US-EU-CANADA TRILATERAL MEETINGS ON IRAN AND US-EU

C O N F I D E N T I A L SECTION 01 OF 05 LISBON 002750

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E.O. 12958: DECL: 10/20/2017
TAGS: PGOV PREL EUN UN XG XF AR IR
SUBJECT: US-EU-CANADA TRILATERAL MEETINGS ON IRAN AND US-EU
MIDDLE EAST TROIKA MEETINGS IN LISBON, OCTOBER 18-19

Classified By: DCM DAVID BALLARD, REASONS 1.4 (B) AND (D).


1. (C) SUMMARY: On Iran, all parties agreed on the need for
concerted action in response to its nuclear program and
pretensions for regional hegemony, as well as its
deteriorating human rights situation. On the Middle East
Peace Process (MEPP),the EU emphasized its support for the
planned international meeting and sought U.S. guidance on
ways it could be helpful. Although the EU emphasized the
need for a "consensus" president in Lebanon, it nonetheless
agreed with the U.S. on the challenges posed by Syria's
meddling in Lebanese internal affairs and is studying the
viability of an EU border monitoring mission to restrict the
flow of weapons from Syria to Lebanon. The EU expressed
frustration with its efforts to provide assistance for
reconstruction and national reconciliation in Iraq and looked
to the U.S. to provide greater coordination of such efforts.
Both the U.S. and EU welcomed bilateral talks between the
government of Morocco and Polisario on Western Sahara,
although there were differences regarding how best to move
forward. END SUMMARY.

IRAN--DOMESTIC DEVELOPMENTS
--------------


2. (C) Portugal's Ambassador in Tehran, Jose Moreira da
Cunha, opened the discussion by observing that the Iranian
government was not in a weak, end-of-regime position. High
oil prices had produced 5 percent annual economic growth in
recent years and he projected 4 percent annual growth in
coming years. Although unemployment and inflation remained
high (17 percent and 13.2 percent, respectively) in an
outdated economy "dominated by the Iranian Revolutionary
Guard Corps (IRGC)," this was compensated for by the regime's
ability to use oil revenues for social services. Moreira saw
no serious, organized opposition to the regime in Iran,
emphasizing that all real opposition was either "in the
cemetery" or abroad. Moreira and other speakers emphasized
the regime's use of fear, propaganda (mainly anti-U.S. and
anti-Israel),and the apparatus of repression to maintain
stability. He saw the 2008 Majlis (legislative) elections as
a bellwether for whether the regime would move in a pragmatic
direction or remain in the hands of hardliners. One problem
for the regime was its inability to employ the thousands of
university students graduating every year, a source of
frustration among the younger generation and a possible
source of future discontent.


3. (C) Both the Portuguese and the Commission highlighted
the deteriorating human rights situation and reiterated their
commitment to raising human rights issues with the regime and
continuing efforts to work with Iranian civil society on
people-to-people contacts. The Canadian delegation viewed
the recent crackdown on dissent as suggestive of regime
unease; the crackdown had also made contact work difficult
for the Canadian embassy in Tehran. They noted the Canadian
mission to the UN was circulating a draft resolution on the
human rights situation; the U.S. and EU delegations agreed to
lobby other governments for wider for support of this effort.
The Canadians emphasized the apparent Iranian power
struggles should be viewed as little more than a reflection
of Supreme Leader Khameini's maneuvers to maintain his hold
on power. Opposition to President Ahmadinejad does not
necessarily mean opposition to the regime; serious opposition
would have to target Khameini and the IRGC. The Canadians
indicated that the economic impact of sanctions and economic
mismanagement were difficult to measure because widespread
black market activity has softened the resultant hardships
for the population.


4. (C) The U.S. delegation noted previous U.S.-EU-Canada
meetings on Iran had raised the possibility of a multilateral
conference to coordinate current and future programs for
engagement with Iranian civil society, and proposed that such
a conference be held by the end of 2007. The delegation
welcomed EU and Canadian suggestions for increasing the
effectiveness of democracy programs in Iran. The delegation
also raised the case of American citizen Robert Levinson,
missing since a spring 2007 trip to Iran's Kish Island, and
asked the EU to press Iran to allow the Swiss Embassy in
Tehran to carry out consular functions (on behalf of the
U.S.) in the case.

