BAVARIAN TAKE ON DOHA AND CLOSER TRANSATLATIC INTEGRATION

UNCLAS MUNICH 000106

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ETRD PREL ECON GM
SUBJECT: BAVARIAN TAKE ON DOHA AND CLOSER TRANSATLATIC INTEGRATION



1. In a discussion with senior officials from the Bavarian Ministry
for Economic Affairs and the State Chancery, Embassy Berlin EMIN
stressed the urgency of German and EU action to revitalize the Doha
Development Agenda (DDA) now. He pointed to statements by
Chancellor Merkel and other senior Germans about the need to act to
make the DDA a success and that the window of opportunity seems
likely to close with the March EU Council meeting.


2. The Bavarian officials were concerned large agricultural
producers, in particular Brazil, view Doha primarily as a means of
entry into EU markets. Bavarian farmers - who account for only
about 3 percent of the GDP of a German state primarily known for
electronics and other strong international high-tech industries -
are not ready to "sacrifice their livelihood on the altar of
globalization." While conceding that Bavaria, with its strong
manufacturing base would be benefiting from a successful DDA, the
state's officials admitted their position on the Round was "closer
to France."


3. The Munich economic officials stated one way ahead was
uncoupling assistance to farming from production, e.g., by treating
farmers as environmental stewards. They conceded, however, that
local farmers have resisted that scheme. EMIN also noted objections
various partners have pointed out with such an approach.


4. Turning to press reports on the Chancellor's transatlantic
economic initiative, the Bavarian government economic experts said
there would be little enthusiasm for the initiative if it is
supposed to develop some sort of economic fortress against China and
India. The officials, however, saw the need for and benefit of
further integration of the U.S. and EU economies, noting on the one
hand, Bavarian firms such as Siemens or BMW, as well as small and
medium-sized companies that have invested in the U.S., and U.S.
firms on the other hand, including GE, that have operations in
Bavaria.


5. Although Bavaria has no direct responsibility for trade policy,
its state government can influence trade policy decisions at the
federal level as a member of the coalition committee, through CSU
deputies in parliament and CSU ministers in the federal government,
as well as through its representation in the upper house, the
Bundesrat.


6. Previous reporting from Munich is available on our SIPRNET
website at www.state.sgov.gov/p/eur/munich/.