosovo might set
a precedent, Araujo responded that Kosovo was a specific case
at a specific time that Lisbon did not expect to set a
precedent, although she said she expected others to claim
that it would. She suggested that the EU-Russia dynamic was
complicated by the Russian electoral process.


10. (C) Roza de Oliveira, the Prime Minister's senior
diplomatic advisor, insisted that Russia must be a part of
any solution on Kosovo, and he declined to be drawn out on
what path the EU ought to pursue in the event of a Russian
veto of the draft UN Security Council Resolution.

THE MIDDLE EAST
--------------


11. (C) Isabel Pedrosa, MFA Director for the Middle
East/Maghreb, pointed out that Lisbon has appointed two
full-rank Ambassadors to be Special Envoys in the region.
The Portuguese Consul General in Barcelona will serve as
Envoy to the Mediterranean and the Barcelona Process while
the Ambassador in Algeria will serve as Envoy to the Middle
East Peace Process (MEPP). Pedrosa confirmed that PM Jose
Socrates hopes to travel to the Middle East early in the
presidency and added that his agenda will be to try to
advance progress on the key issues by engaging all of the
relevant actors.

ASIA
--------------


12. (C) Gabriela Albergaria, MFA Director for Asian Affairs,
commented that Portugal's Asia agenda will feature three
summits: with China, India, and the first-ever EU-ASEAN
Summit at the heads of state/heads of government level, but
added that the main focus will be on the first two. The
EU-China Summit will focus on energy/climate change and a
Partnership and Cooperation Agreement (PCA). When asked, she
said there is no political will among the EU member states to
revisit the arms embargo, given the internal lack of
consensus. The agenda for the EU-India Summit will emphasize
science and technology and energy/climate change, although
there also will be exploratory talks on a PCA agreement. The
ASEAN summit, to be held November 22 in Singapore, will be a
largely symbolic event to mark 30 years of dialogue between
the two blocs and will seek to adopt a joint action plan.
Separately, Albergaria noted that Portugal currently is too
stretched to contribute to an ESDP mission in Afghanistan.

ECONOMIC ISSUES ) ALTERNATIVE AND RENEWABLE ENERGY
-------------- --------------


13. (C) Mario Lobo, the Ministry of Economy's DG for Economic
Activity, who had recently taken up his position, indicated
that Portugal's economic priorities are reviewing the EU's
competition and innovation policy, launching an EU energy
policy with a focus on renewable energy, and refining the

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EU's market access strategy to better compete in the
globalization of the economy. He also stated that Lisbon
would emphasize boosting economic ties with the countries
with which it will hold summits. Deputy DG Nuno Lucio
expressed frustration that summits between US and EU
officials create expectations that often are not fulfilled
afterwards. Chief of the Energy Policy and Planning Division
Maria Luisa Portugal Basilio emphasized that Lisbon, with an
eye toward meeting the EU's goal of having 20 percent of its
energy in 2020 derive from alternative and renewable sources,
would concentrate its efforts on linking climate change with
energy issues. The Portuguese urged Washington to work with
Lisbon to meet the 2020 goal.

DOHA ROUND/WTO TALKS
--------------


14. (C) EUR/ERA Director Lucas suggested that Lisbon's
upcoming summits with Brazil and India would provide good
opportunities to narrow the gap with Brasilia's and New
Delhi's positions. Miranda Duarte agreed that would be a top
item on the agendas for those summits.

THE ROLE OF THE TRANSATLANTIC ECONOMIC COUNCIL (TEC)
-------------- --------------


15. (C) The MoE's Nuno Lucio observed that the TEC would seem
to replace the US-EU economic ministerial meetings, since, in
Lucio's view, many of the issues would overlap. He also asked
about the relationship between the TEC and US regulatory
agencies. EUR/ERA Deputy Director Eric Luftman answered that
a key goal of the TEC is to facilitate collaboration between
European authorities and OMB in developing common regulations
for currently unregulated technology sectors, such as
biofuels. Mario Lobo mentioned that Lisbon and Madrid had
recently created a biotechnology partnership and cooperation
with us in this area would be welcome.

COMMENT
--------------


16. (C) Portugal intends mostly to shepherd issues inherited
from the German presidency, particularly putting the
finishing touches on the reform treaty, and to be prepared to
react to developments in hot spots such as Kosovo and the
Middle East. At the same time, Lisbon is staking the success
of its presidency in part on the EU-Africa Summit, a
political hot potato that could create a diplomatic row with
at least some EU and/or African countries. While Portugal
appears ready to permit Mugabe's participation in the face of
British and Dutch opposition, the threat that additional EU
leaders may stay away could weaken Lisbon's willingness to
allow the Zimbabwean president a platform to thumb his nose
at the international community. More generally, senior
Portuguese officials have expressed their interest in
collaborating closely with us during their presidency, but
Lisbon's inclination to play facilitator and fair broker on
issues that require more aggressive leadership )- Kosovo and
Russia in particular )) means it will require some bucking
up from us.


17. (U) EUR/ERA Director Lucas cleared this cable.
O'Neal