IRAN NUCLEAR PROGRAM
--------------

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5. (C) The U.S. delegation reiterated the USG commitment to
the P5 1,s dual-track approach to Iran's nuclear program.
It is essential to pursue negotiations with Iran, but should
the November reports of EU High Representative Solana and
IAEA Director General ElBaradei not be positive, a third UNSC
resolution would be necessary . The US delegation welcomed
the EU Foreign Minister's statement of 15 October and urged
the EU to act on French FM Kouchner's suggestion of
autonomous EU sanctions to maximize the pressure on Iran to
negotiate. Such EU action was essential to make diplomacy
work. The US strategic objective is to get Iran back to the
negotiating table and the passage of time only redounded to
the benefit of Iran,s nuclear program.


6. (C) Portugal's MFA Director for Security and Defense
Issues, Joao Corte-Real, said the EU also supported the
dual-track strategy, and was considering autonomous
sanctions, but strongly preferred additional action in the
UNSC in order to avoid the appearance that the issue was an
ideological confrontation between Iran and the West. Other
EU participants expressed concern about Russian and Chinese
cooperation; they feared those countries would fill any any
trade or financial void the EU might create, thereby
minimizing the impact of unilateral EU steps. Even if
continuing to work through the UNSC proved difficult, the
value of keeping Russia and China with the West and further
isolating Iran made it worth the effort. The Commission
reiterated that a consensus of all 27 Member States would be
necessary to implement autonomous EU sanctions, implying that
such a consensus might be difficult to reach ) or
considerably watered down. The EU side expressed concern
about pending sanctions legislation before the U.S. Congress
that would have extraterritorial application. Such
legislation risked alienating allies rather than affecting
Iran. The EU also expressed doubts about listing the entire
IRGC as a terrorist organization, preferring to list
individual leaders in order to avoid cutting off an entire
channel of communication with the regime.


7. (C) The Portuguese noted the Iranians seemed to prefer
talking to the IAEA (where they felt they had more support)
than to HR Solana, who would have his first meeting since the
September 28 P5 1 agreement with Chief Iranian Nuclear
Negotiator Larijani on October 23. The EU anticipated that
the Iranians would ensure ElBaradei's report would stave off
a third UNSCR. In response, the Canadians stressed that they
would support a third UNSCR if the reports showed anything
less than full Iranian compliance with all IAEA obligations
and UNSC requirements. The Canadians also stated UN
sanctions were the ideal, but if additional UN sanctions were
not possible, they were studying options. Like the U.S.,
however, Canada has already done almost everything it can in
terms of unilateral action.

IRAN-INTERVENTIONS IN THE REGION
--------------


8. (C) The Canadian delegation suggested Iran's
interference in the internal affairs of other countries in
the region was worsening; Canada was most concerned with its
activities in Afghanistan because of the presence of Canadian
troops. Canada was working with the governments of Pakistan
and Afghanistan on border security in hopes of halting the
flow of weapons and fighters to the Taliban, but Tehran had
rejected any cooperation. Ottawa saw Iran's motives as both
ideological and tactical; Tehran sought both regional
hegemony and to develop proxies such as Hamas and Hizballah
to deter and distract the U.S. and Israel. The Canadians
viewed these as relationships of convenience (a point on
which the EU agreed) and questioned how far such proxies
would actually go for Iran in the event of a U.S. or Israeli
military conflict with Iran, noting the proxies would likely
do whatever they judged in their own interest. The Canadians
wondered to what degree the various institutions of the
Iranian state were aware of all the activities of the IRGC in
neighboring countries. The EU highlighted Iran's diplomatic
efforts to break its isolation, noting its quest for allies
in Africa and Latin America.


