TEC STAKEHOLDERS PRAISE DAY-LONG OUTREACH EVENT

UNCLAS USEU BRUSSELS 000948

C O R R E C T E D C O P Y (PARIS ADDRESSEE ADDED)

SENSITIVE
SIPDIS


STATE PASS TO USTR AND OIRA/OMB
HHS FOR FDA/LUMPKIN
PARIS also for USOECD

E.O. 12958: N/A
TAGS: ECON EFIN ETRD EIND ECIN EAGR EINV ETTC OECD PREL
EUN

SUBJECT: TEC STAKEHOLDERS PRAISE DAY-LONG OUTREACH EVENT

SUMMARY:
--------------


1. (U) Over 70 EU business, consumer group and European Commission
representatives joined USEU staff June 29 for an energetic
discussion of the Transatlantic Economic Council and Transatlantic
Economic Framework(TEC/TEF),organized jointly by the Transatlantic
Business Dialogue (TABD) and USEU in Brussels. The TEC stakeholders
participated enthusiastically in a full day of TEC review and update
workshops, where USEU staff and European Commission counterparts
briefed TEC stakeholders on progress in the key areas of horizontal
and sectoral regulatory cooperation, capital markets integration,
investment, innovation, IPR and secure trade/transport. The
workshops were followed by high-level speeches, including by EU TEC
Co-Chair Gunter Verheugen, TABD Co-Chair Jurgen Thumann and USEU
Charge Murray. Stakeholders, Verheugen and other participants
praised the event as providing a needed update and boost to TEC
momentum. Verheugen emphasized the need to raise TEC ambitions,
improve stakeholder relations and agree on a medium term TEC
roadmap/workplan, and underscored his hopes for a successful fall
TEC meeting. Verheugen, other Commission officials and the
stakeholders reacted positively to USEU's proposal to distribute
informal project updates and to deepen our TEC innovation
cooperation, including via launching an innovation working group.
End Summary.


2. (U) The Transatlantic Business Dialogue on Monday June 29
organized a day-long series of "workshops" on each of the eight main
themes under the 2007 U.S.-EU Framework for Promoting Transatlantic
Economic Integration. USEU provided facilities for the event,
co-sponsored by AmchamEU, the U.S. Chamber, BusinessEurope and the
European America@BC). The day was broken ins on horizontal regulatorld`
p hphe evening by a "high-lev by
Enterprise and Inher Verhuegen, the new
ope, Juergen Thumann, of the Transa
tlantic Leghan Evans, the Czech
PrQurope, the Deputy Chief oish Permanent Represeon, and USEU
Charge (U) In opening remarkQsiness organizations
e of the Framework in promompetitiveness, of theuncil
(TEC) in promoting understanding and cooperation on strategic
international economic policy issues and of th% TEC co-chairs in
trying to find novel ways to resolve outstanding problems. All
spoke as well of the need to focus on steps that would help address
the financial crisis (including through capital market integration),
the need for cooperation on energy technologies to address climate
change, the importance of IPR, and the need for a long-term view and
perseverance. All want the governments to look for areas of
progress, including through the use of mutual recognition.

Horizontal Regulatory Cooperation
--------------


4. (U) John Farnell, Director of International Affairs, DG
Enterprise (DG ENTR) opened the first session by expressing
appreciation for the "impressive" cooperation between the U.S. and
EU on horizontal regulatory cooperation. He said that progress had
been made in risk assessment discussions, noting that even if the
U.S. and EU have different policies on how to manage risk, fruitful
exchanges on evaluating risk are taking place. Farnell added that
discussions on impact assessments are also showing results, and that
he looked forward to Office of Management and Budget (OMB) case
studies on impact assessments that would be exchanged this summer.
He noted other areas for regulatory cooperation, including emerging
technologies, traceability, and self-regulation, and expressed hope
that some of these issues could be discussed at the July 24 U.S.-EU
High Level Regulatory Cooperation Forum (HLRCF) to be held in
Brussels.

5. (U) USEU Econoff agreed with Farnell's assessment and said the
regulatory conversations between the U.S. and EU were among the most
durable and productive TEC outcomes. He said another important area
of cooperation has been on trilateral talks with China in the areas
of risk and regulation. Econoff also noted the bimonthly digital
video conference meetings between the Consumer Product Safety
Commission and DG SANCO in the Toy Safety Working Group, as well as
prospective discussions between toy industry representatives on both
sides of the Atlantic on convergence in product safety regulation.
Econoff emphasized that U.S. regulators were eager to discuss
nanotechnology at the HLRCF.


