Cablegate: Germans Pleased with Tec Progress; Identify Priorities For

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PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHRL #2207/01 3510629
ZNR UUUUU ZZH
P 170629Z DEC 07
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC PRIORITY 0029
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCNMEM/EU MEMBER STATES
RUCNFRG/FRG COLLECTIVE

UNCLAS SECTION 01 OF 02 BERLIN 002207

SIPDIS

SIPDIS

SENSITIVE BUT UNCLASSIFIED

E.O. 12356: N/A
TAGS: ETRD EFIN EINV ECIN PREL PGOV EU GM
SUBJECT: GERMANS PLEASED WITH TEC PROGRESS; IDENTIFY PRIORITIES FOR
NEXT MEETING

1. (SBU) SUMMARY: German government officials and industry
associations are upbeat about the results achieved at the first
Transatlantic Economic Council (TEC) meeting on November 9 in
Washington. Government officials also expect renewed focus on TEC
during the Slovenian EU Presidency. German industry identified
patent legislation, auto safety regulations and biofuels standards
as its top priorities for the next TEC review in 2008. Right now,
there is little desire to include new areas in the process.
Industry and government representatives are seeking reassurance on
the change of U.S. leadership of the Council. A main objective for
the Germans is to get the legislative branches on both sides of the
Atlantic more engaged. END SUMMARY.

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REFLECTIONS ON TEC PROGRESS
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2. (SBU) The German business community is generally satisfied with
the progress made since the inception of the Transatlantic Economic
Council at the US-EU Summit in April. "The Transatlantic Council
has made breakthrough decisions at its first meeting in Washington,"
said J|rgen Thumann, President of the German Federation of
Industries (BDI) and Chairman-designate of the Transatlantic
Business Dialogue. "Very soon businesses and consumers will benefit
from a more integrated transatlantic market." Thumann was upset at
the U.S. Chamber of Commerce's lukewarm evaluation of TEC's progress
because he felt TEC had made significant progress. However, BDI
later told EMIN that the U.S. Chamber of Commerce and BDI continue
to cooperate well on TEC matters. (Note: The Ambassador reported
TEC's progress to senior executives of BDI's member companies on
November 26. End note.)

3. (SBU) Sectoral associations echoed BDI's praise. Even skeptics
like the German Chemical Industry Association (VCI) said that TEC
had outlasted previous attempts at closer transatlantic regulatory
cooperation and set up dialogues to prevent new regulatory barriers.
"The administrations on both sides of the Atlantic have committed
to regulatory cooperation, and it is no longer [just] the
stakeholders who call upon the administrations to act," Prof.
Reinhold Quick, VCI's lobbyist in Brussels, wrote for a BDI
publication.

4. (U) Among the TEC deliverables, U.S. acceptance of European
firms' International Financial Reporting Standards (IFRS) statements
stood out for special praise. IBM supported U.S. recognition of
IFRS because it hopes the EU will make a reciprocal measure
permanent by August 2008. Similarly, the Germany Savings Bank
Association said its members will benefit from mutual recognition.

5. (SBU) German interlocutors remain concerned about supply chain
security potentially hampering trade. BDI's Heiko Willems said the
announcement of a road map to mutual recognition of trusted partner
programs was promising, but he was disappointed it had not been made
public. Weert Boerner, North American Desk Officer at the Ministry
of Foreign Affairs, said German officials do not expect Congress to
reverse its 100 percent scanning requirement. However, Boerner said
they are debating whether to seek input into the Secure Freight
Initiative pilot projects through the TEC to ensure credible
findings on implementation and feasibility. In an apparent shift in
tone, MFA Director General for Economic Affairs Ruediger von Fritsch
also told EMIN that Germany and other EU Member States will not
reject implementation of the requirement but rather will only insist
on their involvement in implementation plans. These countries
believe they can add value to the discussion and that a
one-size-fits-all approach will not work for all ports.

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FUTURE INDUSTRY PRIORITIES
--------------------------

6. (U) German industry's strategy now is to conclude negotiations in
the priority areas ("Lighthouse Projects") identified in the
Framework Agreement. BDI representatives told EMIN that patent
legislation is their top priority, followed by auto safety and
biofuels standards desired by the German auto manufacturers. BDI
believes TEC should focus only on key Framework priorities as new
issues (e.g. poultry) could overburden its already booked agenda.
"Once we have moved forward on the lighthouse projects, we can add
new areas," explained Sigrid Zirbel, BDI's Director for the
Americas.

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CHANGE IN LEADERSHIP
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7. (SBU) The departure of Al Hubbard as Director of the National
Economic Council and U.S. co-chair of TEC created nervousness among

BERLIN 00002207 002 OF 002

German business representatives and some in the policy community
about continued U.S. commitment to TEC. On November 29 Ambassador
Timken assured a forum of CDU/CS parliamentarians, journalists and
industry reprsentatives that the U.S.' commitment to TEC remain
strong. German interlocutors were concerned tht Hubbard's
replacement might not enjoy the sameaccess to President Bush,
equivalent rank within he White House, or sufficient clout to
engage Cainet secretaries. Some of this concern has beenalleviated by Embassy
outreach after the announcemnt that Deputy
National Security Daniel Price wil be U.S. co-chair. Boerner said
Ministry of Foreign Affairs officials are familiar with Price and
are receptive to his appointment.

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LEGISLATIVE ENGAGEMENT
----------------------

8. (SBU) Policymakers and industry representatives increasingly
call for greater legislative involvement to drive the process
forward. Industry representatives and foreign affairs observers say
prior attempts to remove non-tariff barriers fell apart due to the
lack of legislative support and question how best to engage Congress
in light of the upcoming elections in 2008. BDI is organizing its
annual US-German Business Roundtable in Dresden in February 2008 and
has invited the Ambassador as well as a number of Members of
Congress to discuss the Transatlantic Economic Council. The high
turnout for the Ambassador's address to the CDU/CSU Bundestag Caucus
reflected the prominence of the issue in Chancellor Merkel's party.

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ROLE OF EU PRESIDENCY
---------------------

9. (SBU) German stakeholders have mixed views on the importance of
the EU presidency for TEC. BDI told EMIN that the presidency is now
less important to the process and that the organization trusts
European Commissioner Guenther Verheugen's political instincts to
drive progress. Boerner said German officials were disappointed
with the Portuguese presidency's lack of leadership on TEC, but they
are optimistic that the Slovenian EU presidency will renew focus on
the initiative. Despite Slovenia's size and smaller resources,
Boerner noted that it began preparing for its presidency up to two
years in advance. Germany allowed Slovenian counterparts to observe
much of its deliberations as EU President so it could learn the
mechanics of the role and develop a network of German counterparts
to accelerate progress. Boerner expects Slovenia's time at the helm
to benefit TEC because an EU President determines which initiatives
become part of the political agenda and control the channels into
Brussels required to resolve issues quickly. Andreas Nicolin, Head
of the Chancellery's Foreign Trade Policy Division, told EMIN that
Germany is already reaching out to France to ensure TEC remains a
high priority during its EU presidency.

Timken Jr

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