APPROACHING THE EU IN ADVANCE OF THE OCTOBER 15-

C O N F I D E N T I A L STATE 141316 SIPDIS E.O. 12958: DECL: ASS: 10/15/17 TAGS: EUN PREL PGOV ETRD ETTC KPAL YI RS LY IS IZ, IR, SY, LE, CD, BM SUBJECT: APPROACHING THE EU IN ADVANCE OF THE OCTOBER 15- 16 FOREIGN MINISTERS MEETING (GAERC) ¶1. (U) Classified by William Lucas, Office Director, EUR/ERA. Reason: 1.4(b) and (d). ¶2. (U) This is an action request. See paragraph 15. ¶3. (SBU) Summary: EU Foreign Ministers will hold their next General Affairs and External Relations Council (GAERC) meeting in Luxembourg on October 15-16. We expect the agenda to include: WTO/DDA negotiations, Kosovo, EU- Russia relations (in preparation for the October 26 EU- Russia Summit),Libya, the Israeli-Palestinian Peace Process, Iraq, Iran, Chad, and Burma. Posts are requested to include the SIPDIS caption on their response cables. A background section covering some of these issues is provided prior to a section containing talking points. Points are to be delivered as soon as possible at the appropriate level to EU members only. Other embassies should not/not deliver these points. BACKGROUND -------------- WTO/DDA NEGOTIATIONS ¶4. (SBU) Our goal remains a successful Doha outcome that opens markets and creates new trade in agriculture, industrial goods and services. Since September, talks in Geneva have been underway to consider the July draft texts issued by the agriculture and non-agricultural market access (NAMA) Chairs. Although we have concerns about elements of both draft texts, we have pledged to negotiate on the basis of these texts because they are possibly our only chance to move the talks forward. Consensus is possible, but only on the ranges in the texts that yield a real and substantial market access outcome. ¶5. (SBU) Key advanced developing countries (e.g., Brazil, India and South Africa) have not yet signaled their willingness to engage on the basis of the market access ranges and flexibilities set out in the draft NAMA text. Informal reports indicate that the (anti-ambition) "NAMA- 11" countries, led by Argentina and South Africa, are holding to their extremist position on developing country tariff cuts -- which is far from the range contained in the text. Our view, shared by the EU, is only the most ambitious end of the range in the draft text provides market access that would yield meaningful new trade flows, and only if the current flexibilities in the text are not expanded. ¶6. (SBU) On the agriculture text, there has been serious engagement in Geneva among a wide range of players, including the EU. The work is focused on closing the gaps in the draft text related to market access commitments, especially those by the advanced developing countries. Engagement was bolstered by the U.S. reaffirmation of our willingness to negotiate on the range in the text for domestic agricultural support - provided similar commitments were made by key trading partners with regard to both draft texts. LIBYA ¶7. (SBU) The EU and key member-states, such as the UK and France, have pushed the U.S. to rapidly normalize relations with Libya. We continue the process of normalization and are setting the stage for a symbolic turning point in our relationship with a proposed visit by the Secretary. In this context and as with the EU, the Libyans have asked for greater cooperation in science and technology, education, commerce, culture, and defense. We are exploring opportunities in these areas and have already passed Libya a draft Science and Technology Agreement and recently signed a USD 90,000 grant with the U.S.-based Global Heritage Foundation to help restore the ancient Greek city of Cyrene. Other areas of cooperation that are currently in the interagency clearance process include a Trade and Investment Framework Agreement (TIFA), expanded cultural and educational programming, and support for a nuclear regional medical center among other initiatives. The Administration and Congress continue to remain engaged in securing Libyan agreement to compensate past American victims of terrorist attacks, including LaBelle and Pan Am 103 victims. We also remain concerned about the lack of human rights and transparent, democratic, and accountable government in Libya. Such outstanding issues and concerns will continue to place limitations in normalizing relations fully. ISRAELI-PALESTINIAN PEACE PROCESS ¶8. (SBU) We are working to achieve parallel progress on political talks between President Abbas and PM Olmert, Palestinian capacity building (the mission of Quartet Representative Blair),and tangible changes on the ground on movement and access, security, and other issues. We want to outline the status of our efforts in all these areas for the Europeans. IRAQ ¶9. (SBU) The expanded UNAMI (UN Assistance Mission for Iraq) mandate, the International Compact with Iraq, and the upcoming Expanded Neighbors meeting in Istanbul in early November are part of international engagement efforts aimed at securing and stabilizing Iraq. Positive momentum has been created by the renewal of UNAMI, the convening of a UN High Level Meeting on Iraq, the appointment of a new SRSG, and visits to Iraq by French FM Kouchner and Swedish FM Bildt. Renewed European interest in helping Iraq and support for an increased UN role has invigorated our international engagement strategy. The EU should be encouraged to engage neighboring countries to support the Iraqi government, expand its diplomatic representation in Iraq and and increase EU development assistance levels to Iraq. IRAN ¶10. (C) The Foreign Ministers of China, France, Germany, Russia, the UK, the U.S., (P5+1) and EU High Rep Solana agreed on September 