FRENCH RECEPTIVE TO A/S SULLIVAN'S PITCH ON TEC

UNCLAS PARIS 000386

SIPDIS

SENSITIVE
SIPDIS

DEPARTMENT PASS USTR

E.O. 12958: N/A
TAGS: ECON ETRD ENRG PREL EAGR EUR FR
SUBJECT: FRENCH RECEPTIVE TO A/S SULLIVAN'S PITCH ON TEC

REF: 2/11 PARIS POINT ON FRENCH GMO LAW


1. (U) Embassy Action Request Para 14.


2. (SBU) Summary: In February 13-14 meetings French Trade
Minister Novelli, MFA Economic Director Masset and PM
Diplomatic Advisor Lapouge told A/S Dan Sullivan they would
be supportive of the Trans-Atlantic Economic Council (TEC)
as an important part of France's EU presidency. On other
issues Novelli said France would pay attention to
"reciprocity" in EU foreign economic relations during its
presidency. France's position on agricultural bio-
technology was evolving, with the amended draft law on GMOs
recently approved by the French Senate a more "balanced"
approach than that of the initial draft. Lapouge said
energy supply issues would figure among France's EU
presidency priorities and briefed on PM Fillon's early
February trip to Kazakhstan. End summary.

Novelli on TEC, 100% Screening, IPR
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3. (SBU) In a February 13 meeting A/S Sullivan, accompanied
by Ambassador Stapleton and SE Boyden Gray, told French
Trade Junior Minister Herve Novelli the U.S. hoped France
would put the TEC high on its agenda for the French EU
presidency. He underscored that the TEC not only could
help deepen transatlantic economic relationship by reducing
and harmonizing regulatory barriers, but also it has a much
broader strategic rationale: enabling the U.S. and EU to
more closely coordinate economic policies vis-`-vis rising
economic powers. France's endorsement would be key to a
successful TEC, and one that helped ensure the
institution's longevity. Novelli said the GOF saw the TEC
as "very important" and the French presidency could "play a
key role" in advancing it. But the May TEC and June U.S.-
EU Summit would precede the French presidency and it would
be important to focus on these first.


4. (SBU) Novelli described cargo security and IPR as GOF
priorities (both in and out of the TEC). U.S. requirements
for 100% screening of containers were a top French concern
given the "costs it would impose" on trans-Atlantic trade.
Novelli saw convergence in U.S. - French interests on IPR.
France recently ratified the London protocol and would
support adoption of a Community patent during its
presidency, he said. "Common reflection" on patent
harmonization issues was a potential area for TEC
discussion. France also was supportive of the
International Anti-counterfeiting and Piracy Agreement (?)
(ACTA). Novelli had accompanied President Sarkozy to China
in late 2007 and the message on IPR had been "very firm."
Pushing together for a stronger Chinese approach on IPR was
important.

Environmental Issues
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5. (SBU) In the wake of its late 2007 "Grenelle"
environmental pact France would be "exemplary" on cutting
carbon emissions. The GOF was considering a variety of
eco-taxes (and had already implemented some) as part of
this effort. It would use its EU presidency to encourage
an "awakening" on the use of such measures among its EU
partners. Cuts in CO2 emissions were inevitable, Novelli
said, the key would be to do so without impacting French
productivity. (Note: Novelli said nothing about France's
proposal for a carbon tax on imports from countries that do
not impose binding limits on CO2 emissions. End note)
A/S Sullivan underscored U.S. - EU convergence on climate
change, especially through the Major Economies process.


6. (SBU) Sullivan raised the issue of GMOs, and Novelli
said the GOF's position was evolving. The French Senate
had passed a "more balanced" amended version of the GMO law
than the one presented to parliament (ref). The position
of Minister of Ecology and Sustainable Development Borloo
was shifting, Novelli claimed, "in spite the views of
environmental groups." France's current ban on MON810
"could be lifted," he said, though he did not specify the
timing or circumstances of a possible rescission.

