US-EU CONSULTS: POST- LISBON EU FINDING ITS

C O N F I D E N T I A L SECTION 01 OF 04 UNVIE VIENNA 000021 SIPDIS DEPT FOR IO, ISN, EUR, IO/GS, IO/UNP, ISN/MNSA, IO/UNP, EUR/ERA E.O. 12958: DECL: 01/27/2020 TAGS: AORC PARM SNAR IAEA KNNP KTNBT UNCND EUN SUBJECT: US-EU CONSULTS: POST- LISBON EU FINDING ITS FOOTING IN VIENNA IOS Classified By: Ambassador Glyn Davies for reasons 1.4 b and d Summary -------------- ¶1. (SBU) The Spanish and EU Missions (Ambassadors Jose Luis Rosello Serra and Lars-Erik Lundin, respectively) co-hosted semiannual US-EU consultations on issues related to Vienna-based international organizations January 22; these were the first bilateral consultations held by the amalgamated EU/Spanish Presidency in Vienna. Much of the discussion focused on transitional arrangements under the Spanish Presidency for EU representation in Vienna organizations pursuant to entry into force of the Lisbon Treaty. While the Spanish Presidency will retain overall responsibility for external messaging, the EU Mission will co-chair all meetings and EU Mission officers are "twinned" with Spanish counterparts. During this transition, the EU is seeking to sort out its observer status at the IAEA and CTBTO and to coordinate with New York and Geneva as to representation at UN agencies and bodies. At the IAEA as elsewhere this presents some institutional and practical difficulties. The EU circulated a note to all members on the transitional arrangements and is under instructions to operate on this basis until July 1. Beyond that date the EU Mission is uninstructed, including with respect to the Belgian Presidency in the second half of 2010, but projects to add another Ambassador and 15 Vienna diplomats over time. ¶2. (C) On IAEA issues, the EU continues to be solid with respect to Iran, and Spain shared our expectation (following an IAEA DG meeting with FM Moratinos) that Director General Amano will be factual in his assessment of safeguards implementation in Iran. The EU and Spanish reps were much less conversant on the Syria nuclear file in response to U.S. concerns about "drift" on this issue. They were supportive of a proposed June timetable for Board of Governors' consideration of the IAEA fuel reserve but cautioned that Amano may be reluctant to push the issue; the UK is also looking to table its assurance of supply proposal at the March Board. While the EU has no coordinated position on the IAEA budget, they anticipated a substantial contribution to the Safeguards Analytical Lab (SAL). The EU and Spanish reps also shared our priorities on the Nuclear Security Summit. However, they expressed pessimism as to the prospectsfor a successful NPT Revcon absent resolution of the Middle East / Israel conundrum, and feared that this issue could lay bare internal EU divisions. ¶3. (SBU) The EU and Spanish reps expressed appreciation for U.S. activism at the CTBT Prepcom and proposed coordination of contributions to CTBTO. The EU expects the G-77 will be aggressive at the June Prepcom on adoption of amendments to the Rules of Procedure. The U.S. signaled that agreement on the thorny issue of Palestinian Observership may be possible. Responding favorably to our preview of Afghanistan and Pakistan Regional Stabilization Strategy, the EU and Spanish reps stressed the need for it to consider drugs and crime strategically, particularly in the transnational and transregional context. The EU reported that it supported UNODC's Terrorism Prevention Branch (TPB) programs, and announced it would be dedicating more funding, in general, to counterterrorism programs, in Pakistan and Yemen. On finance and governance, the EU promoted the need for the Independent Evaluation Unit and whether to upgrade UNODC in the UN system. The EU and Spanish representatives agreed with the need to work closely together to avoid the appearance of divisiveness on drug and crime issues, particularly at the Crime and Narcotics Commissions meetings. The EU noted its participation in the Vienna "Energy Club" and UNIDO's overall role in energy issues. The U.S. and EU/Spanish reps agreed to continue close consultations in advance of upcoming meetings at Vienna organizations.End Summary. Managing the Lisbon Transition -------------- ¶4. (SBU) Noting this was their first joint consultation, EU Ambassador Lars-Erik Lundin and Spanish Ambassador Jose Luis Rosello Serra, flanked by their respective staffs, walked us through the transitional arrangements for EU representation in Vienna pursuant to Lisbon Treaty implementation (The EU delegation also circulated a nonpaper to EU members on the arrangements agreed with the Spanish Presidency). While for the time being the Spanish Presidency would remain responsible for EU representation and coordination in Vienna, UNVIE VIEN 00000021 002 OF 004 the EU and Spanish Ambassadors would co-chair all meetings and integrate/"twin" their staffs, e.g. the EU DCM would shadow the Spanish DCM. The intent, Serra explained, is to prepare the EU Mission for the eventuality of "flying solo" once the rotational EU Presidency is phased out in accordance with the Lisbon Treaty. Lundin expected that this eventuality would require the addition of a second EU Ambassador, splitting the UN affairs and nonproliferation portfolios, and a substantial augmentation of the EU Mission staff to about 15 diplomats. The EU Mission will take instruction from both the EU High Representative and the Commission, he noted, for example on energy/nuclear issues. Putting a team in place (i.e. recruitment) and raising the profile of the EU Mission in Vienna were priorities for the transition. In a further illustration of the EU and Presidency division of labor, the nonpaper also proposes "special effort" to increase the external visibility of the EU delegation by hosting meetings with the heads of international organizations while leaving the Spanish Presidency in charge of political dialogue and outreach. ¶5. (C) Ambassador Davies questioned the practical effect on U.S.