SCENESETTER: THE 2008 WORLD ECONOMIC FORUM ANNUAL

UNCLAS BERN 000035 SIPDIS SENSITIVE SIPDIS DEPT FOR EUR/AGS (PLEASE PASS TO USTR) E.O. 12958: N/A TAGS: PREL ETRD SENV ENRG EAID PGOV SZ SUBJECT: SCENESETTER: THE 2008 WORLD ECONOMIC FORUM ANNUAL MEETING IN DAVOS, SWITZERLAND (JAN 23-27) -------------- WORLD ECONOMIC FORUM ANNUAL MEETING -------------- ¶1. (U) The Geneva-based World Economic Forum (WEF) is an independent international organization, with a self-proclaimed commitment to "improving the state of the world." It can be thought of as a large think tank with global mobility. The WEF's aim is to be a leader in identifying strategic issues and providing a platform for decision-makers -- from government, business, and the media -- to effect change. WEF meetings are funded by membership fees from about a thousand global companies. ¶2. (U) The annual meeting in Davos is the WEF's signature event, and the largest event of its kind. It offers a unique opportunity for USG officials to convey their messages and to hear what other leaders from around the world are thinking. The exclusive invitation list includes the leaders of member companies, as well as influential leaders from governments, multilateral organizations, academia, media, and NGOs. The program for the WEF can be compared to an annual professional meeting, with panels, lectures, speeches, and theme dinners. Participants must choose beforehand which program elements they wish to attend. The theme for this year's Annual Meeting (January 23-27) is "the Power of Collaborative Innovation." ¶3. (U) WEF organizers again are limiting the number of invitees this year to 2,000, down from a high of 3,000 two years ago, in order to regain its original mission as a small, informal gathering. Even at this size, however, the WEF Annual Meeting in Davos remains the world's largest private gathering of global leaders. Members of the Swiss government participate in WEF meetings, but do not direct the agenda. Swiss security services are deployed to protect the event, however. Security within the Davos Congress Center and select hotels restricts entry to invited WEF guests only, with very limited exceptions for security details. Lodging for non-invitees is scarce and very expensive. ¶4. (SBU) The atmosphere of Davos makes the WEF a unique event and offers USG officials numerous opportunities to advance U.S. foreign policy objectives. Likely attendees to the 2007 WEF include dozens of foreign senior leaders, including Afghan President Hamid Karzai, UK Prime Minister Gordon Brown, Pakistani President Pervez Musharraf, and Ukrainian Prime Minister Viktor Yushenko. Tony Blair, Henry Kissinger, James Dimon, K.V. Kamath, David J. O'Reilly, and Wang Jianzhou are co-chairing this year's meeting. In addition to Secretary Rice, expected USG Cabinet attendees to this year's SIPDIS WEF are Energy Secretary Bodman, Education Secretary Spellings, United States Trade Representative Susan Schwab, and DHS Secretary Chertoff. Likely Congressional attendees include five Senators and three U.S. Representatives. -------------- U.S.-SWISS BILATERAL RELATIONS -------------- ¶5. (SBU) Switzerland is neither a member of the European Union, nor NATO -- a unique status among major Western European nations. Switzerland's prominent banking sector, advanced technological sector, diplomatic good offices, humanitarian tradition, and status as Protecting Power for the United States in Tehran and Havana make healthy U.S.-Swiss bilateral relations important. The bilateral relationship has been fundamentally strong, but was strained during the past ten years, first due to the Holocaust Assets issue, and then by Swiss objections to USG policies vis-a-via Iraq and Guantanamo Detainees. Recognizing that a drift in bilateral ties was not in Switzerland's own interest, the Swiss Federal Council (Cabinet) decided in May 2005 to enhance cooperation in the political, counter-terrorism/law enforcement, and trade spheres. These efforts resulted in the signing of three agreements in 2006: The Framework Agreement on Enhanced Political Cooperation; the Operative Working Agreement on Counterterrorism Cooperation; and the Trade and Investment Cooperation Forum. ¶6. (SBU) Political Cooperation: The U.S. and Swiss governments pursue cooperation in areas of key mutual interest, in the Balkans, the Broader Middle East and North Africa (BMENA),Sudan, South and Central Asia, and Latin America. Themes include terrorist finance, counterterrorism, human rights, humanitarian disaster relief, Muslim integration, and UN reform. The Swiss have deployed 200 soldiers to Kosovo, and about 20 to Bosnia. The Swiss public's adherence to traditional neutrality, however, has slowed government efforts to double Switzerland's peacekeeping strength. In November, the Swiss Defense Minister announced plans for Switzerland to withdraw its contribution (two staff officers) from ISAF, expressing concerns whether the mission was still coverd by the limits of the Swiss military's peacekeeping mandate. ¶7. (SBU) Counter-terrorism and Law