VZCZCXYZ0000
OO RUEHWEB

DE RUCNDT #1770 2512114
ZNR UUUUU ZZH
O 082114Z SEP 06
FM USMISSION USUN NEW YORK
TO SECSTATE WASHDC IMMEDIATE 0151

UNCLAS USUN NEW YORK 001770 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: AORC KUNR UNGA
SUBJECT: UN SCALE OF ASSESSMENT: JAPAN AND US SHARE VIEWS 
ON SCALE OF ASSESSMENT REGARDING CHINA, THE BASE PERIOD, 
AND THE CEILING RATE 
 
¶1.  On September 8, Japanese Amb. Toshiro Ozawa demarched 
Amb. Wallace on the UN scale of assessment for the period 
2007-2009, raising two specific areas of interest: 1) China's 
role in scale of assessment and 2) the debate over the length 
of the base period to be used in the methodology. 
 
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Increasing China's assessment rate 
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¶2.  Amb. Ozawa relayed information he had received regarding 
SYG Annan's recent trip to Beijing, asking Amb. Wallace to 
confirm his information with the Secretariat (note: Amb. 
Wallace is arranging a meeting with Assistant SYG Bob Orr to 
confirm the Japanese accounts).  According to Ozawa, Annan 
raised the issue of China's assessment rate during the first 
30 minutes of their recent bilateral, noting in particular 
China's increased engagement in UN activities.  Although 
Annan did not refer to a specific level of an increase, 
President Hu was apparently taken aback by having this issue 
raised, and deferred the issue to his State Counselor.  While 
the Chinese were marginally more flexible than the Russians 
during the GA's consideration of the scale methodology last 
March in which Japan argued to send its proposal of a P5 
floor to the Committee on Contributions for consideration, 
the Chinese will not agree to any proposal to increase their 
assessment rates if it appears to be the result of Japanese 
pressure. 
 
¶3.  After recalling that the U.S. had proposed a P5 floor for 
the regular budget scale in both 1997 and 2000, Amb. Ozawa 
stressed the need to create a strategy to approach the 
Chinese on this issue.  To this end, Amb. Ozawa met with UK 
Deputy Permanent Representative Karen Pierce on the issue and 
is planning to meet next with the French.  Pierce was in 
support of a dialogue between the U.S., UK, France and China. 
 However, it is Japan's view that the UK and France would be 
best positioned to initially approach the Chinese on the 
possibility of increasing its assessment rate, with the U.S. 
being brought in to the discussion at a later stage. 
Ultimately, Amb. Ozawa hopes to convene a meeting between the 
Japanese, French, UK, and U.S. to craft a strategy.  Amb. 
Wallace agreed with this approach, noting the need to proceed 
carefully to prevent the external appearance of a Japanese, 
French, UK, and U.S. collective plan on the scale. 
 
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Keeping the base period short 
----------------------------- 
 
¶4.  Amb. Ozawa emphasized Japan's opposition to lengthening 
the base period to 6 years (which is expected to be at the 
core of the EU group position on the scale methodology). 
Ozawa noted that the historical trend has been to shorten the 
length of the base period, and that generally speaking a 
shorter base period is advantageous to OECD countries, which 
usually have slower rates of economic growth than developing 
countries.  He stated that Japan will strongly push for a 3 
year base period, and it believes that some G-77 countries 
will do the same.  In his meeting with Pierce, Ozawa appealed 
that the EU not take such a myopic approach on the length of 
the base period.  Ozawa is concerned that if the Japanese and 
EU openly disagree on the base period it will create an 
opportunity for the G-77 to exploit the differences between 
the major financial contributors, and he appealed to Amb. 
Wallace for U.S. assistance in resolving this matter.  Amb. 
Wallace assured Ozawa that the U.S. also believes a shorter 
base period is preferable. 
 
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Keeping the ceiling at 22 per cent 
---------------------------------- 
 
¶4. Amb. Wallace concluded the meeting by underscoring the 
strong U.S. view that the ceiling must not be raised above 
its current 22 percent cap.  Amb. Ozawa responded that the 
ceiling was not specifically mentioned in the Japanese 
proposal but was factored in at its current level.  However, 
it would be difficult for Japan to take a public position in 
support of the ceiling given its proposal to reduce Japan's 
current assessment rate.  Nevertheless, in answer to Amb. 
Wallace's appeal for support on maintaining the level, Amb. 
Ozawa said Japan would provide tacit and private support to 
the USG position as negotiations occur. Ozawa also conveyed 
his belief that the EU would not seriously challenge the 
ceiling level and is much more intent on lengthening the base 
period. 
 
BOLTON