9. (C) The U.S. delegation sought EU support for
Argentina's efforts to bring to justice the six Iranians
suspected of involvement in the 1994 bombing of the Argentine
Jewish Mutual Association (AMIA). Ambassador Moreira noted
Tehran,s "unusually moderate" reaction to Argentine efforts

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which he attributed to Iranian desire to avoid strains in
their charm campaign in Latin America. In response to
questions from the EU and the Canadians, the U.S. noted the
two ambassadorial-level U.S.-Iran meetings in Iraq had not
resulted in a diminution of Iranian lethal support for Iraqi
militants.
MIDDLE EAST PEACE PROCESS
--------------


10. (C) Portugal's deputy envoy for the Middle East Peace
Process, Bernard Futscher Pereira, noted the EU welcomed the
planned international meeting, and was now unified in its
desire to make the meeting a success. At its most recent
foreign ministers meeting the EU had sought to strike a
positive tone, while recognizing that many obstacles
remained. Underscoring the EU,s desire for involvement with
the MEPP, Futscher Pereira (and other EU representatives)
stressed the need for the U.S. to outline " in as much detail
as possible " what role it envisioned the EU playing. The
European Commission representative noted the EU,s
distinction as the largest donor to the Palestinian
Authority, adding that this assistance could only have
lasting effects if accompanied by political progress. If
political progress were made, the EU could increase its
programs to assist the Palestinian government and people.
The EU,s relationship with Israel has improved; indeed, the
EU is seeking to increase cooperation, including through
Israel,s possible integration into the EU internal market.
The EU welcomed the invitation of the Arab League Follow-Up
Committee to the international meeting, but it also
questioned whether the sequencing set out in the original
Road Map remained necessary.


11. (C) The U.S. delegation explained the three U.S.
priorities for the meeting were progress in the bilateral
discussions between PM Olmert and President Abbas, progress
in the capacity-building efforts of Quartet Representative
Blair, and progress on the ground. The ultimate goal was two
states living side by side in peace and security, but both
sides needed to demonstrate political will.


12. (C) The EU explained that the "action plan" discussed
in its most recent foreign ministers meeting (and alluded to
by German FM Steinmeier in a recent newspaper article) would
seek to combine in one coherent document the many different
strands of EU and Member State activities, as well as develop
guidelines for future assistance. However, any viable EU
action plan depended on the achievement of real political
progress between the two parties. All EU speakers stressed
the peace process could best be advanced through U.S.-EU
collaboration.

LEBANON/SYRIA
--------------


13. (C) The U.S. delegation stressed the need for Lebanon's
presidential election to be free, fair, and free of foreign
influence, with the goal of electing a strong president able
to secure the country's borders, disarm illegal entities, and
enable the UN Special Tribunal for Lebanon to function. The
arms embargo in UNSC 1701 needed to be reinforced and an EU
monitoring mission on the Syria/Lebanon border would be a
step in the right direction if coordinated with the Siniora
government and if ensured of serious intentions on Syria's
part. The delegation also urged the EU to provide financial
support to the Lebanon tribunal. The EU speakers described
Lebanon as the crossroads of all the conflicts in the region,
making it a venue for foreign rivalries and conflicts to play
out. The EU agreed with the general U.S. positions on the
election, but asserted that a "consensus" president would
best be able to settle internal political differences and
retain legitimacy.


14. (C) The EU committed to take all possible steps to
ensure the success of the Special Tribunal and is examining
the UN Secretary General's request for financial
contributions. The EU was exploring the possibility of a
border monitoring mission, but questioned Syrian willingness
to cooperate, and thus would not make a decision until after
an exploratory mission to Damascus and Beirut. The EU
believed Syria was key to the resolution of all regional
issues; they noted Damascus often says it can take positive
steps, but fails to follow through. As an example,
Portuguese MFA Middle East and Maghreb Director, Isabel
Pedrosa, noted Syrian officials have privately (and orally)

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acknowledged that the Shebaa Farms area is part of Lebanon.

IRAQ AND THE REGION
--------------


15. (C) The EU emphasized its commitment to assisting
reconstruction and national reconciliation in Iraq, but had
become frustrated by the difficulty of implementing program
activities due to the security situation. The EU was also
concerned by the flow of Iraqi refugees, both in the region
and in Europe, and asked for details on U.S. views and
actions on this issue. The EU noted it sought "new means of
engagement" in Iraq and was considering inviting Iraqi FM
Zebari to address the next meeting of its General Affairs and
External Relations (GAERC) foreign ministers meeting. The EU
also questioned "repeatedly" whether the planned Iraq
Neighbors Meeting in Istanbul would go forward, given the
internal difficulties of the Iraqi government.