Enforcement: Law Enforcement cooperation remains nascent, as Swiss legal restrictions and practice limit the information they share to that with a specific U.S. nexus. An upgraded Operative Working Agreement, which came into force in December 2007, should allow joint investigations under limited conditions. On export controls, the Swiss are signatories to all relevant multilateral regimes. They approach export control and non-proliferation in earnest, but have relatively few resources dedicated towards intelligence and enforcement. Expanding the level of cooperation in these areas are among the Embassy's primary goals. ¶8. (SBU) Trade and Investment: Switzerland has the 16th largest economy in the world, is the 12th largest aid donor, the 4th largest financial center, and a major source of direct investment in the United States. The United States is Switzerland's second largest trading partner. Swiss economic officials initially approached the USG about pursuing a free trade agreement in 2005. Though USTR and the Embassy encouraged this movement, the Swiss Federal Council as a whole later balked at commencing talks, not wanting to fully open Switzerland's highly protected agricultural sector. USTR subsequently proposed the creation of a Trade and Investment Cooperation Forum to resolve more modest trade disagreements. The USG and Swiss governments also participate in a Joint Economic Commission (JEC) to review broad economic themes. -------------- -- POLITICAL SYSTEM: HOW THE SWISS MAKE DECISIONS -------------- -- ¶9. (SBU) Switzerland boasts one of the world's most federalized political systems in which considerable authority still rests with individual communities and the 26 cantons (states). The Swiss constitution of 1848 was based on the American Constitution, with a part-time bicameral legislature and only limited competencies assigned to the central government. The seven-member Federal Council (Cabinet) is the executive authority. The presidency rotates among the federal councilors for one-year terms. All four major parties -- ranging from left-wing Social Democrats to the right-populist Swiss Peoples Party -- have at least one seat on the Federal Council, meaning that decisions are necessarily by consensus. Government decisions can be challenged by popular referendum. The dispersal of power throughout the political system has served as both a guarantor of personal liberty and a brake on political change, for good or ill. ¶10. (SBU) Social Democrat Micheline Calmy-Rey, who has been Minister of Foreign Affairs since 2003, is very pro-EU, and often has been critical of the United States. However, she supported Swiss participation in ISAF, advocates an overall greater Swiss peacekeeping presence abroad, and is closely aligned with the USG views on Kosovo. Pascal Couchepin, from the centrist Liberal Party, was elected on December 12 to serve as Swiss Federal President in 2008, succeeding Calmy-Rey in this position. In addition to being the President, Couchepin concurrently serves at Interior Minister. He has been on the Federal Council since 1998, and is a former Economic Minister who helped to launch the Doha Round. ¶11. (SBU) Justice/Police Minister Eveline Widmer-Schlumpf replaced former Justice/Police Minister Christoph Blocher on January 1, following Widmer-Schlumpf's election to the Federal Council on December 12. Both Blocher and Widmer-Schlumpf are from the Swiss Peoples Party (SVP),but Blocher was the SVP's designated candidate for the Federal Council position. In a surprising turn of events that shook up the Swiss political system, Widmer-Schlumpf was elected by a majority of Swiss parliamentarians from other parties, a move that Blocher and his supporter argued was a slap to the Swiss political tradition of "collegiality". The SVP subsequently decided to go into parliamentary opposition, and Widmer-Schlumpf was excluded from the SVP caucus for accepting her election to the Federal Council. Defense/Homeland Security Minister Samuel Schmid also is from the SVP, but has had strained relations with the party. Schmid too was excluded from the SVP caucus when he opted to remain on the Federal Council following the SVP's decision to go into opposition. It remains to be seen how the lack of SVP caucus support may impact Widmer-Schlumpf and Schmid in their work on the Federal Council. ¶12. (SBU) Minister of Economic Affairs Doris Leuthard is from the centrist Christian Peoples Party, is generally pro-free-trade, and is the second newest member of the Federal Council (after Widmer-Schlumpf),having been elected in July 2006. Finance Minister Hans-Rudolf Merz, from the Liberal Party, is known for his low-key style. Rounding out the Federal Council is the relatively moderate Social Democrat Moritz Leuenberger, who is in charge of the Environment, Transportation, Energy, and Communications portfolio. Notwithstanding this division of responsibilities, major decisions within all portfolios are reached by the Federal Council in its entirety, a factor adding to Switzerland's distinct political personality. CONEWAY