6. (U) On standards, Farnell opened with the issue of Suppliers'
Declaration of Conformity (SDOC) for certain low-voltage electrical
items, and provided a comprehensive report on the current OSHA
consultations, saying the EU expected a determination on possible
use of SDOC in the U.S. in the fall of 2009. In addition, at the
request of the October 2008 High level Regulatory Cooperation Forum,
the U.S. and EU are undertaking a joint study of our respective
approaches to using international standards in our regulations; this
should be completed this year. USEU Econoff added cooperation
between the American National Standards Institute (ANSI) and the
European Standards Organizations (ESO) is excellent, and will be
furthered at a joint ANSI-ESO conference in Washington in
September.

Sectoral Regulator
-------------- al regulatory cooperation
most compressed, with tded into three fifteen
`euticals, medical devic@g (F
DA and DG SANCO); ces and electrical
equipmnd FCS); and food safety (Q

8. (U) Commission and`orted on medicinal
pronducted by the U.S. FDEA (European Medicines Agtlantic
Administrative S p@Qc,p@hn `irectorate for the QualiQalth Care (EDQM).
Fa rnell
Scientific Advice MEA and FDA assessors
Qtheir views on scientQ
development phase of newics. This program is
p new products for which do not exist or EMEA'Qfer
significantly.


9. (U) Both sides emphasized commitments to adopt and promote Global
Harmonization Task Force (GHTF) guidelines, which involve not only
the U.S. and EU but also Australia, Canada and Japan. Progress has
also been made on developing Global Nomenclature for Medical Devices
and discussion on Unique Device Identification. In the area of
nanotechnology, both the U.S. and EU have determined that the
current regulatory frameworks in place are sufficient for
appropriate regulation of medical devices using nanomaterials.


10. (U) USEU staff noted progress in international cooperation on
cosmetics regarding alternative test methods to reduce the need for
animal testing with the agreement on a Framework for International
Cooperation on Alternative Test Methods (ICATM) in September 2008
and an implementing Memorandum of Cooperation between the involved
agencies in April 2009. This is of particular interest for the EU
because in March 2009 a marketing ban of products containing
ingredients tested on animals became effective, although for some
tests the ban will not be in force until 2013. The U.S. and EU also
collaborate in the International Cooperation on Cosmetics Regulation
(ICCR); the ICCR has validated nine out of thirty-four testing
alternatives to date.

11. (U) Food Safety: Perhaps because of the heated TEC debates last
year about the effective EU ban on U.S. poultry imports, the
discussion of food safety issues was short, with the government reps
referring to the mid-June discussions between Health and Consumer
Safety Commissioner Vassiliou and her USDA and HHS/FDA counterparts
in Washington. There si a general sense of a need to return to
"first principles," and to strengthen our cooperation scientific
risk analysis to address the host of food safety issues both sides
have.


12. (U) Chemicals: The discussion of pure chemical issues was also
quick, with the government representatives pointing to our
cooperation, including in the OECD, on good laboratory practices,
classification and labeling. The representative from DG Environment
noted that DG ENV, DG Enterprise and the European Chemicals Agency
have frequent discussions with EPA about dangerous chemicals,
especially as the EU implements REACH and the U.S. reviews the Toxic
Chemical Substances Act.


13. (U) Regarding automotive sector cooperation, USEU Econoff
reminded the audience that the National Highway Transportation
Safety Authority (NHTSA) and DG ENTR concluded an MOU on cooperation
in motor vehicle safety and emissions standards in June 2008. He
reviewed EU and U.S. joint work to secure international recognition
of electronic stability controls in the United Nations Economic
Commission for Europe (UNECE) World Forum for Harmonization of Motor
Vehicle Regulations (WP29). DG ENTR and NHTSA met June 22-26, 2009
on the margins of a WP 29 plenary in Geneva to discuss next steps in
developing a workplan for compatible approaches to key automotive
standards, including possibly for global diesel engine standards.
Representatives from the two agencies will meet in Washington late
September to discuss an exchange of information on our respective
work-programmes, ways to improve the effectiveness of the 1998
Agreement, identification of priority areas where the principle of
functional equivalence could be applied, and regulatory developments
on two and three-wheel motor vehicles.


14. (U) Suppliers Declaration of Conformity for "Low-risk"
Electrical and Electronic Products was discussed briefly, with DG
ENT pointing to the EU's long history of using SDOC and the current
OSHA evaluation of over sixty submissions to its January Request for
Information on the use of SDOC for this relatively limited product
range. The OSHA review is expected to be completed in early fall.