-EU coordination of the "twinned" EU-Spanish Presidency, citing the positive example of his own close coordination with Swedish Ambassador Lundberg on Middle East issues at the 2009 IAEA General Conference during the Swedish Presidency -- in practice, who would will our interlocutor now be? Serra acknowledged how Lundberg had leveraged U.S.-EU coordination to derive a common position among EU members on Middle East issues during the GC. He noted that the U.S. position counted more than that of Brussels in this regard, and anticipated that he would do the same when presiding, i.e. use the U.S. position or strategy on an issue to settle internal EU disagreements (Comment: During the last GC, Spain was one of the EU countries seeking accommodation of Arab group positions but the Spanish Mission in Vienna has toughened on these issues in recent months. End comment). During the Spanish Presidency, Serra pledged that the EU delegation and Presidency would seek to appear "as one" but by the time of the General Conference, the EU delegation should be "in command." He added that Spain was conducting outreach on Middle East issues with Egyptian Ambassador Fawzi. Landin said he would ask Brussels for guidance on the question. Ambassador Davies underlined the importance of the U.S.-EU relationship and looked forward to continued coordination in IAEA fora and the NPT Revcon. Challenges Ahead -------------- ¶6. (C) The EU Mission had no instructions as to what would happen at the conclusion of the Spanish Presidency June 30. Landin underscored that the EU would not "take any risks" in its institutional transition, including with respect to the incoming Presidency, and fully expected the Belgian Presidency to be helpful with respect to Lisbon Treaty implementation. (Comment: Separately, the Belgians have approached the UN Affairs Section at the Mission for consultations and expect to be an "activist" Presidency, somewhat contradicting the impression Landin gave at the lunch. End Comment.) ¶7. (SBU) Sorting out EU representation in UN and other international organizations posed a real challenge, Serra advised, requiring a re-examination of by-laws. The transition nonpaper specifies that priority should be given to the IAEA, where Euratom (represented by the EU delegation) has observer status, and CTBT where the EU lacks any observer status, and notes that EU representation at other UN bodies and specialized agencies must be coordinated with New York and Geneva. Serra cited the example of the IAEA Board of Governors where the EU Presidency currently delivers the EU statement at the opening of the Board debate on a particular agenda item. For the time being, Spain would retain the coordination role on EU Board statements (e.g. on Iran, Syria etc.) but with the EU delegation as very much part of the "team." It was not clear, however, what would happen in the future when the "EU speaks" since the EU cannot be a member state of the IAEA Board -- would the EU take the floor as a non-Board member under Rule 50 at the end of the debate?, he mused. (Note: When non-Board member states have held the EU Presidency, they delivered the EU statement at the opening of the debate along with G-77, NAM and regional groups. End note.) IAEA and NPT Issues UNVIE VIEN 00000021 003 OF 004 -------------- ¶8. (SBU) Looking ahead at the next six months, IAEA Counselor presented U.S. priorities at the IAEA (March and June Board meetings) as well as the Nuclear Security Summit and NPT Revcon. The EU and Spanish reps expected broad convergence of U.S. and EU positions at the IAEA. With respect to the budget, there would not be a common EU position but the EU was preparing to make a "substantial" contribution to help fund the modernization of the Safeguards Analytical Laboratory (SAL) and shared the U.S. view of this as a priority. Landin asked whether an additional U.S. contribution to SAL was forthcoming. Among the other "headline" issues, Serra reported a recent EU demarche on DG Amano on assurance of nuclear fuel supply. The EU had advocated that there not be a Board working group this issue so as to not give the G-77 the opportunity to block it. Serra cautioned that Amano seemed "very reluctant" to take the first step on assured supply/fuel banks and was inclined to leave this issue to Member States and the Board Chair to sort out. "We are not in safe waters," Serra concluded given the lack of consensus on the Board and noted the need for outreach. He also confirmed that the UK expected to put its Nuclear Fuel Assurance proposal forward for consideration at the March Board. Ambassador Davies took issue with the time horizon DG Amano had in mind with respect to Board approval of the IAEA fuel bank, considering that November to be too far away. The EU and Spanish reps agreed with the June Board timeframe proposed by the U.S. and while they hoped for less confrontation on this issue, did not believe consensus approval of the IAEA fuel bank was possible. They also noted that the Secretariat was thinking in terms of a discussion of the IAEA fuel bank in June followed by Board action in September. Ambassador Davies solicited EU help in cleaving off key G-77 states to increase support for the fuel bank. ¶9. (C) On Iran, the EU and Spanish reps underlined that the EU was united and saw