VZCZCXRO3567
PP RUEHDBU
DE RUEHRA #0566/01 1991438
ZNY CCCCC ZZH
P 181438Z JUL 06
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC PRIORITY 3161
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 RIGA 000566 
 
SIPDIS 
 
SIPDIS 
 
STOCKHOLM FOR FCS 
 
E.O. 12958: DECL: 07/18/2011 
TAGS: ECON ETRD PREL PINR OFPD RS LG
SUBJECT: AMBASSADOR'S MEETING WITH MINISTER OF ECONOMICS 
 
REF: A) RIGA 552 AND PREVIOUS B) RIGA 481 
 
RIGA 00000566  001.2 OF 002 
 
 
Classified By: Ambassador Catherine Todd Bailey.  Reason: 1.4 (D) 
 
¶1. (C) Summary:  In a July 17 meeting, Ambassador Bailey and 
Economics Minister Stokenbergs discussed outstanding trade 
issues Liepajas Metallurgs and Coca-Cola, building bilateral 
trade links, and Latvia's relations with Russia.  While we 
had little to offer on Liepajas Metallurgs, Stokenbergs was 
extremely constructive on Coca-Cola.  He thought that the 
health ministry was playing politics, and he agreed to meet 
with Coca-Cola reps and to join the Ambassador on a visit to 
the bottling plant.  Stokenbergs plans to follow up with 
participants in the May pan-Baltic trade and investment 
conference and would consider leading a trade mission to the 
U.S., perhaps in September.  Mortgage lending and alternative 
energy sources were two areas where he thought there would be 
good opportunities for U.S. business in Latvia.  Access to EU 
structural funds should also be a selling point, he argued. 
On Russia, the GOL is curious to see whether the recent 
progress in bilateral relations will continue now that the G8 
is over.  Stokenbergs is reported to be a bigger player in 
government than he appears, but it is still early for us to 
draw that conclusion.  End summary. 
 
¶2. (U) Ambassador Bailey met with Economics Minister Aigars 
Stokenbergs July 17.  Stokenbergs was joined by Deputy State 
Secretary Zaiga Liepina and a notetaker.  Pol/econ chief 
 
SIPDIS 
(notetaker) accompanied Ambassador. 
 
Trade Issues: Liepajas Metallurgs and Coca-Cola 
--------------------------------------------- --------------- 
¶3. (C) Stokenbergs opened by asking about the Department of 
Commerce's imposition of countervailing duties on imports of 
rebar from Liepajas Metallurgs.  He said that President 
Vike-Freiberga had asked him about this issue when they were 
in London last week and wanted to see if there had been any 
action since she raised it with Secretary Rice in early June. 
 Ambassador assured Stokenbergs that we were aware of the 
GOL's great interest in this issue, but that there was no 
immediate action planned.  P/E chief noted the results from 
the next administrative review would be announced in early 
August. 
 
¶4. (SBU) The Ambassador raised our continuing concern over 
proposed government regulations that could harm Coca-Cola's 
business in Latvia.  She stressed that Coke wants to be a 
good corporate citizen, but both Coke and we are having 
trouble getting through to the health minister on this issue. 
 Stokenbergs said that regulations should be based on facts, 
and restrictions on business only imposed to safeguard 
security.  That was not the case with Coca-Cola, in his view. 
 The minister pledged to talk to the health minister and said 
he would meet with Coke.  Stokenbergs then accepted the 
Ambassador's invitation to join her on a visit to the 
Coca-Cola bottling plant in early August. 
 
Bilateral trade and investment 
------------------------------------ 
¶5. (SBU) How could we follow up to the successful pan-Baltic 
trade and investment conference in May, the Ambassador asked. 
 How could we continue to work together to build business 
links between the U.S. and Latvia?  Would the minister 
consider leading a trade delegation to the U.S.?  Stokenbergs 
said he would task the Latvian Investment and Development 
Agency (LIDA) to prepare a report on what they were hearing 
from companies who attended the conference and analyze what 
investment possibilities existed.  He cited the energy 
sector, especially in alternatives to fossil fuels, as one 
where he thought there was great potential for U.S. - Latvian 
business ties.  Stokenbergs said he would consider leading a 
trade mission in September, but did not commit.  The 
Ambassador noted that she would be in the U.S. at the 
beginning of September and willing to help with a mission if 
she could.  Stokenbergs stressed that a major selling point 
for U.S. businesses to come to Latvia should be their ability 
to apply for some of the large amount of EU structural funds 
that would be available for projects in Latvia over the next 
six years.  He also highlighted the difficulties LIDA 
personnel assigned to the Latvian Embassy in Washington were 
having with accreditation as an impediment to their 
commercial efforts.  The Ambassador acknowledged the problem, 
and expressed hope that meetings with protocol this week 
could address that issue. 
 
¶6. (SBU) While in London, Stokenbergs said that he met with 
representatives of Citibank, and was encouraged by the 
meeting.  He is eager to avoid German and Swedish domination 
of Latvia's fast-growing mortgage lending sector and would 
like to see Citibank and other U.S. financial institutions 
 
RIGA 00000566  002.2 OF 002 
 
 
focus in particular on that area.  Stokenbergs was pleased 
with the language in our recent statements on the Latvian 
banking sector, saying they helped Latvia's efforts to 
develop into a regional financial center.  The Ambassador 
recalled President Vike-Freiberga's desire to host a regional 
forum of the World Economic Forum in Riga and the minister 
said he would follow up with the President's office on this 
idea. 
 
Latvian-Russian relations 
------------------------------ 
¶7. (C) The Ambassador asked about recent press reports that 
Stokenbergs might travel to Moscow to sign some bilateral 
economic cooperation agreements.  The minister said that the 
two sides had agreed in principle at expert level to 
agreements on economic cooperation and on establishing the 
long-stalled intergovernmental commission.  There was also a 
treaty on double taxation that has been waiting for signature 
since 2000.  Although there would be a delegation of Latvian 
businessmen going to Moscow July 19 - 21, Stokenbergs said 
the GOL had decided he should not go at this time as 
suggested by his Russian counterpart, economic minister Gref. 
 Instead, Stokenbergs would go when all three documents were 
ready for signature, which he hoped would be in early 
September.  The GOL, he acknowledged, wanted to see whether 
recent improvements in the bilateral relationship would last 
past the G8. 
 
¶8. (C) Comment: Stokenbergs' initial months as economics 
minister were not marked by much dynamism, but he is becoming 
more active and visible as he settles into the job.  However, 
he lacks the business-friendly personal style of his 
predecessor, Kristianis Karins.  A local journalist recently 
told us that, based on his previous role as economic advisor 
to PM Kalvitis, Stokenbergs is more powerful than he appears, 
but he does all of his work behind the scenes.  That may be 
true, but we have yet to see that on any of our issues.  A 
possible trade mission to the U.S. and assistance with 
Coca-Cola's case will provide good opportunities for us to 
better understand just where he fits in the government and 
party hierarchy.  End comment. 
Bailey