Capital Markets Integration
--------------


15. (U) Nathalie de Basaldua, Deputy Cabinet Head for EU Internal
Market Commissioner Charlie McCreevy, told the audience that the new
Obama Administration Financial Regulatory Reform proposals show
"strong convergence" with the EU's own efforts to strengthen
financial services regulation and improve supervisory oversight. De
Basaldua praised the success of the U.S.-EU Financial Market
Regulatory dialogue (FMRD) in the past and noted that our regulatory
discussions may need to move to a higher level in the future. She
said the EU and U.S. share general principles guiding our respective
financial regulatory reform efforts, noting they are "enshrined in
the G-20 agreements." Divergences of approach are only found in
details of proposals, she explained, adding that the need to
cooperate is understood by all.


16. (U) De Basaldua listed the many regulatory initiatives
undertaken by the European Commission as "emergency responses" to
the crisis, (e.g. higher deposit guarantees, legislation on credit
rating agencies). She acknowledged that differences in the
respective U.S. and EU political timetables forced the EU to take
action sooner than the U.S.; if the EU had not acted, it would have
lost an entire year due to European Parliamentary elections and
transition to a new Commission late this year. She said June 2
meetings in D.C. between Commissioner McCreevy and Secretary
Geithner, Fed Chairman Bernanke, SEC Commissioner Shapiro and others
proved fruitful. In the first half of July, she revealed, a
delegation from DG Internal Market will visit Washington to continue
regulatory discussions with their counterparts.


17. (U) De Basaldua criticized the "Buy America" provision included
in U.S. stimulus legislation, because "the principle has been taken
up by other countries and may have a detrimental effect on trade,"
jeopardizing the recovery, but she said the political imperatives
that dictated it were understood, and asked that the EU's political
choices be equally respected.


18. (U) During questions, a European Banking Federation
representative expressed concern that the Framework objective of
mutual recognition for brokers and dealers was not moving forward;
De Basuldua acknowledged this but affirmed that this remains an
"Key" objective. When asked about Congressional hesitation about
mutual recognition, she added that achieving this requires a
thorough analysis of supervisory practices on both sides, adding
that this is "not an emergency" issue. TABD expressed concerns
about EU regulatory measures that appeared to build divergences in
the transatlantic market, and underscored this is both dangerous and
contrary to the spirit of the Framework. De Basuldua disagreed with
his recommendation that we agree on "principles" for a regulatory
approach, saying we had that and that the differences are in the
details; here, she stressed the Commission "recognizes the need for
us to work on parallel tracks." A TACD representative praised the
U.S. Administration's proposal to establish a Consumer Financial
Protection Agency (CFPA),and expressed concern that EU reform
efforts lacked a consumer focus. De Basaldua responded that the EU
focus has been on protecting retail investors, but said the
Commission would welcome more input from TACD and other consumer
groups on ensuring that reforms adequately protect consumers.

Investment
--------------


19. (U) USEU presented progress in the Investment Dialogue,
recalling its creation, the May 2008 Open Investment Statement, the
efforts to ensure parallel approaches to sovereign wealth funds,
discussion of bilateral issues (CFIUS implementing regs, member
state measures) and work on third country barriers. We noted the
development of a detailed matrix of barriers and sectors in the key
third countries, our sharing of analyses and nascent steps toward
developing a coherent approach to lobbying on these issues. The
main comment from the floor was a reiteration of concern about how
Buy American policies can both create barriers and provide cover for
third countries, such as China, to adopt both trade and investment
barriers themselves.

Innovation
--------------


20. (U) Gerald Santucci, head of unit for Network Enterprises and
Radio Frequency Identification Devices (RFID) at DG Information
Society (DGINFSO),praised the TEC's role in promoting U.S.-EU
collaboration over the past two years on RFID development and
deployment. He highlighted the joint DGINFSO-DOC/EPA pilot project
on radioactive isotope tracking as an example of progress
facilitated by the TEC. Santucci stressed the importance of
deepening TEC work on innovation, a vital tool through which our
economies can exit the current global crisis and restore long-term
competitiveness. He noted the value of the TEC facilitating
cooperation on E-accessibility and E-health, but suggested the TEC
should also examine policy issues around Next Generation Network
(NGN) deployment, since high-speed connectivity is a critical
enabling factor for innovation throughout the economy.


21. (U) USEU staff welcomed Santucci's comments, reviewed specific
progress on innovation best practice exchanges, S&T cooperation and
nanotechnology discussions, and presented the USEU proposals that
TEC innovation collaboration be restructured and that a TEC
innovation working group be established. Peter Droll, head of unit
for innovation policy at DG Enterprise, said the TEC is an ideal
mechanism to discuss how to use innovation to address the biggest
societal challenges: aging, health care, climate, sustainability,
and others. He welcomed the idea of a TEC innovation working group,
and suggested this could discuss cooperation on metrics, cluster
policy and and public sector innovation, in addition to reviewing
work on the ongoing innovation projects.


