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DE RUEHHE #0088 0401324
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R 091324Z FEB 07
FM AMEMBASSY HELSINKI
TO RUEHC/SECSTATE WASHDC 2957
INFO RUCNMEU/EU INTEREST COLLECTIVE

C O N F I D E N T I A L HELSINKI 000088 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 02/09/2017 
TAGS: ECON ETRD EUN WTRO
SUBJECT: FINLAND'S RESPONSE TO WTO DEMARCHE:  COMMISSION 
SHOULD NOT EXCEED ITS MANDATE 
 
REF: SECSTATE 15811 
 
Classified By: ECON SECTION CHIEF JANE MESSENGER FOR REASONS 1.4 B AND 
¶D. 
 
(C)  Despite its high-tech, export-oriented economy, Finland 
is a cautious voice in the EU on agricultural concessions in 
the Doha Development Agenda (DDA) for reasons of history, 
economics and politics and is unlikely to support the 
Commission going beyond the limits of its current mandate, 
although it may be prepared to support going to the outer 
limits of that mandate.  Econoff delivered reftel points 
February 9 to Matti Lassila, Director of the Unit for the 
EC's Common Commercial Policy at the Finnish Ministry of 
Foreign Affairs, who commented that he expected upcoming 
discussions on the DDA at the EU Trade Ministers dinner and 
the GAERC to be general in nature with no formal decisions 
taken.  Finland welcomes the renewed momentum on Doha, but is 
clearly in the G-14 camp and will be looking carefully at how 
its "sensitive" products would be handled.  With pressure 
coming from Finland's agricultural sector which has seen its 
subsidies cut in half since Finland joined the EU in 1995, 
and an industrial sector that is looking for industrial 
tariff cuts from Brazil and India, the Government is 
hard-pressed to come out forcefully for further agricultural 
concessions.  With Finnish elections in March, the issue will 
be decided by the next government, but Lassila expected the 
government's position to essentially remain the same, even if 
the traditionally agrarian Center Party lost, which no one is 
predicting. Lassila believed progress with the EU could be 
made, but he feared it would likely be over the course of 
years, not months. 
 
(C)  Although it has only one, short growing season, Finland 
nonetheless views its agricultural sector as vital to its 
national interest.  Even if the world identifies Finland with 
its most famous company, cell phone maker Nokia, Finns 
themselves have a national identity firmly rooted in 
agriculture.  They believe that retaining an agricultural 
base through export subsidies and domestic support provides 
them with food security and the economic benefits that come 
with keeping their vast geographical area populated.  "We 
don't want everyone working in factories in Helsinki," 
Lassila quipped.  The infrastructure provided by farming also 
supports forestry, a key industry in Finland.  In the late 
1940s, following a war with Russia and an influx of refugees 
from Karelia, agricultural subsidies provided a form of 
assistance to the Karelian refugees, who would have otherwise 
been unable to support themselves. Over fifty years later, 
the assistance continues in this economically depressed 
region.  For these reasons, Finland's Agriculture Ministry is 
holding fast to the aid given to the agriculture sector.  The 
Foreign Trade Ministry is looking for some concrete economic 
benefit it can take to Finland's Parliament to demonstrate 
that ultimately some gain comes with the pain.  Lassila noted 
that with world trade growing 8% last year despite no Doha 
round progress, Finnish industry hasn't exactly been vigorous 
in pushing for resolution.  Lassila counseled that the best 
approach for the U.S. may be to exploit the ambiguity in the 
Commission's mandate to push it toward some breakthrough. 
HYATT