GERMANY ON TEC: MORE MODEST AGENDA, READY TO DEAL

UNCLAS SECTION 01 OF 02 BERLIN 001314 SENSITIVE SIPDIS STATE PASS TO JKESSLER IN EUR/ERA; PSCHROEDER IN EUR/CE; USTR AND OMB E.O. 12958: N/A TAGS: ETRD EFIN PREL ECIN EU GM SUBJECT: GERMANY ON TEC: MORE MODEST AGENDA, READY TO DEAL REF: A. BRUSSELS 78 ¶B. BRUSSELS 437 ¶C. BERLIN 396 BERLIN 00001314 001.2 OF 002 ¶1. (SBU) Summary: The German government, worried that the Transatlantic Economic Cooperation (TEC) process may stall at the upcoming TEC meeting on October 26-27, is setting more modest goals. The German government has submitted five agenda items - on financial regulations, innovative technologies, auto environmental and safety standards, biofuels, and 100% container scanning -- and asks that the U.S. does the same. The goal is to proceed with a common agenda of workable issues and keep the process going. German industry remains fully on board. End summary. German Government Tables TEC Proposal -------------- ¶2. (SBU) Last month, the German Economic Ministry sent Embassy Berlin a paper with its comments on the upcoming October 26-27 TEC meeting. The paper is based largely on a position paper that EU Commissioner Verheugen issued in July. The German paper proposes putting only those issues of interest to both the U.S. and the EU on the TEC agenda. The Economic Ministry identified five issues of particular interest to Germany: A) Overcoming the financial crisis by cooperating on rules for credit rating agencies and solvency requirements for insurance companies, as well as mutual recognition of standards for supervising financial markets; B) Increasing cooperation in RFID and electric vehicle technologies (aka "electromobility"); C) Coordinating environmental and safety standards in the automobile industry; D) Cooperating on sustainability criteria for the use of biofuels; and E) Cooperating on solutions to deal with the challenge of 100% container scanning. ¶3. (SBU) Once priority areas have been identified, the paper calls for the U.S. and the EU to develop a concrete plan of action. In order to ensure continuity of the TEC process, the paper further suggests establishing a "working-level group" that stays in regular contact, to maintain progress from one TEC meeting to another. And it supports the U.S.-proposed and now launched U.S.-EU Energy Council, which the Commission previously regarded with skepticism, as an appropriate forum for cooperation on energy issues, provided that it does not duplicate the work of other fora. The paper ends with a strong appeal to both sides to produce a work plan and achieve concrete results in the TEC. ¶4. (SBU) Subsequent to receiving the FRG's paper, a group of trade contacts at the German Federal Ministry of Economics led by Knut Bruenjes, Deputy Director General for Trade Policy, emphasized to us the importance of achieving concrete results at the October 27-28 TEC meeting. They showed a clear preference toward more modest and BERLIN 00001314 002.2 OF 002 realistic goals that can actually be accomplished. Bruenjes noted that, whereas the Verheugen position paper of July had said, "all areas linked to ethical judgments and convictions should be excluded from mutual recognition," it was his view that, despite divergent U.S. and EU world views on many matters, both sides should pursue practical solutions to bridge such differences, as was done in the case of hormones in beef. As another example, Bruenjes suggested a common US/EU standard for a plug for electrical vehicles. Agreement on a simple, but practical, thing like a common plug could, in his view, serve as a major deliverable with an immediate practical consequence that the man in the street would understand and appreciate. ¶5. (SBU) Because container scanning is enshrined in U.S. law, Bruenjes suggested that the EU and the U.S. work together to develop technologies to make scanning work efficiently, and then market those technologies, including to third countries. German Industry on the Same Page -------------- ¶6. (SBU) In recent discussions, representatives of the Federation of German Industries (BDI) reaffirmed their strong support for the TEC, agreeing with the overall thrust of the German government's paper. The most important topics for BDI continue to be: A) Energy and climate (energy efficiency, R&D, regulatory cooperation and emission trading), B) Innovation technologies (RFID, nanotechnology and electro mobility), C) Secure trade/100% scanning, D) The suppliers' declaration of conformity (SDOC),and E) The protection of intellectual property. BDI also continues to emphasize the need for high-level political support for the TEC process from both sides of the Atlantic to move the process forward. Comment -------------- ¶7. (SBU) The German Econ Ministry's bottom line is that they want results and a work plan that aims for deliverables. In turn, they would like the U.S. to identify its own top agenda items, work together with them to narrow the topics down to a common agenda, and come up with a concrete work plan at the working level to keep these agenda items moving forward. Failing that, they are concerned that the TEC process will reach a stalemate. MURPHY