22. (U) Representatives from Oracle, Intel and TACD supported the
innovation working group proposal as well. The Intel rep stressed
that the working group should be a public-private undertaking, with
a significant private sector role, while the TACD rep said that a
working group should discuss the importance of interoperability and
open standards in promoting innovation.

Intellectual Property Rights
--------------


23. (U) Pedro Velasco-Martins of DG TRADE reported that negotiations
on the Anti-Counterfeiting Trade Agreement (ACTA) are progressing
well and are a good exercise to improve enforcement standards around
the world. He said ACTA parties hope to conclude negotiations early
in 2010. Velasco-Martins staff explained how the U.S. and EU have
been collaborating successfully on IPR enforcement for almost four
years now, with a joint meeting with stakeholders held annually. He
stressed that cooperation on third countries, particularly China,
has been especially useful. USEU staff reaffirmed the value of
transatlantic IPR cooperation, noting it is critical to progress on
innovation. Stakeholders raised concerns over the lack of
transparency in ACTA negotiations; Velaso-Martins took issue with
the idea of non-transparency but said negotiating parties have
agreed not to make current texts public. He said the discussions
will address issues such as the Internet and green technologies in
later sessions.

Secure Trade/Transport
--------------


24. (U) David Dolan, USEU Customs and Border Patrol Attach (CBPA)
and Gordon Wright with the Commission Taxation and Customs Union
Directorate General (TAXUD) gave an overview of high-profile
dialogues relating to the Secure Trade focus in the TEF/TEC. Dolan
noted the recent completion of the annual World Customs Organization
(WCO) Policy Commission and Council sessions, during which the U.S.
legal requirement for 100 percent radiation detection and imaging
(scanning) for U.S.-bound maritime containers, to take effect in
2012, was constructively addressed by numerous delegations, with
those WCO Members further encouraged to engage the U.S. Congress in
an appropriate manner on their continued concerns over the
requirement. Dolan explained that the Department of Homeland
Security would continue to work responsibly toward implementation of
the law, with a view to applying a well established risk management
approach to the deployments, just as wi`al
stakeholders notedrns over the U.S. scanningir keen interest to stay eQ


25. (U) Additionally`eviewed ongoing
dialoal recognition of theirtor supply chain security Q
Customs-Trade Partnershi TPAT) in the U.S.,
an@rator (AEO) in the EU. version of the U.S./EUary 2009) as
the most c`ng key operational, techni
specified that a k%s the nature of the
to bring this forward, xpressed need for a relevQch to routinely
exchan ighlighted the continuor engagement, most noivate
Sector ConsultQ had met the prior week Q be shared with participa
PSCG is doing excellent work to advise WCO Members of the value and
benefit the business community could gain though implementation of
Mutual Recognition protocols.

Energy and Other Potential TEC Topics
--------------


26. (U) USEU EMIN noted the near-universal support among
stakeholders for including energy technologies in the Framework to
reflect the political priority placed upon this, to provide
additional impetus for the cooperation and to ensure compatibility
as both the U.s. and the EU accelerate development of these
technologies to meet our common climate change objectives. He noted
that the previous US Administration had proposed this broadening of
the Framework, but added that the new one was considering other ways
of show-casing our cooperation in this field. He added that in fact
our cooperation is accelerating, pointing to the recent exchanges
between the US Department of Energy and the Europeans, including on
the margins of the March U.S.-EU S&T Agreement Joint Management
Committee meeting, and underscored that, whatever the arrangements
to guide this cooperation, the Secretaries, Commissioners and
Ministers participating in the Transatlantic Economic Council
meeting may well want to talk about this particularly in the context
of the significant policy issues raised as we transform our
societies to low-carbon economies.

27. (U) Addressing the broader question of the Framework and the
TEC, all participants stressed the importance of having such
strategic level discussions and of the need to have the process be
as transparent as possible. In this context, the audience welcomed
the detail and depth of the workshops.

High-Level TEC Awareness-Raising Event
--------------


28. (U) The day's outreach meetings were capped by a high-level TEC
awareness raising event featuring speeches by outgoing TABD Co-Chair
Jurgen Thumann, Enterprise Commissioner Gunter Verheugen, Czech
Minister for European Affairs Stefan Fule, European Parliamentarian
Jonathan Evans, Swedish Permanent Representation Ambassador Ulrika
Barklund Larsson, and USEU Charge Christopher Murray. TABD EU
Director Jeffries Briginshaw also briefed the high-level attendees
on key points from the working sessions earlier in the day.


