VZCZCXRO1510
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHBS #0078/01 0211424
ZNR UUUUU ZZH
R 211424Z JAN 09
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC
RHEHNSC/NSC WASHDC
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUEAUSA/DEPT OF HHS WASHDC

UNCLAS SECTION 01 OF 09 BRUSSELS 000078 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO USTR AND OIRA/OMB 
HHS FOR FDA COMMISSIONER 
 
E.O. 12958:  N/A 
TAGS: ECON EFIN EIND EAGR ETTC PREL EUN
SUBJECT:  Working with the EU to Spur Transatlantic 
Economic Integration and Global Growth 
 
Entire Text Sensitive but Unclassified and Limited to 
U.S. Government Official Use Only Q Not for internet 
distribution. 
 
Introduction and Summary 
------------------------ 
 
¶1.  (SBU) The United States and the European Union have 
the largest economic relationship in the world and remain 
the leaders in setting the global economic and regulatory 
agenda, and successfully managing this relationship will 
be critical as we address the economic downturn this 
year.  U.S. and European (EU) firms have each invested 
over $1.5 trillion in the other's territory, their 
subsidiaries generate over $3 trillion in annual sales 
and employ some 12 million people, while trade in good 
and services stands at $1 trillion and short-term capital 
flows reach tens of billion dollars a day.  Everything we 
do to facilitate further economic integration thus 
contributes directly to U.S., European and global growth. 
Further, the 27-member state European Union, with its 500 
million consumers and $15 trillion economy, has growing 
influence over global economic negotiations, regulation 
and rule making; we need to ensure its policy directions 
are close to ours as new rules and approaches are 
fashioned in the wake of the global financial and 
economic crisis. 
 
¶2.  (SBU) The 2007 "Framework for Promoting Transatlantic 
Economic Integration" and the cabinet-level Transatlantic 
Economic Council (TEC) it created can be strengthened to 
help manage this relationship.  The Framework, and the 
TEC, are the latest in a series of bilateral arrangements 
we have established since the early 1990s, but have a 
unique, top-down political character that has allowed us 
to  achieve a number of successes since Chancellor 
Merkel, EU Commission President Barroso and President 
Bush signed the Framework nearly two years ago.  The 
process has also highlighted some structural weaknesses, 
however Q including but not exclusively on the EU side 
that we should address.  In particular we should use the 
EUQs eagerness to work with the new Administration to: 
 
-- focus the semi-annual meetings of the Council itself 
on higher-level, cross-cutting issues while increasing 
principalsQ attendance; 
-- ensure greater EU member state involvement; 
-- better engage the U.S. and EU legislative branches in 
transatlantic economic policy deliberations; 
-- expand yet rationalize Framework priorities, including 
by getting EU agreement to add energy/climate 
technologies and by strengthening the innovation agenda; 
and 
-- enhance and better coordinate management of Framework 
activities in both Brussels and Washington, including 
better utilizing our Embassies in EU member states. 
In addition, we will need to significantly improve the 
transparency and public awareness of the TEC process, 
both to guarantee continued business and consumer 
organization support and to promote our public image in 
Europe.  The TEC has proven a useful instrument that we 
can improve to achieve measurable progress in integrating 
the transatlantic economy; if it didnQt exist we would 
need to create it or something like it.  End Introduction 
and Summary. 
 
Background Q A Merkel Initiative 
-------------------------------- 
 
¶3.  (SBU) The Transatlantic Economic Framework had its 
genesis with German Chancellor Merkel in 2007.  Concerned 
the market-oriented democracies were losing relative 
economic power and influence to key emerging economies 
(especially China), she visited Washington four days into 
the German presidency of the EU and proposed to President 
Bush that we conclude an agreement to strengthen 
transatlantic economic relations. 
 
¶4.  (SBU) The Framework for Promoting Transatlantic 
Economic Integration was the result.  Signed at the April 
30 2007 U.S.-EU Summit by Chancellor Merkel, EU 
Commission President Barroso and President Bush, the 
 
BRUSSELS 00000078  002 OF 009 
 
 
Framework was negotiated at MerkelQs insistence by her 
top economic advisor, Jens Weidmann, then NSC Senior 
Director for International Economic Policy David 
McCormick and Barroso economic policy advisor Antonio 
Cabral. 
 
