VZCZCXRO3706
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHRN RUEHROV
DE RUEHTL #0071/01 0521311
ZNR UUUUU ZZH
R 211311Z FEB 08
FM AMEMBASSY TALLINN
TO RUEHC/SECSTATE WASHDC 0509
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHSS/OECD POSTS COLLECTIVE
RUEHTV/AMEMBASSY TEL AVIV 0062
RUEHSG/AMEMBASSY SANTIAGO 0010
RUEHMO/AMEMBASSY MOSCOW 2575

UNCLAS SECTION 01 OF 02 TALLINN 000071 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR EUR/NB KATHERINE GARRY 
EEB/EPPD FOR JONATHAN MUDGE 
 
E.O. 12958: N/A 
TAGS: ECON ETRD BEXP ELAB OECD EN
 
SUBJECT: OECD SEC-GEN GURRIA COMES TO ESTONIA 
 
REF: A) 07 TALLINN 128 
     B) 07 TALLINN 567 
 
¶1. (SBU) Summary:  During his first official visit to 
Estonia February 11-12, OECD Secretary General Angel 
Gurria urged the Government of Estonia (GOE) to address 
labor market inflexibility, but said the country will 
likely accede to the OECD by 2010.  The GOE hopes that 
membership will bring access to the OECD's expertise on 
many economic issues; insight and a voice in forming its 
influential policies; and greater cooperation on 
development assistance.  Gurria praised Estonia's 
reputation as a rapid reformer, and its high-tech 
economy.  The MFA aims to submit its Initial Memorandum 
to the OECD ahead of the June 2008 Ministerial. 
Following OECD accession, Estonia will seek U.S. support 
for membership in the International Energy Agency (IEA). 
End Summary. 
 
Estonia on Track, But Needs to "Run Faster" 
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¶2. (SBU) Secretary General Gurria visited Tallinn 
February 11-12 to discuss Estonia's accession to the 
OECD.  Gurria met with President Toomas Hendrik Ilves, 
Prime Minister Andrus Ansip, Foreign Minister Urmas 
Paet, and Speaker of the Parliament Ene Ergma.  He also 
spoke on innovation policy and economic development at 
the Tallinn University of Technology.  Gurria told the 
GOE Estonia will likely accede to the OECD "faster than 
Mexico did", perhaps as early as late 2009.  He urged 
Estonia to address issues of inflexibility in the labor 
market, linking this to Estonia's competitiveness in the 
global economy.  "When everyone else is running and you 
are walking fast, you will not be fast enough," he said. 
Although Estonia is already an observer on six of the 
OECD's standing committees, the Secretary General 
invited Estonia to increase their level of involvement 
even before formal accession.  The MFA confirmed to us 
that it has received several invitations from other 
committees to participate at a working level. 
 
Next Step: Submit Initial Memorandum by June Ministerial 
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¶3.  (SBU) The MFA's goal is to submit Estonia's Initial 
Memorandum to the OECD ahead of the June 17-18 
Ministerial in Seoul on The Future of the Internet 
Economy.  While in Tallinn, SG Gurria extended an 
invitation for Estonia's Ministers of Finance, Economy 
and Foreign Affairs to attend this event.  He stressed 
that the GOE does not need to rush to complete the 
Initial Memorandum by June, adding that submission of a 
high-quality document was more important than speed. 
(Note: The MFA told us it intends to meet the June date, 
so that the OECD's discussion of Estonian accession is 
not delayed.  The next general session of the OECD is 
not until early 2009.  End Note.)  Once the memorandum 
is submitted, the OECD will undertake visits by working- 
level specialists and experts to Estonia.  Following 
OECD accession, the MFA told us, Estonia plans to seek 
U.S. support for membership in the International Energy 
Agency (IEA). 
 
GOE's hopes for Membership: Looking Behind the Curtain 
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¶4. (SBU) Aside from the prestige associated with being 
part of the OECD, the MFA sees three key benefits in 
membership: 
 
-- increased access to OECD expertise on a wide range of 
economic and fiscal matters; 
 
-- insight into and the opportunity to participate in 
OECD policy formation, including the legal concepts 
relevant to cyber-security, which is of great interest 
to Estonia; 
 
-- greater involvement in the principles of development 
cooperation that are followed by all donor states, 
including the EU. 
 
The GOE does not plan to join the Development Assistance 
 
TALLINN 00000071  002.2 OF 002 
 
 
Committee (DAC), but it does hope to coordinate 
assistance more closely with other member states.  To 
that end, Estonia already contributes significant 
assistance and training in Georgia, Moldova, Ukraine and 
Kosovo. 
 
 
What the OECD Can Gain from Estonia 
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¶5. (U) Secretary General Gurria told his GOE 
interlocutors that the OECD expects to benefit in 
several ways from Estonia's membership.  He lauded the 
country's rapid transition from a centrally planned 
Soviet economy to a dynamic, free market, hi-tech 
country.  Few current OECD members have this kind of 
knowledge and experience in their history, he said, and 
they will benefit from Estonian expertise.  He 
acknowledged that Estonia is well-known for its high 
level of IT and technology, notably e-Government and e- 
voting, and its simple tax policy. 
 
Keeping Up With the Joneses...and the Slovenes 
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¶6. (SBU) Unlike fellow OECD aspirant countries Slovenia, 
Israel and Chile, Estonia does not have anyone posted at 
the OECD in Paris.  For the time being, the MFA has 
chosen to manage the process from Tallinn, through their 
mission to France.  The MFA is also not actively 
coordinating its accession efforts with the other 
candidate countries.  However, the MFA's overall 
coordinator for OECD accession, Undersecretary of 
Economic and Development Affairs Mart Laanemae, will 
meet with his counterpart in Slovenia when he travels to 
Ljubljana later this spring for EU meetings.  According 
to the MFA, SG Gurria said that the fifth OECD 
candidate, Russia, will first have to get into the WTO, 
and "there will be some problems there."  On the 
complexity of OECD accession overall, the MFA commented 
to us that it believes the OECD process will be more 
"political" as compared to EU and WTO accession, which 
were more "technical." 
 
¶7. (SBU) Comment: Estonia is well placed to join the 
OECD in the stated 18 to 24 month time frame, and should 
have no trouble demonstrating its qualifications for 
membership (Ref B).  Nevertheless, it does not appear to 
us that MFA is far along the path yet to completing its 
Initial Memorandum ahead of the June OECD Ministerial, 
as is their stated goal.  Estonia has a strong 
reputation for 'following the rules' which should serve 
them well in this process.  MFA's coordinating team has 
many veterans of Estonia's EU and WTO accessions, and 
their assessment of gains and contributions to be had 
from membership appears to be a realistic view of what 
Estonia can expect from the OECD.  End Comment. 
 
PHILLIPS