28 to reaffirm the dual track strategy on Iran: to offer negotiations, but to be prepared to impose further UNSC sanctions should Iran fail to meet the terms of such negotiations. ¶11. (U) We are pleased with the outcome of this meeting. The U.S. has consistently supported a dual track approach on Iran. We have also made clear our view that a third UNSC sanctions resolution is the appropriate next step in light of Iran's failure to comply with the Council's demands, including to fully suspend its proliferation sensitive nuclear activities. This view is consistent with the Council's intent, as expressed in UNSCR 1747, to adopt further appropriate sanctions measures should Iran fail to comply. ¶12. (U) Parallel to the UNSC track, the U.S. also welcomes France's strong leadership aimed at securing EU sanctions against Iran outside of the UNSC framework. Additional bilateral sanctions are necessary to increase pressure on Iran and make clear that it will face serious political and economic costs if it continues to defy the UNSC. ¶13. (U) We have joined our P5+1 partners in proposing a framework for direct discussions with Iran on the nuclear issue -- as outlined in the June 2006 offer - and the Secretary has made clear she will represent the U.S. in SIPDIS any talks that come about as a result of Iran's adhering to the requirement that it fully and verifiably suspend its enrichment and reprocessing activities. But with the failure of Iran to accept that offer, we have no other alternative but to continue increasing pressure via sanctions. The responsibility lies with Iran to choose negotiations. SYRIA-LEBANON BORDER ¶14. (C) The EU Council is considering a Syria-oriented proposal by Spanish FM Moratinos for an ESDP mission to the Lebanon-Syria border. Significant questions - including whether an EU mission would deploy to the Lebanese, Syrian, or both sides of the border - remain unanswered within the Council, but the Secretariat will nonetheless send an "exploratory" mission to Beirut and Damascus in mid-October. Initially uninformed, Lebanese PM Siniora does not oppose an EU border mission, but hopes it will be Lebanon-focused and avoid rewarding Syrian bad behavior (such as through the promise of equipment or assistance to ensure Syrian cooperation). We would strongly prefer the EU's mission be limited to the Lebanese side of the border, but are willing to tolerate a minimal level of EU engagement with Damascus in order to establish an international presence. 15.(SBU) Please deliver the following points to the appropriate MFA official(s) as soon as possible (in advance of October 16 GAERC). BEGIN NON-PAPER TEXT: WTO/DDA We believe that now is the time to insist on a firm commitment from the advanced developing countries to negotiate on the basis of the ranges and flexibilities on market access in the draft texts. The U.S. remains committed to a successful Doha Round that opens markets and spurs new trade flows. We are at a critical juncture in the negotiations and the stakes are high. September brought the resumption of negotiations based on the draft Agriculture and Non- Agricultural Market Access (NAMA) texts. The question now is whether WTO Members will carry work forward on the basis of these texts into an agreement or allow a deal to slip away. The U.S. clearly signaled its willingness to negotiate on the basis of the texts - including on the key issue of U.S. domestic agricultural support, provided others step forward and commit to the ranges and flexibilities in the draft texts that will yield a strong market access outcome. We note that the EU shares our view that a successful outcome is only possible at the most ambitious end of the range on developing country tariff cuts in the draft NAMA text with no expansion of the current flexibilities -- as only this provides the market access that would yield meaningful new trade. We look forward to working with you during these intense negotiations to secure a strong overall Doha outcome in all negotiating areas. KOSOVO We fully support the Troika-led negotiations as a final attempt to find common ground between Belgrade and Pristina. We believe that the parties should take this opportunity seriously to reach an agreement. A mutually-accepted outcome is clearly in the best interests of both sides. We are therefore pressing the parties to be flexible and engage constructively with the Troika. We emphasize that the current period of engagement is time- limited. UN Secretary General Ban asked the Contact Group to report back to him by December 10, after which the Troika's mandate will conclude. Almost two years after we began the Kosovo status process, the time has come to arrive at a solution. While we hope the Troika's efforts succeed, we must be realistic and recognize that the chances of success are slim. We believe prudent planning is warranted and that we must consider what we might do if this current period of engagement does not produce an agreement. If there is no breakthrough by then, we believe that the Ahtisaari plan and internationally-supervised independence for Kosovo is the best way forward. We also judge it necessary to examine creatively how to establish an international supervisory regime over Kosovo after status is determined, including the planned ESDP Rule of Law Mission and the International Civilian Office (ICO). With the December 10 deadline approaching for the Troika's work, we believe that a unified and clear EU position on Kosovo is crucial. The status quo in Kosovo is no longer tenable and failing to find a timely solution will be a source of increasing tension and instability in the Balkans. All of us have a common interest