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