In brief, the Framework: 
 
-- focused on ensuring better and more compatible U.S. 
and EU regulations, as unnecessary regulatory divergences 
rather than traditional trade barriers have become the 
main impediments to transatlantic trade and investment; 
-- emphasized both improving the way we approach 
regulating through cooperation on risk and cost-benefit 
analysis and impact assessments as well as addressing 
regulatory impediments in the food, drug, chemical, 
automotive, and electrical/electronic sectors; 
-- specified other priority objectives in the areas of 
promoting capital markets integration, investment, 
innovation, intellectual property rights protection and 
supply-chain security; 
-- established the Transatlantic Economic Council (TEC) 
of Cabinet Secretaries, Commissioners and Ministers to 
hold multi-disciplinary discussions of strategic economic 
policy issues and to oversee work on Framework 
priorities; and 
-- identified TEC co-chairs to manage the process and to 
provide a "top-down" political push to break through any 
bureaucratic problems that might arise. 
 
The EU named as its TEC co-chair Commission Vice 
President Guenther Verheugen (who leads on enterprise and 
industry policy and chairs the Commission Competitiveness 
Group); the first U.S. co-chair was National Economic 
Council director Al Hubbard, followed by Assistant to the 
President for International Economic Policy Dan Price. 
 
A Success in Many Respects but ... 
---------------------------------- 
 
¶5.  (U) U.S. and EU agencies have made considerable 
progress on virtually all of the 40 or so priority areas 
listed in the seven Framework areas of cooperation 
(cooperation had begun in many areas prior to signing of 
the Framework), including: 
 
¶A.  Horizontal Regulatory Cooperation: 
OMB's Office of Information and Regulatory Analysis 
(OIRA) and the Commission's DG Enterprise and Secretariat 
General have issued new guidelines to ensure better 
consideration of external economic impacts of domestic 
regulation; OMB/OIRA, OSTP and DG SANCO (Health and 
Consumer Protection) have held workshops/conferences to 
enhance our approaches to risk analysis; OMB/OIRA and the 
Secretariat General completed a joint study on our 
respective approaches to ensuring the safety of imported 
products in the areas of pharmaceuticals, food, motor 
vehicles, cosmetics, toys and electrical/electronic 
products for consumer use; CPSC and DG SANCO now 
cooperate extensively in import product safety, and have 
worked jointly with China on this (they also have a new 
joint working group on toys); the U.S.-EU High level 
Regulatory Cooperation Forum (established in 2005 but now 
reporting regularly to the TEC) is discussing ways to 
better incorporate international standards into domestic 
regulation. 
 
¶B.  Sectoral Regulatory Cooperation: 
Drugs and Medical Devices: FDA and its EU counterparts 
have:  concluded a confidentiality agreement on medical 
devices regulation; agreed significant steps to simplify 
procedures for U.S. and EU firms to seek approval for new 
drugs; streamlined approval applications for "orphan" 
drugs; and agreed to long-term staff exchanges between 
FDA and the European Medicines Agency (EMEA).  FDA and 
its EU counterparts are finalizing the Terms of Reference 
for cooperating (with Australia as well) on inspections 
of third country providers of active pharmaceutical 
ingredients (and have done one joint inspection in 
China); FDA and EMEA have "clusters" of technical working 
groups on advanced therapies (new), pediatric drugs, 
vaccines, oncology drugs, drug safety, orphan drugs, 
 
BRUSSELS 00000078  003 OF 009 
 
 
veterinary medicines and pharmacogenomics; and the 
Commission has just published a communication that will 
facilitate the use of the Internet to provide information 
on drugs to patients despite the general ban on internet 
advertizing of drugs. 
 
