VZCZCXRO2928
PP RUEHAG RUEHDF RUEHIK RUEHLZ
DE RUEHTC #1723/01 2191623
ZNR UUUUU ZZH
P 071623Z AUG 06
FM AMEMBASSY THE HAGUE
TO RUEHC/SECSTATE WASHDC PRIORITY 6493
INFO RUCPDOC/USDOC WASHDC
RUEHRC/USDA FAS WASHDC 1125
RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS SECTION 01 OF 02 THE HAGUE 001723 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EB/TPP/BTA, EUR/UBI, EUR/ERA 
STATE PLEASE PASS TO USTR 
USDA/FAS (ROBERTS, YOUNG) 
USEU FOR CWILSON 
GENEVA FOR USTR 
 
E.O. 12958: N/A 
TAGS: WTRO EAGR ETRD EU NL
 
SUBJECT:  NETHERLANDS/WTO:  WE MUST SALVAGE WHAT WE CAN 
 
Ref A)  The Hague 1560, B)  The Hague 1433 
 
¶1. (SBU) Summary. Dutch Trade Minister van Gennip publicly 
blames the U.S. for the suspension of the Doha negotiations, 
but contacts at the ministries of Economic and Foreign 
Affairs stressed the need to avoid the blame game and 
restart talks. The Dutch see an agreement as critical to 
their international trade interests and seek specific 
information on USG expectations of the EU and the cuts in 
USG agricultural subsidies. End Summary. 
 
----------------------------- 
Dutch Still Committed to Doha 
----------------------------- 
 
¶2. (U) In a July 26 public reaction to the suspension of 
trade talks, Foreign Trade Minister Karien van Gennip 
stressed her continued commitment to achieving a successful 
agreement.  Highlighting the interests of Dutch exporters, 
consumers, and businesses, van Gennip called for a restart 
of the Doha process and announced her willingness to "fight" 
to keep the Doha Development Round alive.  With the 
Netherlands "at the heart of world trade," failure to reach 
agreement could cost the country one percent of GDP -- about 
500 billion euros ($640 billion).  Given the export-oriented 
nature of its economy and the agriculture sector 
specifically, she said the Dutch clearly would benefit from 
more open borders. The French were also very aware of the 
cost of failure, she added. 
 
¶3. (U) While concerned that "poor countries have a far 
weaker position in bilateral talks," van Gennip did not rule 
out the possibility of new bilateral or regional agreements 
in accordance with WTO rules.  She said the EU would not 
demand more from its trading partners under such agreements 
than it would have secured through a multilateral accord 
within the WTO. 
 
-------------------------------------- 
Publicly -- U.S. to Blame for Failure 
-------------------------------------- 
 
¶4. (U) Van Gennip went on to blame the failed talks on U.S. 
"unwillingness to look for agreement," a view voiced earlier 
in her July 7 letter to parliament (ref A).  Recalling a May 
2006 visit to the U.S., she said her American counterparts 
believed "they had done their part," and this attitude 
remained unchanged even after July G8 meetings in Russia. 
While WTO negotiators had engaged in 'what if' talks in 
Geneva, the U.S. had refused to participate, she said. 
President Bush "says one thing," she added, but "something 
else emerges at the negotiating table." 
 
¶5. (U) Van Gennip argued the U.S. does not believe the WTO 
produces sufficient results and instead favors bilateral 
agreements, in which it can wield greater power. The U.S. 
Congress opposes changes to the current U.S. agricultural 
policy, she added, including the Farm Bill with subsidies 
worth billions to U.S. farmers. 
 
--------------------------------------------- --------- 
Privately -- Time to Move On and Avoid Finger Pointing 
--------------------------------------------- --------- 
 
¶6. (U) AgCounselor and Econoffs met July 31 to discuss van 
Gennip's statement and the recent suspension of Doha talks 
with Ministry of Economic Affairs (MEA) officials Tjerk 
Opmeer, Senior Trade Policy Advisor and main Dutch 
representative to the EU 133 Trade Committee, and Maaike 
Hoffman, Senior Policy Advisor, as well as Ministry of 
Foreign Affairs officials Pauline Diepenbroek, Senior Policy 
Officer, and Niels van der Bijl, Policy Officer. 
 
¶7. (SBU) Econoff stressed USG continued commitment to Doha 
and USTR Schwab's ongoing outreach to identify prospects for 
renewed talks. Opmeer said the Dutch also sought ways to 
restart negotiations. He argued there was still "enough 
there for something ambitious," and "too much work" had been 
done to fail now. Despite van Gennip's statements to the 
contrary, Opmeer stressed that both sides should "avoid the 
blame game." 
 
¶8. (SBU) Opmeer said that EC Trade Commissioner Peter 
Mandelson would be conducting his own outreach. In early 
 
THE HAGUE 00001723  002 OF 002 
 
 
September, EU members would discuss possibilities for a Doha 
revival within the 133 Committee.  Opmeer said he would be 
drafting another letter from van Gennip to the Dutch 
parliament expressing GONL disappointment with the Doha 
talks and its desire to restart negotiations "as soon as 
possible."  In an earlier meeting, senior MEA officials had 
indicated that the Dutch would pursue bilateral agreements 
if the current talks failed (ref B). 
 
¶9. (SBU) The Dutch saw moving forward on "elements where we 
can agree" as another avenue to restart negotiations, Opmeer 
added.  He said the Dutch do not believe that such an 
approach would undermine attainment of a complete Doha 
package, as WTO Director Pascal Lamy has asserted. 
 
----------------------------------------- 
Dutch Seek Specifics on U.S. Expectations 
----------------------------------------- 
 
¶10. (SBU) On agriculture market access, Opmeer said the EU 
saw adjustments in its proposals from 39 percent to 48 
percent and then to 51 percent as significant compromises. 
Given internal EU politics, he said "getting to 66 percent 
would not be possible" and asked specifically for USG 
expectations. Opmeer added that the EU proposal included 
real cuts, as EU tariffs don't have any "water" in them 
(i.e., applied tariffs close or at the level of bound 
tariffs). 
 
¶11. (SBU) On agriculture subsidies, Opmeer questioned 
whether USG domestic support cuts would involve real program 
cuts, a question also raised in earlier meetings (ref A). 
The EU provided $22.7 billion in general agricultural 
support in 2005, he said.  This figure would drop to 9 
percent of current levels by 2013, he explained, almost 
eliminating amber box support and leaving only green box 
subsidies. AgCounselor and Econoff countered that under the 
U.S. proposal, U.S. support payments would drop considerably 
and would involve real cuts to programs. 
 
¶12. (SBU) AgCounselor stressed that more support from the EU 
would also help encourage other countries to improve their 
market access proposals and to promote a meaningful Doha 
outcome. Within the EU, it is the Dutch and Nordic countries 
that continue to press for an EU proposal that offers "real 
access," Opmeer noted. 
 
-------------------------------------- 
Comment: Helping the Dutch Help the US 
-------------------------------------- 
 
¶13. (SBU) The Netherlands is the world's third largest 
exporter of agricultural goods -- $64 billion in 2004. The 
Dutch therefore have a genuine interest in restarting the 
Doha round negotiations, reaching an agreement on 
agricultural goods (market access and domestic support) and 
further opening international trade markets. 
 
¶14. (SBU) These Dutch officials agreed that further 
information exchanges would benefit both sides. Sharing 
additional details with the Dutch on expected cuts in the 
USG agricultural subsidy proposal, products of interest, and 
USG expectations for the EU proposal would help the Dutch 
work from within the EU to restart talks and seek an EU 
offer with "real access."