GURRIA PLEASED WITH RUSSIAN INCLUSION IN OECD

C O N F I D E N T I A L PARIS 002073

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E.O. 12958: DECL: 05/15/2017
TAGS: OECD RS
SUBJECT: GURRIA PLEASED WITH RUSSIAN INCLUSION IN OECD
ENLARGEMENT PACKAGE


Classified By: Deputy Secretary John Negroponte, for reasons 1.4
(b) and (d)


1. (C) Summary: Deputy Secretary John Negroponte and
Assistant Secretary for Economic, Energy, and Business
Affairs Dan Sullivan met on May 15 on the margins of the
OECD Ministerial Council Meeting with OECD Secretary General
Angel Gurria. Gurria expressed satisfaction that Russia's
inclusion in the enlargement package had not been blocked. He
assured that he would work in the coming year to help reach a
consensus on the continuing issue of the
organization's scale of contributions and gave assurances
of his continuing support for the U.S. proposal to house the
Partnership for Democratic Governance in the
OECD. End summary.

Russia in the Enlargement Package
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2. (C) Gurria expressed appreciation for the position that
the United States had ultimately taken with respect to
Russia's OECD candidacy, which made it possible for Russia
to be included in the accession package. He understood that it
was a complicated decision, but he believed that allowing Russia
to begin the accession process would be in the interest of
Russia and of all OECD members. There would be a host of
economic hurdles that Russia would have to clear, including WTO
membership, agreements on capital movements and freedom of
investment, and much more, and the
Secretariat would directly monitor Russia's progress on

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these areas. Gurria distanced himself, however, from being
the arbiter of conditionality relating to political actors.
These, he said, would have to be decided by the OECD members
through a consensus of the Council. Ultimately, he
noted, the Council determines all conditions for membership.
Noting concerns that some members had raised
about the possibility that Russia would block the future
membership of Latvia or Lithuania, he said that Russia had
offered to give assurances that, once in the OECD, it would
not create obstacles to others' accession prospects. The
Deputy Secretary commented that while Russia had done some
things relatively well, such as management and investment of its
oil wealth, the U.S. would continue to watch the process closely
and believed that Russian accession could take a long time.

Enlargement Financing
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3. (SBU) The Deputy Secretary noted that the U.S. would continue
to press all members of the OECD, new and old, to cover the cost
of their participation in the organization, as second-stage
negotiations continued in the coming year. Gurria agreed that
it would be an embarrassment to current members not to raise
their contributions to the level being demanded of new members,
and said that he would help in putting together strategies to
get to consensus on this point. While on the subject of
contributions, Gurria made passing reference to U.S. payments
owed to the organization, and without further elaboration handed
the Deputy a proposal for bringing U.S. payments up to date.
(Gurria's proposal will be relayed to IO/MPR and EUR/ERA.)

Partnership for Democratic Governance
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4. (U) Deputy Secretary Negroponte handed Gurria a copy of the
letter from Secretary Rice asking for Gurria's continued support
for the U.S.-proposed Partnership for Democratic Governance
(PDG),and offering a U.S. seed contribution of $1 million per
year for the first three years. Gurria reiterated that he
supported the concept. He noted that the OECD had taken up the
subject at
meetings on April 17-18, and that there was a high level of
interest. Although demand for the services to be offered by the
PDG were still uncertain, he believed that conceptually it fit
well with the OECD's mission, and that if it could get off to a
successful launch, others would want to contribute to it. The
Secretariat was working on defining terms of reference for the

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program, from which it would be better able to estimate costs.

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