This record is a partial extract of the original cable. The full text of the original cable is not available.

131102Z Feb 06

UNCLAS SECTION 01 OF 02 PARIS 000897 
 
SIPDIS 
 
SENSITIVE 
 
STATE ALSO FOR E, EB, EB/TPP, EUR/ERA, AND EUR/WE 
COMMERCE FOR ITA 
STATE PLEASE PASS USTR 
GENEVA FOR USTR 
 
E.O. 12958: N/A 
TAGS: ETRD ECON FR WTRO
SUBJECT: FRENCH APPRECIATE USG OVERTURE ON WTO TRADE IN 
SERVICES 
 
 
¶1. (SBU) SUMMARY.  French services negotiators told USG 
negotiators they appreciated the visit by the USG's WTO 
services negotiators and told them that France shared the 
United States' high-level of ambition.  GOF officials told 
acting Assistant USTR Christine Bliss February 2 that they 
saw considerable convergence with U.S. positions on 
services, particularly financial, telecom, distribution, 
energy and environment and construction services.  They also 
expressed some concern that cooperation between the US and 
the EU could frighten key markets such as Brazil, India and 
the ASEAN countries into not making concessions. The French 
also appreciated the Usdel's insights on its discussions 
with the European Commission (EC) and indicated interest in 
further informal bilateral consultations regarding the EC's 
positions on services. 
 
¶2. (U) Acting USTR for Services Christine Bliss and Director 
for Services negotiations Christopher Melly briefed French 
officials February 1, accompanied by USEU's Christopher 
Wilson and Paris Emboff Adam Shub.  The French side was led 
by Vincent Guitton, head of the Investment, Services and IP, 
his deputy Aymeric Ducrocq, Helene Pelosse, Unit chief for 
trade at the Prime minister's office for the coordination of 
European Affairs (SGAE), and her staffers Cecile Mahe for 
services and Alain Le Dortz for financial services. 
 
EMERGING ECONOMIES ARE U.S. TARGET 
---------------------------------- 
¶3. (SBU) U.S. officials strongly rebutted the contention of 
the European Commission that the U.S. has lost ambition in 
the services component of the Doha negotiations.  They 
explained the high level of U.S. ambition for the services 
negotiations and outlined the sectors and markets that the 
U.S. saw as vital. These included financial services such as 
banking, securities, insurance services, telecom services 
(both basic and value-added), distribution, computer, 
energy, environmental, construction, engineering as well as 
some professional services (such as legal). AUSTR Bliss said 
that the U.S. target markets were the 13-14 key emerging 
economies such as Brazil, India, China, South Korea, the 
ASEAN nations (Thailand, Malaysia) Egypt, South Africa, 
Turkey, Argentina and Mexico. 
 
¶4. (U) On audiovisual services, Guitton told US officials 
that France and the EU had only defensive interests and " no 
margin of progress" .  Bliss told the GOF that U.S. 
negotiatiors understood the sensitivity of the issue.  She 
noted that on telecom services, there were nevertheless some 
content coverage issues that needed to be resolved. 
 
¶5.  (U) Guitton told us that France was pleased to hear that 
the U.S. interest in services was high.  He said France 
shared the U.S's high level of ambition for services and saw 
considerable "convergences" on both sectors and target 
countries. He said France considered financial services, 
telecom, distribution, environmental, tourism and 
construction services as its core interests. Energy services 
were somewhat problematic and express delivery services were 
more interesting on the postal side for them than on the 
delivery side. 
 
¶6.   (SBU) In the financial services sector, Guitton said 
that France sought the removal of the foreign equity caps. 
On insurance services, France has offensive interests in the 
U.S. market, including elimination of the obligation to 
collateralize exposure for reinsurance, and greater 
harmonization of state-level insurance regulation (although 
Guitton acknowledged that France understands U.S. 
limitations on the latter point). Bliss responded that such 
matters are not within the scope of the current negotiation 
as they concern the right to regulate.  On Mode 4 (movement 
of people), the Commission has both offensive and defensive 
interests, but greater flexibility on unskilled labor will 
be a political issue. In terms of key markets, the EC is 
looking at the U.S. in addition to the other emerging 
markets such as China, India.  In India, France wants to 
assure predictability and transparency.  Bliss stressed that 
while U.S. offensive market access interests were generally 
focused on advanced developing economies, the U.S. would 
also like to see improvements in access to the EU market in 
a number of areas including energy, professional, 
distribution and value-added telecommunications services. 
 
FRENCH HOPE TO CONTINUE INFORMAL CONTACTS 
----------------------------------------- 
¶7. (SBU) Guitton and his deputy Aymeric Ducrocq agreed that 
it would useful to continue to have informal contacts but 
worried that the US and the EU working together might 
frighten off key developing countries.  The two sides 
reviewed events at the recent Hong Kong ministerial 
regarding services.  Ducrocq and Guitton indicated that the 
Commission's actions were not always clear to them either. 
 
¶8. (SBU) The two sides also exchanged views on procedural 
and tactical issues surrounding the services negotiations. 
Guitton asserted that France and the EC felt that the U.S. 
did not adequately support the EC's pre-Hong Kong concept of 
numerical targets for measuring progress in the services 
negotiations. Bliss responded that the U.S. was convinced 
that this concept threatened to "explode" the negotiations 
by alienating large numbers of developing country WTO 
members.  With respect to the post-Hong Kong effort to 
produce plurilateral market access requests in specific 
sectors, Guitton offered the French view that it would be 
important to concentrate this exercise on a relatively 
limited number of priority sectors so as not to overload the 
process "scare away" developing countries.  The U.S. 
negotiators broadly agreed with this point, but noted U.S. 
expectations that the plurilateral request exercise would 
still be the most effective approach. 
 
¶9. (U) This cable was cleared by USTR. 
STAPLETON