Autos:  The National Highway Traffic Safety 
Administration and DG ENT concluded a Memorandum of 
Cooperation in automotive safety and emissions standards 
in June, and have cooperated on establishing 
international standards for such products as electronic 
stabilizers; 
 
Electrical/Electronic Equipment:  Labor's Occupational 
Safety and Health Administration has issued a "Request 
for Information" to consider the EU request to expand the 
scope of suppliers' declarations of conformity to U.S. 
workplace standards on electrical safety for a range of 
low-voltage/lower-risk products; 
 
Chemicals:  WeQve had extensive discussion highlighting 
numerous concerns over the implementation and potentially 
trade-distorting effects of the EUQs massive 
QRegistration, Evaluation and Authorization of Chemicals 
(REACH) legislation; and have a Commission commitment to 
ensure that REACH does not disrupt our $2 billion in 
exports of cosmetics and personal care products to the EU 
(the Commission acknowledges that REACH is flawed in its 
treatment of imported cosmetic ingredients but is 
unwilling to re-open the legislation; its "pragmatic" 
approach to resolving this remains problematic); EPA has 
offered to cooperate with the EU Chemical Agency as EPA 
and its Canadian and Mexican partners review over 6,000 
high-volume chemicals in NAFTA trade. 
 
Food Safety: Despite the high-profile failure to get EU 
acceptance of poultry cleaned with antimicrobial 
treatments, discussed below, we have collaborated on our 
approaches to the safety of products from cloned animals 
and FDA is working toward long-term staff exchanges with 
the European Food Safety Agency. 
 
Metrics: the EU has extended its acceptance of dual 
labeling (metric/standard) for units of measurement. 
 
¶C.  Capital Markets: 
These issues are worked primarily through the Financial 
Markets Regulatory Dialogue (FMRD), but agreement on 
accounting standards is considered a major TEC success. 
With SEC recognition of the use of International 
Financial Reporting Standards for foreign filers in the 
U.S., and EU acceptance in December of the equivalence of 
US Generally Accepted Accounting Principles for U.S. 
filers in the EU, the U.S. and EU have virtually 
eliminated the need for our firms to reconcile financial 
statements to our respective standards in our capital 
markets.  This section also covers work on mutual 
recognition of compatible regimes for securities 
exchanges and brokers/dealers and several key insurance 
issues. 
 
¶D.  Investment: 
The May TEC recommended, and the June Summit issued, a 
joint statement on Open Investment principles; the year- 
old U.S.-EU Investment Dialogue has ensured transatlantic 
cooperation on IMF and OECD work on sovereign wealth 
funds and discussed bilateral regulations on investment 
and is now promoting collaboration on addressing third 
country barriers, notably in China, India and Russia. 
 
¶E.  Innovation: 
The Department of Commerce and DG ENT held expert 
exchanges on policies to promote innovation and 
innovation measurement (including in "green" 
technologies); we extended our Science and Technology 
agreement and expanded it to cover space policy and 
security technologies; joint workshops have helped guard 
against EU overregulation of nanotechnologies and radio 
frequency identification devices; weQre working toward 
compatible standards for e-Accessibility and electronic 
patient health records. 
 
 
BRUSSELS 00000078  004 OF 009 
 
 
¶F.  IPR: 
Customs and Border Protection (CBP) and DG TAXUD 
(Taxation and Customs) have conducted a number of joint 
exercises against counterfeit products, including 
semiconductors; the U.S.-EU IPR Enforcement Working 
Group, established in 2005, has conducted joint customs 
training and public information workshops in China, 
Russia and other high-counterfeit markets. 
 
¶G.  Secure Trade: 
CBP and DG TAXUD agreed to and are implementing a roadmap 
to allow mutual recognition of our respective secure 
trader programs; CBP has hosted a number of EU officials 
in its National Targeting Center; the EU has used the TEC 
to raise its significant concerns with new U.S. 
legislation requiring by 2012 100 percent scanning of all 
containers prior to shipment to the U.S. 
 