in preventing new instability in southeast Europe. RUSSIA The U.S. seeks a cooperative relationship with Russia but believes we should not paper over disagreements. We should continue to engage with Russia and advance cooperation wherever possible but not be afraid to speak out when needed. We do not seek to provoke Russia, but we must also be prepared to push back when necessary. The Russians show no signs of trading off ONE issue, such as Kosovo, against another, like Missile Defense, and therefore neither should we. Russian intransigence continues to limit our efforts across a range of issues, such as Kosovo, Georgia, Missile Defense, and the CFE. We and the EU share the same strategic objectives and we believe that we should ensure common tactics, wherever possible. We should not let Russian transgressions in Georgia go unchallenged, yield on Kosovo Final Status, or ignore a retreat from democracy. Transparency is essential to ensure free and fair elections, and we believe that Russia needs to move immediately to invite OSCE Office for Democratic Institutions and Human Rights (ODIHR) election observers for the December 2007 Russian Duma elections and March 2008 Presidential elections. We are concerned that further delay could hamper the ability of ODIHR to conduct a full, effective observation. On CFE, we welcome European support for the U.S. "parallel actions" concept expressed at NATO and we urge you to press Moscow to work with us to end the current impasse by engaging on the plan. We need to show Moscow that the Allies are united on the parallel actions plan, including on the need for Russia to take action on Istanbul commitments if we agree to move forward on ratification of the Adapted Treaty this fall. We believe that the EU ought to develop a more coherent external energy strategy to encourage Russia to operate within a free market and competitive energy market framework. We encourage the EU to join us in pressing Russia to live up to its G8 commitments on energy while also taking a more proactive approach in the Caspian/Central Asia to ensure diversification. We look forward to continued consultations with the EU and Member States on how to best bring Russia on board on these key issues. LIBYA We welcome EU efforts to normalize relations with Libya and confirm that we are doing the same. We are setting the stage for a symbolic turning point in our relationship with a proposed, but as yet unscheduled, visit by Secretary Rice. As they have done with the EU, the Libyans have asked us for greater cooperation in science and technology, education, commerce, culture, and defense. We are exploring opportunities in these areas. The Administration and Congress continue to remain engaged in securing Libyan agreement to compensate past American victims of terrorist attacks, including LaBelle and Pan Am 103 victims. We also remain concerned about the lack of human rights and transparent, democratic, and accountable government in Libya. Such outstanding issues and concerns will continue to place limitations in our efforts to normalize relations fully. ISRAELI-PALESTINIAN PEACE PROCESS PM Olmert and President Abbas have met five times since June, and recently formed teams to work on a joint statement that could lay the foundation for serious negotiations on the establishment of a Palestinian state. The international meeting planned for later this year will aim to advance that political process and rally international support for the parties' efforts, while also building on the efforts of Quartet Representative Blair on Palestinian economic and institutional capacity building. The September Ad Hoc Liaison Committee meeting in New York City was the first step forward on the capacity building track, and will be followed by Blair's own efforts on the ground and a December donors' conference to generate financial and programmatic support for the Palestinians, consistent with a multi-year national development plan that Palestinian PM Fayyad is finalizing. Budgetary support is vital, as the PA will face a budget crisis in December when Israel finishes repaying customs and revenue arrears. The U.S. is reviewing what more it can do on this front, and would strongly urge others to do the same. At the same time, we will work to achieve meaningful progress on the ground to build confidence between the parties and generate support for progress on the international and economic/institutional tracks. With respect to the international meeting, as Secretary Rice explained at the September 23 Quartet meeting, the focus will be on supporting Abbas and Olmert's efforts on the bilateral track. The framework for discussions will be, consistent with the Roadmap, the goal of two states living side-by-side in peace and security based on the principle of land for peace, UNSCRs 242, 338, and 1397, and the Arab League Peace Initiative. Key participants will be the Israelis and Palestinians, of course, but we also view the Quartet and the Arab League Follow-Up Committee as natural participants as regional support is key to success, and essential for a comprehensive Middle East peace. IRAQ The expanded UNAMI mandate, the International Compact with Iraq, and the upcoming Expanded Neighbors meeting in Istanbul in early November are part of international engagement efforts aimed at securing and stabilizing Iraq. Positive momentum has been created by the renewal of UNAMI, the convening of a UN High Level Meeting on Iraq, the appointment of a new SRSG, and visits to Iraq by French FM Kouchner and Swedish FM Bildt. The EU can help sustain the current momentum in the following ways: Working with us to persuade hesitant Arab states