VZCZCXRO2842
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHC #1634/01 0301928
ZNR UUUUU ZZH
P R 301922Z JAN 07
FM SECSTATE WASHDC
TO RUEHRL/AMEMBASSY BERLIN PRIORITY 2796
INFO EU MEMBER STATES COLLECTIVE

UNCLAS SECTION 01 OF 02 STATE 011634 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ENRG EAIR ETRD PREL EUM GM
SUBJECT: U/S/ SHEERAN DISCUSSES PROPOSED TRANSATLANTIC 
ECONOMIC PARTNERSHIP WITH GERMAN ECONOMIC ADVISOR WEIDMANN 
 
 ¶1.  Summary.  In a January 17 meeting with Chancellery 
Senior Economic Advisor Weidmann, U/S Sheeran and EEB A/S 
Sullivan praised Chancellor Merkel,s commitment to 
strengthen the transatlantic relationship and said the USG is 
examining her Economic Partnership initiative for 
opportunities to enhance economic cooperation.  Weidmann said 
that Germany believes a clear commitment from the political 
leaders to specific regulatory goals is required to introduce 
a new level of ambition into the relationship.  A/S Sullivan 
told Weidmann that, with German leadership, a U.S.-EU air 
services agreement is within reach for this year's Summit. 
He also urged Germany to take the lead in achieving a Doha 
Round trade agreement.  End Summary. 
 
¶2.  Participants: 
 
      U.S.                                FRG 
      ----                                --- 
 
U/S Sheeran                   Jens Weidmann 
A/S Sullivan                        Andreas Nicolin, 
Benedict Wolf, E Staff              MFA Berlin 
Eric Luftman, EUR/ERA         Egon Kochanke, 
Thomas O'Keeffe, EUR/AGS            Econ MinCouns 
John Struble,                       Helge Hassold, Econoff 
      EEB (notetaker) 
 
¶3.  On January 17, Chancellor Merkel,s Economic Advisor Jens 
Weidmann called on Under Secretary for Economic and 
Agricultural Affairs Josette Sheeran and Assistant Secretary 
for Economic, Energy and Business Affairs Daniel S. Sullivan 
to outline the Chancellor's proposal for a new Transatlantic 
Economic Partnership (TEP).  Weidmann said he understood that 
there had been a White House meeting that same morning to 
discuss the TEP.  U/S Sheeran welcomed Dr. Weidmann, noting 
that this would be one of her last meetings in the USG before 
moving on to her new position as Executive Director of the 
World Food Program.  However, she has a keen interest in the 
issues and wanted to take this final opportunity to engage. 
 
Long-Term Transatlantic Project 
------------------------------- 
 
¶4.  Dr. Weidmann explained that Chancellor Merkel is 
personally engaged in improving U.S.-European relations 
during Germany,s EU Presidency.  She envisions the TEP as 
starting a long-term transatlantic project that can yield 
both economic and political benefits.  Only by working 
closely together can the United States and the EU maintain 
their competitiveness in the rapidly evolving world economy, 
he said.  There are many existing working-level initiatives. 
Now it is critical to involve political leaders to give these 
projects the support needed to achieve concrete results. 
 
¶5.  U/S Sheeran enthusiastically welcomed Chancellor 
Merkel,s leadership and commitment to the transatlantic 
partnership.  The USG views Germany,s EU Presidency as an 
invaluable opportunity to reenergize U.S.-EU economic 
cooperation.  In a global context, she said, it is clear that 
it is the United States and the EU that are the responsible 
stakeholders in the world economy, agreeing on far more than 
they disagree. 
 
¶6.  Regarding to the TEP, U/S Sheeran said the USG views the 
proposal as offering an opportunity to accomplish 
long-standing shared objectives.  The USG still is looking at 
the specific components of the proposal.  We face a tight 
deadline if it is to be endorsed at this year,s Summit in 
April.  Specific questions that must be addressed include: 
What deliverables are available for the Summit?  Are there 
initiatives that can be launched through the TEP?  And are 
there any current projects that are stagnant and should be 
dropped?  A/S Sullivan added that we must consider carefully 
where we want to go with U.S.-EU economic cooperation.  The 
USG views the TEP as an opportunity to begin a process that 
will continue beyond Germany,s EU Presidency. 
 
¶7.  Dr. Weidmann suggested that a bilateral working group be 
established, to identify both &low-hanging fruit8 among 
existing projects, as well as promising areas for future, 
long-term cooperation.  For example, he said that with new 
technologies developing, new areas, such as radio-frequency 
identification (RFID) technology and nanotechnology, are 
emerging that may soon require regulation.  The United States 
and the EU need to begin cooperating now, so that they do not 
find themselves with conflicting regulatory regimes in the 
 
STATE 00011634  002 OF 002 
 
 
future. 
 
Political Commitment Key to Regulatory Cooperation 
--------------------------------------------- ----- 
 
¶7.  Weidmann continued that the FRG seeks to introduce &a 
new level of ambition8 into transatlantic cooperation.  He 
stated that this requires a strong political commitment to 
regulatory cooperation from leaders in the form of a binding 
agreement.  As envisioned by the FRG, such an agreement would 
set specific targets and deadlines for regulators on both 
sides of the Atlantic to reduce diverging regulatory 
requirements. 
 
Estimating Costs of Regulatory Divergence 
----------------------------------------- 
 
¶8.  Weidmann, who holds a doctorate in economics, 
specifically proposed a project to estimate the economic 
costs of the regulatory differences across the Atlantic is 
needed to establish a baseline from which to set specific 
targets for reducing regulatory costs.  U/S Sheeran remarked 
that balancing the costs and benefits of specific regulations 
is crucial.  She suggested that as a concrete example of what 
regulatory cooperation can achieve, it would be useful to 
identify a single product and determine how much regulation 
adds to its total cost.  She also suggested involving third 
countries in the process.  Weidmann agreed that this might 
help deflect suspicions that the TEP is protectionist, while 
maintaining the norm-setting role of the U.S. and EU. 
 
¶9.  Weidmann emphasized the importance of gaining the support 
of legislators on both sides of the Atlantic in the 
undertaking.  He noted that in his meetings with 
Congressional leaders, these issues seemed abstract to them. 
U/S Sheeran agreed that arguments in terms of improved 
U.S.-EU cooperation have little resonance.  With the 
Congress, the issue must be framed in terms of the economic 
benefit for the United States.  This is the advantage of one 
concrete example, demonstrating the cost of unnecessary 
regulatory divergence. 
 
Biofuels 
-------- 
 
¶10.  U/S Sheeran suggested biofuels as another emerging 
technology where regulations had not yet been established, 
and where U.S.-EU regulatory cooperation could be very 
beneficial.  She noted in this context that Europeans divide 
economic and environmental aspects of issues differently than 
the U.S., while a unified approach would help mutual 
understanding. 
 
Aviation Services 
----------------- 
 
¶11.  A/S Sullivan reported that the round of talks on U.S.-EU 
Air Services the previous week had made significant progress. 
 Although much work remains to be done, an agreement can be 
reached in time for the Summit with German leadership. 
 
DDA 
--- 
 
¶12.  A/S Sullivan assured Weidmann that a successful outcome 
to the Doha Round trade negotiations remains a key priority 
at the highest levels of the USG.  Strong German leadership 
within the EU will be critical to achieving success. 
RICE