¶6.  (SBU) In addition, the meetings of the Transatlantic 
Economic Council in November 2007 and May and December 
2008 have provided an excellent forum for multi- 
disciplinary principalsQ-level discussion of key high- 
level strategic economic issues, those that have broad 
international implications and cut across economic 
sectors.  These include how we can work together to 
manage the growing economic role of China, how to enhance 
reform in Russia, increasing our mutual energy security, 
and the impact of the financial crisis on the global 
economy.  The discussion on China in particular led to 
important subsequent collaboration, including in 
Secretary PaulsonQs consultation with his counterparts 
prior to the subsequent U.S.-China Special Economic 
Dialogue, in a follow-up TEC principals DVC on China, in 
detailed USTR-led symposia sharing experiences and 
approaches to negotiating with the Chinese, and in 
collaborating in bringing disputes with China before the 
WTO.  Our collaboration with respect to China on product 
safety, IPR and investment also benefited from this TEC 
discussion. 
 
Problems Remain Q the Role of the TEC Co-chairs 
--------------------------------------------- -- 
 
¶7.  (U) Most of the progress in these priority areas 
under the Framework stems from extensive -- and 
organically growing -- cooperation between individual 
U.S. government agencies and their EU counterparts in a 
multitude of different working groups and arrangements. 
That said, the Framework serves to highlight and 
publicize the cooperation and, at times, provides a 
useful impetus when agencies are asked to report to the 
co-chairs on the status of their collaboration.  Agency 
heads may quickly brief the Council on progress in 
various areas; this is also reflected more extensively in 
the QProgress ReportsQ issued at the TEC meetings. 
 
¶8.  (SBU) In a number of instances, however, the TEC co- 
chairs and the Council meetings themselves Q the "TEC 
process" Q have been instrumental in getting results, 
most notably on accounting, on finally getting a 
Commission proposal on poultry (however flawed), in re- 
opening consideration of the use of suppliers 
declarations of conformity, in obtaining an official 
Commission announcement to help deal with the problem 
REACH creates for imported cosmetics, in spurring 
cooperation on impact assessments and risk analysis, in 
initiating cooperation on import product safety, on 
establishing the Investment Dialogue and agreeing the 
Open Investment Statement, on concluding the roadmap on 
secure trade systems, on highlighting the problem of 100 
percent scanning, and, most recently, in raising our 
political concerns with recent Commission initiatives on 
capital markets regulation (on credit rating agencies, 
commodity derivatives, and capital requirements). 
 
¶9.  (SBU) The lack of a final acceptable outcome in some 
of these areas and the high public profile surrounding 
some of the issues (notably poultry) has led some to 
question the ultimate effectiveness of the TEC process, 
especially in dealing with "politically sensitive" 
issues.  But as Dan Price remarked to CEOs attending a 
Transatlantic Business Dialogue meeting on the margins of 
 
BRUSSELS 00000078  005 OF 009 
 
 
the June 2008 U.S.-EU Summit, by definition only the 
difficult issues will come to the co-chairs and the 
Council.  And these may, in the end, be too difficult to 
resolve. 
 
Improving the Chance of Success 
------------------------------- 
 
¶10.  (SBU) Our inability to fully resolve some issues 
stems from both systemic and structural differences in 
our systems; the former we will have to live with while 
certain steps may be able to address the structural 
problems.  As much as the Europeans may want it, our 
Executive Branch cannot "control" Congress or our 
independent regulatory agencies; nor can the Commission 
control the Council (comprised of the individual member 
states) or the European Parliament (EP), or change the 
"collegial" nature of the Commission itself.  But we 
should be able to enhance the meetings of the 
Transatlantic Economic Council, bring more Commissioners 
into the process, expand the involvement of the member 
states, promote greater collaboration between Congress 
and the EP, rationalize the priorities under the 
Frameork, and improve the way both Washington and 
Brussels manage the work on those priorities.  Many of 
these changes can probably be addressed by amending the 
June 2007 TEC co-chairs' agreement on working methods. 
 
¶11.  (SBU) Commission Participation: Despite Commission 
President BarrosoQs personal investment in the Framework, 
relatively poor attendance by Commissioners at Council 
meetings (never more than five) has weakened the utility 
of those meetings.  Indeed, only a few Commissioners 
other than Verheugen seem to actively support the TEC 
process: Mandelson and now Ashton (trade), Kuneva 
(consumer protection), Piebalgs (energy), McCreevy 
(internal market/financial services), Ferrero-Waldner 
(external relations, although she doesnQt attend Council 
meetings).  Others Q including in particular Environment 
Commissioner Dimas and Health Commissioner Vassiliou 
seem to actively oppose the TEC, and have openly refused 
to attend Council meetings despite the inclusion of 
"their" issues on the agenda. 
 