sanctions as inevitable. They awaited Amano's first DG report on Iran. Serra reported that Amano in an introductory call by Spanish FM Moratinos was factual in his presentation of the Iran dossier but also very cautious. Amano apparently told Moratinos that there had been no formal reply by Iran on the Tehran Research Reactor (TRR) deal when the media was reporting otherwise. Neither the EU nor Spanish participants would be drawn out on Syria even as IAEA Counselor warned that allowing the Syrian issue to "drift" would undermine IAEA safeguards authorities. In contrast, they fully shared our focus on nuclear security and looked forward to the April Summit. The Spanish indicated that EU coordination for the NPT Revcon would be the responsibility of the Presidency. Both the EU and Spanish reps were fairly pessimistic about the Revcon, Landin assessing that the outcome would be "not too bad" or "very bad" absent resolution of the Middle East issue. Mission representatives underscored the need to address both sides of the NPT bargain. EU and Spanish representsatives shared the view that while the U.S. had a good story to tell on peaceful use and disarmament, the Middle East issue could tip the balance at the Revcon. They regretted that the Middle East debate had contaminated everything else and feared that this issue could expose EU internal differences. CTBT -------------- ¶10. (SBU) On CTBT, the EU might seek formal observer status at the June Prepcom. The EU and Spanish reps appreciated U.S. activism at the Prepcom and proposed coordination of our possible extrabudgetary contributions. They expected the G-77 will aggressively push their amendments to the Rules of Procedure at the Prepcom. Arms Control Counselor indicated that agreement on Observership for the Palestinian Authority is possible, though we had reservations on the amendments pertaining to NGOs and non-signatory states. More broadly, the EU and Spanish reps understood that the U.S. cannot move forward on CTBT ratification unless certain of success, and would continue to hold the line with the G-77 in the interim. UN Organizations -------------- ¶11. (SBU) Turning to UN organizations, we previewed the just-released Afghanistan and Pakistan Regional Stabilization Strategy and stressed the need to develop synergy among the various UN organizations in Vienna, focusing on drugs, crime, corruption, border security, trafficking, and terrorism. The UNVIE VIEN 00000021 004 OF 004 EU and Spanish representatives welcomed copies of the counternarcotics portion of the strategy, stressing that the EU wanted to take a strategic outlook in Vienna. The Spanish representative also noted the nexus between UNODC and the OSCE on border management issues and reported that the UNODC would participate in the European security dialogue summit on transnational threats. With regard to UNODC's counterterrorism programs, the EU agreed that UNODC's Terrorism Prevention Branch provided solid assistance. Agreeing that TPB had real value-added with regard to the promotion of international nuclear terrorism conventions, the Spanish representative offered to organize a U.S.-EU meeting with TPB head Ruthstrom-Ruin. The EU also reported that it would be providing 15 million euros for legal capacity building in Pakistan. ¶12. (SBU) The EU and Spanish representatives agreed that efficient finance and governance within UNODC was critical to ensure its continued effectiveness. The EU representative stressed the importance of ensuring the Independent Evaluation Unit becomes fully operational as soon as possible, and the Spanish representative noted the need to consider "upgrading" UNODC in the UN system. We stressed the importance of working together in the UNODC context and offered to host regular working-level Major Donors' meetings in order to ensure that we, the EU, and other Major Donor countries were communicating well and regularly in order to minimize divisive public discussions. In this regard, we stressed the need to work together closely in the run-up to the March Commission on Narcotic Drugs (CND) in order to avoid the heated public disagreements of 2009. The EU and Spanish representatives welcomed these suggestions. ¶13. (SBU) With regard to UNIDO, the EU and Spanish representatives stressed the effectiveness of UNIDO head Yumkella and indicated its overall support for UNIDO programs. Ambassador Davies noted he had met with Yumkella and agreed with the EU's assessment of his abilities. Ambassador Davies added that we were in the process of learning more about UNIDO and its programs, but that any discussions of the U.S. rejoining UNIDO would be well into the future. The Spanish representative added that the EU was a participant in the Vienna "energy club," which included UNIDO, OSCE, OPEC, IAEA, IRENA, and IIASA (Note: Mission will provide further information on the club septel End note.) ¶14. (C) Comment: While the EU and Spanish reps put the best face on internal coordination under the Spanish Presidency, they spent more time explaining how this will all work than in discussion of substantive issues at Vienna organizations. During this time of transition, we expect the EU -Presidency dynamic to continue to unfold as the EU seeks greater institutional clarity vis-a-vis international organizations. With a strong Spanish Mission and with a less complicated Vienna meeting cycle in the first two quarters, the next six months should go smoothly. The second half of 2010 will be much more complicated as we head to the IAEA General Conference where will be looking again for European leadership to help manage the contentious Middle East issues. DAVIES