Reciprocity
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7. (SBU) Novelli previewed other priority issues within his
remit for the French presidency. The GOF would pursue a
European Small Business Act, to include regulatory
simplification and access to public procurement. The GOF
had presented its ideas in Brussels to "enrich the debate"
and the Commission was preparing an initial draft. The GOF
would encourage movement towards freer trade and investment
regimes, but on the basis of reciprocity. The GOF wanted
Europe to be "as open as our partners," but it would demand
a level playing field. Discussion on EU trade defense
measures was a possible "element" in France's strategy for
pursuing reciprocity.


8. (SBU) France continued to hope for a Doha deal, Novelli
said, but it "must be balanced." The GOF felt the
Commission had done the "maximum," in fact surpassing
negotiating mandates on agriculture and industrial access.
France would not "sacrifice its interests" for the sake of
a deal. Sullivan underscored very strong U.S. commitment
to getting a "good, ambitious" agreement. He also noted
the importance of maintaining a public commitment to open
trade and investment, saying that foreign direct investment
was a net benefit regardless of reciprocal limitations that
partners might impose.

TEC Strategic Dialogue Timely
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9. (SBU) In a separate meeting MFA Economic Director
Christian Masset echoed Novelli's support for the TEC. He
warmed to A/S Sullivan's description of the strategic
nature of the TEC as demonstrated by the dialogue that had
occurred over lunch at the November meeting. Such dialogue
could be particularly useful given that France would host
EU summits with a number of key developing economies during
its presidency, including China and India.


10. (SBU) Masset expanded on the French EU presidency
priorities of climate change and energy. The GOF would
look to move forward with Phase II of the Emissions Trading
System, the framework directive on renewables, and a
directive for carbon capture and storage. To reach 2020
reduction goals, half of the gains would come through the
functioning of the ETS, the other half from sectors not
covered by the trading system. It would take strong action
in both areas to achieve EU goals.


11. (SBU) On energy security, France would "put more
emphasis" on dialogue with the Central Asia/Caspian region
on diversification. Masset was keen on A/S Sullivan's
views on the region, and Sullivan highlighted elements of
his latest trip to Turkey, Azerbaijan, and Turkmenistan.
Masset and Sullivan also touched on eventual membership of
India and China in the IEA (septel).

PM Fillon in Kazakhstan
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12. (SBU) PM Fillon's diplomatic advisor Jacques Lapouge
briefed Sullivan on the Prime Minister's early February
visit to Kazakhstan (the first such visit in 15 years).
Calling the trip "pretty encouraging," Lapouge said Fillon
brought a message of support for development of westward
hydrocarbon supply routes. Supply diversification would,
in fact, be a theme of the French EU presidency. Lapouge
said Nazarbayev talked to Fillon about shipping product
across the Caspian, as well as a possible pipeline skirting
the southern shore of the Caspian. He expressed continued
interest in a pipeline to Iran.


13. (SBU) On other issues, Lapouge responded positively to
A/S Sullivan's briefing on TEC (though an advisor had heard
disappointment at EU technical levels over a perceived lack
of progress on EU issues at the first TEC). On G8, the
former Sous-Sherpa questioned whether there was sufficient
follow-through in meeting commitments, notably on ODA. The
body's "credibility is at stake," Lapouge thought. On IPR,
the Heilegendamm Process must aim high and not be pulled
down to the lowest common denominator. Lapouge indicated
the French were interested in keeping alive their proposal
for a FATF-like body for IPR in G8 discussions.

Embassy Action Request
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14. (SBU) French views on energy supply diversification
opportunities in the Caspian Basin are evolving. With the
GOF ready to engage more actively on energy diplomacy in
the region during its EU presidency, this is an auspicious
time to contribute to French thinking. Post encourages the
visit of an appropriate Department, or inter-agency,
delegation to Paris in the coming months for in-depth
discussions with French counterparts on these issues.


15. (U) A/S Sullivan has cleared this cable.

ROSENBLATT