to agree to a Neighbors Secretariat. Secretary General Ban said during the September 22 UN meeting on Iraq that a formal support mechanism was needed to improve regional coordination and dialogue. Assisting SRSG Steffan di Mistura as he seeks new ways to increase UN engagement in Iraq. He will begin consultations following the Neighbors conference and will be looking for broad international support for his mandate. Increasing development assistance in areas such as education, HEALTH and rule of law. At the UN Meeting on Iraq, FM Kouchner suggested that the EU could do more on refugees and IDPs, training the Iraqi civil service and judicial sector, public finance reform and healthcare. Maintaining current financial assistance levels and working with the GOI to better distribute or invest the funds. Expanding diplomatic engagement with Iraq through increased high level visits and opening embassies and consulates. Encouraging Iraq's neighbors to provide political support for the government and encourage follow-up to the political measures agreed by Iraqi leaders in their August 26 Communiqui. Iraq's neighbors also need to engage with al-Maliki on border security, refugees, national reconciliation, financial assistance, and other issues. IRAN We welcome continued U.S. - EU cooperation on Iran. It is vital to the success of international diplomatic efforts that the EU and the U.S. continue to speak with ONE voice on Iran. The Foreign Ministers of China, France, Germany, Russia, the UK, the U.S., and High Rep Solana (P5+2) agreed on September 28 to reaffirm the dual track strategy on Iran: to offer negotiations, but to be prepared to impose further UNSC sanctions should Iran fail to meet the terms of such negotiations. The P5+1 Political-Directors will meet in the coming weeks to finalize the text of the third sanctions UNSCR so that it is ready to table with the full Council for a vote in November, should Iran fail to fulfill its UNSC obligations to suspend enrichment and resolve outstanding issues with the IAEA. Parallel to our efforts in the Council, the U.S. also welcomes France's strong leadership aimed at securing EU sanctions against Iran outside of the UNSC framework. Additional bilateral sanctions are necessary to increase pressure on Iran and make clear that it will face serious political and economic costs if it continues to defy the UNSC. We urge other EU Member States to follow the French and UK lead in considering EU "autonomous measures" to contribute to increased international pressure on Iran, and hope the EU will adopt such measures between now and a likely UNSC vote on a third resolution in mid-November. France has suggested autonomous measures in two categories: adding more proliferation-linked entities to the EU's existing list of entities designated for asset freezes and visa bans, and adopting other financial and economic measures, which are yet to be defined. In the latter category, we urge the EU to consider banning export credits for Iran, as well as prohibiting new investment in Iran's energy sector. While we would welcome progress towards a common position on these sanctions at the October 15-16 GAERC, we urge, at the very least, that the GAERC issue a strong statement: (1) calling for a third UNSCR if Iran fails to suspend enrichment and take tangible steps towards implementation of the IAEA work plan, and (2) endorsing the concept of autonomous sanctions against Iran outside of the EU framework. SYRIA-LEBANON BORDER We strongly support a Lebanon-oriented EU border mission to aid implementation of the UNSCR 1701 arms embargo that would include strict conditions to avoid giving advantage to Syria. We urge the EU Council to immediately seek Lebanese input into its proposal. We note that any border mission will be faced with serious challenges including an un- demarcated border and Popular Front for the Liberation of Palestine-General Command (PFLP-GC) border bases. Lebanese requests for Syrian cooperation on these issues have been refused repeatedly. CHAD We strongly support the deployment of a French-led joint ESDP/UN peacekeeping operation to Eastern Chad and Northeastern Central African Republic (CAR) to ensure security in the Chad-based camps for refugees from Darfur and CAR and at sites for displaced persons. The U.S. is ready to provide peacekeeping training to countries that would contribute troops to a follow-on UN mission and would like to know what countries the EU sees as most likely. The U.S. is also considering providing funds for police training for countries that would provide police to the current UN gendarme mission. BURMA We have already taken some action to designate additional individuals under our financial sanctions and visa ban. We are looking at ways to target the regime's financial supporters and would encourage the EU to consider similar measures. ASEAN's September 27 statement shows new movement in ASEAN's approach to Burma. We consider it essential that we urge key ASEAN members to follow-up this statement with action to pressure the regime to initiate a genuine dialogue with the democratic opposition. We should urge ASEAN members to weigh-in with Beijing, New Delhi, and Tokyo with this message. It is essential that we continue to urge China, India, and Japan to push the regime to release political prisoners and begin a dialogue with the opposition. The UN Security Council must remain engaged in order to keep international attention and pressure on the regime. (this will be OBE by the time the demarche is delivered) We believe it is imperative that we closely coordinate our actions on Burma in the coming days/weeks. ¶16. (U) Minimize considered. RICE