¶12.  (SBU) Part of this opposition is bureaucratic: many 
Commissioners (even those, like McCreevy and Piebalgs, 
who support the process) dislike the idea of being 
"called to account" before the TEC on "their" issues (a 
feeling that may not be unknown in Washington), and the 
collegial nature of the Commission makes it virtually 
impossible for Commissioner Verheugen to command 
cooperation or attendance.  Some of the opposition is 
substantive: Dimas and Vassiliou disagreed vehemently 
with Verheugen on poultry, and Dimas and Verheugen differ 
significantly on REACH.  Some is political: Dimas in 
particular opposed bringing energy/climate change 
technologies further into the TEC with the outgoing 
administration, arguing it would affect the Poznan UNFCCC 
negotiations.  Another part, however, is simple 
oversight: it apparently never occurred to Verheugen to 
invite the Commissioners in charge of agriculture, 
competition, science and technology and information 
technology, even though all have direct equities in the 
Framework and can contribute to the broader Council 
discussions of regulation, innovation and 
competitiveness. 
 
¶13.  (SBU) Commission participation needs to improve if 
Council meetings are to be effective.  Although the EU 
installs a new Commission in November, the Administration 
should get President Barroso to commit to better 
attendance at any future meetings.  We believe this can 
be done.  DimasQs staff indicate he would be willing to 
attend a Spring meeting, as has VassiliouQs chief of 
staff if the issue of food safety can be addressed more 
broadly; the offices of Commissioners Kroes 
(competition), Potocnik (S&T), Almunia (economic and 
monetary affairs) and Reding (information technology) 
have all stated their willingness to consider attending 
as well. 
 
¶14.  (SBU) The Member States: Although the Framework was 
 
BRUSSELS 00000078  006 OF 009 
 
 
a German (and thus member state) initiative, the 
Commission quickly took control, and indeed Commissioner 
Verheugen and his staff have resisted anything more than 
token member state participation in the Council meetings, 
preferring instead to occasionally brief ministers at 
meetings of the Competitiveness Council.  As the poultry 
and REACH/cosmetic issues demonstrate, however, this is a 
recipe for failure: if member state ministers in the many 
areas the Framework covers feel blindsided by Commission 
commitments at the TEC, they will oppose Commission 
proposals for that reason alone.  After the poultry 
debacle, when the French Agriculture Minister got all his 
counterparts to oppose the CommissionQs attempt to permit 
the use of anti-microbials, the French and other member 
states reportedly forced the Commission to brief more 
regularly on the TEC.  (In part because of the dearth of 
Commission briefings, USEU staff are frequently asked to 
brief member state permanent representation officials on 
the TEC.)  The semi-ironic aspect of this is that member 
state officials frequently participate in various 
workshops and other activities that fall under the 
Framework. 
 
¶15.  (SBU) We should recommend changes to further engage 
member states in the TEC process, with several options 
possible.  As an example, Ministers of Economy of at 
least the current and next two presidencies should be 
"statutory" members and full participants at TEC 
meetings.  Second, without changing VerheugenQs role as 
EU TEC co-chair, the economic advisors to the heads of 
state of the current and next EU presidencies or 
similarly high-ranking "Sherpa" sorts of officials could 
be occasionally included in TEC co-chair discussions, 
especially when those calls are oriented toward preparing 
the Council meetings and the broader strategic issues 
those meetings will discuss.  Third, we should insist 
that the Commission invite member state experts to more 
of the activities under the Framework, especially in 
areas where the member states retain considerable 
competence Q IPR enforcement, investment and innovation 
principal among them. 
 
¶16.  (SBU) Council Meetings: The TEC meetings were 
envisioned as opportunities for U.S. and EU principals to 
oversee activities under the Framework and to have high- 
level, multidisciplinary discussions about economic 
policy issues that are strategically important, have 
broad international impacts and implications, and cut 
across numerous economic sectors.  The three meetings 
thus far have done both, although in part because of the 
disagreement on poultry some in Brussels question whether 
a principals-level venue is appropriate for trying to 
resolve specific disputes.  In addition, some here 
express impatience with an over-emphasis on "reporting 
back" to the Council on activities covered in the 
Progress Reports. 
 
