AUSTRIA'S ECON MINISTRY FAVORS A NON-HORMONE BEEF

UNCLAS VIENNA 000107 SIPDIS, SENSITIVE EUR FOR JENNA PURL STATE PASS USTR FOR WILLIAM BUSIS E.O. 12958: N/A TAGS: ETRD ECON EAGR EUN AU SUBJECT: AUSTRIA'S ECON MINISTRY FAVORS A NON-HORMONE BEEF SOLUTION, DAMAGE FOR INDUSTRY LIKELY TO BE LIMITED REF: STATE 4100 ¶1. (SBU) Econoff and Econ Specialist delivered reftel talking points to Gabriele Meon-Tschuertz, Head of U.S. trade in the Department of European Integration and Foreign Trade at the Ministry of Economy. Meon-Tschuertz declined to give an official GOA reaction, saying the issue is an EU matter and the EU Commission will make an announcement after discussion with member states. Meon-Tschuertz did emphasize that her Ministry and most trade representatives in the EU were in favor of a solution based on increased access for non-hormone U.S. beef to EU markets. She predicted, however, that agriculture ministries in Austria and other EU member states would be resistant to any concession. ¶2. (U) Hochhauser claimed to have learned that USTR had originally targeted exports from the manufacturing and industry sectors, which would have hurt Austria more severely, but then "backpeddled at the last minute". As a result, the items subject to sanctions include Austrian chocolate, jams, and fruit juices. Hochhauser also charged that with the revised list "the permitted amount of sanctions has been clearly exceeded, according to the EU Commission." Austria's quasi-state Business Chamber expects the Commission to take legal action against the newly-imposed beef hormone sanctions at the WTO. ¶3. (U) Meon-Tschuertz noted that the Austrian Business Chamber (WKO) had requested (unspecified) support from the Ministry on the retaliatory beef hormone tariffs, adding that Austrian exporters particularly disliked the unpredictability of tariffs possibly changing every six months. ¶4. (U) In a press release, WKO General Secretary Anna Maria Hochhauser claimed that Austria's exporters "have gotten off lightly," with an estimated affected export volume between USD 6.2 million (January - December 2007) and USD 6.6 million (January to October 2008, at the current exchange rate). NOTE: According to Embassy Agriculture Specialist's calculations, the value of U.S. imports from Austria affected by the sanctions total between USD 3.0 million to 3.3 million (source: Global Trade Atlas). END NOTE. KILNER