16. (C) The U.S. delegation said Washington intended the
Istanbul meeting to go forward, with the goals of securing
additional international support for the Iraqi government,
agreeing on a neighbors support mechanism, and setting dates
for a follow-up meeting at the working level. The delegation
urged the EU to support SRSG De Mistura in his plans to
expand UN efforts in Iraq in areas such as health, refugees,
national reconciliation, and humanitarian assistance. The
U.S. also encouraged the EU to assist with donor
coordination, and to consider a greater presence on the
ground. The EU countered that the US, as the largest donor
with the greatest capacity on the ground, was better suited
to coordinating donor assistance. In response to a question
from the EU on the Turkish parliament,s recent vote
authorizing cross-border operations into Iraq against Kurdish
guerrillas, the U.S. delegation noted the USG was in contact
with the Turkish government and Kurdish leaders in Iraq in an
effort to prevent additional conflict.

WESTERN SAHARA
--------------


17. (C) Pedrosa stated the EU welcomed the UN General
Assembly statement on Western Sahara reached via consensus
between Morocco and Algeria. It had been surprised by a
quick agreement on the text and the contrast between
Algeria's low-key approach and Morocco's forceful lobbying.
Unfortunately, the two rounds of direct talks between Morocco
and Polisario thus far had shown the process would take a
long time to produce results. A third round of talks would
soon be held in Switzerland. The U.S. delegation voiced
uncertainty about how much progress the talks may have
achieved and expressed support for the Moroccan proposal for
autonomy for Western Sahara. The delegation urged the EU to
support the inclusion of detailed language in the UN mandate
that would focus future talks on the Moroccan proposal; vague
language risked stagnation and reliance on the UN (rather
than progress in negotiations) to maintain stability. The
U.S. also urged the EU to join it in funding confidence
building measures between the two parties. The EU questioned
whether Algeria would support such an approach and whether
the international community could focus so much on the
Moroccan proposal when the Polisario had rejected many of its
key points.

NEXT MEETINGS
--------------


18. (U) The Slovenian delegation proposed that the next
U.S.-EU-Canada trilateral meetings on Iran and the U.S.-EU
Middle East troika meetings take place in Washington on April
9-10, 2008.


19. (U) Participants:

Portugal:

Moreira da Cunha, Ambassador to Iran
Joao Corte-Real, MFA Director for Security and Defense Issues
Isabel Brilhante Pedrosa, Director for Middle East and
Maghreb Issues
Ivo Fernandes Inacio, Desk Officer for Middle East and
Maghreb Issues
Matilde Salvacao Barreto, Desk Officer for Middle East and
Maghreb Issues
Mariana Hancock, Desk Officer for Iran

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Bernardo Futscher Pereira, Deputy Envoy for the Middle East
Peace Process

United States:

David Ballard, DCM Embassy Lisbon
Henry Wooster, Deputy Director, Office of Iranian Affairs
Alyce Tidball, Deputy Political Counselor at the U.S. Mission
to the European Union
Matthew Harrington, Political-Economic Counselor, Embassy
Lisbon
Molly Treiber, Political-Economic Officer, Embassy Lisbon
Jeffrey Giauque, USEU Desk Officer, EUR/ERA

Canada:

Dennis Horack, Director, Gulf and Maghreb Division
Jeffrey McLaren, Deputy Director, Iran/Iraq, Gulf and Maghreb
Division
Catherine Boucher, First Secretary, Canadian Mission to the
European Union

EU Council Secretariat:

Wolfgang Barwinkel, Middle East/Mediterranean Task Force

EU Commission:

Patricia Llombart-Cussac, Head of Unit for the GCC, Iran, Iraq

Slovenia:

Miljen Majlem, Chair of Middle East and Gulf Section
Tomaz Mencin, Minister Plenipotentiary, Head of the
Department for Asia, Africa, and Pacific
Hoffman