29. (U) Outgoing TABD co-chair (and incoming President of Business
Europe) Jurgen Thumann praised TABD and other stakeholders for
organizing the event and persevering with their work to advance TEC
issues. Thumann declared that the TEC should focus on four key
issue areas: 1) fighting protectionism and reaffirmation of the
importance of open markets; 2) economic crisis recovery and
collaboration in financial supervision and reform efforts; 3) energy
and climate cooperation to align our respective carbon markets,
regulatory policies and energy efficiency efforts; and 4)
cooperation on promotion of innovation and strong intellectual
property rights protections.


30. (U) European Commission Vice-President and Enterprise
Commissioner Gunter Verheugen told the audience that the TEC is at
the heart of U.S.-EU economic cooperation, which in a larger
political context underpins the primary axis of global stability in
the 21st century. He said our joint TEC work is based upon our
mutual interests and values in raising global prosperity and
stability, and is reliant upon strong stakeholder input and
participation. He is convinced of the Obama Administration's
commitment to the TEC after his two meetings with NSC TEC Co-Chair
Michael Froman and President Obama's affirmation of the TEC to EU
leaders in Prague in April. Verheugen said the U.S. and EU should
raise our joint level of ambition for TEC work, making it our
central platform for economic engagement, focused around the issues
of economic crisis responses, commitment to free trade, energy and
climate cooperation, and reduction of transatlantic regulatory
barriers. He welcomed the U.S. proposal to strengthen the TEC
innovation dialogue, said we should broaden TEC cabinet and
stakeholder participation, and reaffirmed the need to define a
medium-long term joint TEC workplan.


31. (SBU) Czech Minister of European Affairs Stefan F|le stressed
the importance of giving the TEC more political weight and
visibility going forward. He reminded the audience that the
transatlantic relationship had been a Czech EU Presidency priority,
and that the TEC acts as a useful framework for encouraging this
dialogue. Mr. F|le mentioned how greater political leadership from
the European Council would help improve upon current TEC efforts.


32. (SBU) Outgoing European Parliamentarian and EU Chair of the
Transatlantic Legislators Dialogue Jonathan Evans, complimented TABD
and other business organizations for working together in such a
collaborative manner on TEC issues and avoiding "turf wars."
Despite the successes of the TEC, Mr. Evans shared his
disappointment that a June 2009 TEC did not take place. He said
that the extended political transition period in the U.S. and EU
have clearly slowed TEC progress, but underscored the need to
maintain momentum to keep the TEC alive and effective. He noted
that the Obama administration will push for labor interests and
unions to be represented in discussions. Evans also raised the need
for greater involvement of U.S. Congressional representatives in the
TEC process.


33. (SBU) Ambassador Ulrika Barklund Larsson, from the Swedish
Permanent Representation to the EU, reiterated the priorities of the
Swedish EU Presidency (economic crisis recovery, climate change, EU
institutional reform) and the importance of maintaining continuity
through changes in EU leadership. She said that Sweden will
continue to push for strong transatlantic cooperation through the
TEC and otherwise, and welcomed the fall TEC meeting.

34. (SBU) Charge Murray thanked the TABD and other stakeholders for
making the TEC a success and for their enthusiastic participation in
the day's outreach events. He emphasized how stakeholder input has
been critical to the U.S. and EU work to improve TEC functioning and
broaden the issue areas addressed. He challenged stakeholders to
keep up their efforts to ensure that the process achieves further
successes.

Comment
--------------


35. (SBU) The TEC stakeholder meetings and high-level speeches
generated a great deal of positive energy and enthusiasm over the
two-year old TEC/TEF project. The events motivated the European
Commission, which has been engaged in a lengthy internal review of
its TEC management, to go on the record on progress and key goals.
Stakeholders had told us progress in key areas has been flagging,
but were cheered by USEU and Commission optimism over our
expectations for a successful Fall meeting in Washington. The
events, and USEU's informal updates of all major TEF projects, went
far toward meeting stakeholders' longstanding demands for
transparency. Also notable were the strong and positive
participation in the event by the Transatlantic Consumer Dialogue,
and the positive reaction to the USEU proposal to restructure our
TEF innovation project and establish a U.S.-EU innovation working
group.


36. (SBU) Stakeholder clearly still hope for additional clarity on
U.S. TEC priorities, and a better sense of the Administration's
goals for the Fall TEC and beyond. USEU is ready to work with DC
and EU counterparts toward meeting such goals and establishing a
longer-term workplan for the TEF and TEC, which will be critical if
this mechanism for transatlantic economic integration,
competitiveness and growth is to reach its full potential.

MURRAY