¶17.  (SBU) Maintaining an appropriate balance in TEC 
meetings between broader discussions of the more 
strategic/cross-cutting issues and addressing the 
discrete, technical issues that have proven difficult to 
resolve elsewhere will always be difficult.  Both types 
of discussions are important to maintaining TEC momentum, 
ensuring buy-in and continued interest on the part of TEC 
participants and producing the concrete results sought by 
stakeholders.  The requirement to report back to the TEC 
does provide an incentive to agencies to make progress in 
their collaboration and can provide political profile to 
activities that sometimes deserve more attention; at the 
same time, subjecting specific problems to critical 
scrutiny by colleagues from different agencies can help 
break through impasses.  But in general the preference 
should be for the co-chairs to resolve as many of the 
specific problems as possible; where an issue cannot be 
resolved the co-chairs should determine whether there is 
a broader underlying issue the Council should discuss. 
Poultry is one example: rather than focusing on the use 
of anti-microbials in poultry, the TEC might have 
discussed the broader issue of how to resolve the many 
food safety regulatory differences that disrupt 
agricultural and food trade between us.  This was, in 
effect, the approach adopted in the December 2008 TEC 
 
BRUSSELS 00000078  007 OF 009 
 
 
discussion of the CommissionQs recent financial services 
proposals.  Another example could be to focus on 
practical ways to address legitimate national security 
while maintaining an open investment climate (the EU and 
many member states lack a CFIUS-like instrument).  (The 
December 2008 TEC meeting adopted criteria to limit, to 
some extent, the issues brought before the Council.) 
 
¶18.  (SBU) Further, Transatlantic Economic Council 
deliberations of broader strategic issues Q those with 
significant longer-term, international ramifications and 
impacts -- should be expanded.  The November 2007 
discussion of China shows the potential in this Q issues 
like addressing the rise of key emerging countries, 
considering solutions to the financial crisis, managing 
energy challenges, continuing global momentum toward 
multilateral trade liberalization, and promoting 
cooperation on innovation can all benefit from 
multidisciplinary discussion via the exchange of ideas 
between TEC members from different agencies with widely 
differing viewpoints and interests.  These groupings with 
the EU are rare and provide unique opportunities to 
generate new ideas.  To avoid the TEC becoming a "talk 
shop," however, the co-chairs will need to ensure the 
discussions are results oriented by drawing out possible 
follow-up actions and ensuring follow-through. 
 
¶19.  (SBU) Legislators: Congress and the European 
Parliament can significantly affect transatlantic 
economic integration, although their roles differ 
somewhat.  While the EP now has "co-decision" powers over 
virtually all economic and environmental policies, 
including many measures we would consider 
administrative/regulatory, unlike Congress it cannot 
initiate legislation.  (That power is reserved to the 
Commission, although the EP is increasingly using 
reports, resolutions and other ways to pressure the 
Commission into acting.)  Involvement of the legislators 
in the TEC process, however, is currently limited to 
representatives of the "Transatlantic Legislators 
Dialogue" (TALD, co-chaired by MEP Jonathan Evans and 
Representative Shelley Berkeley of Nevada) being included 
in the group of advisors to the Council, which also 
includes the co-chairs of the Transatlantic Business 
Dialogue and the Transatlantic Consumers Dialogue. 
 
¶20.  (SBU) This is generally recognized as inadequte, 
and Berkeley and Evans told the TEC co-chirs in December 
that they would try to significantly expand legislator 
engagement, specifically by facilitating discussions 
among legislators engaged in policy issues being 
addressed under the Framework and by expanding the 
involvement of Senators, who are not part of the TALD. 
The EP, which consistently wants to expand ties with 
Congress, is probably better organized to do the first of 
these, as the President of the EP regularly convenes 
Committee chairs to discuss transatlantic issues (largely 
economic policy, where the EPQs influence is greater) and 
each EP Committee has at least one staffer who follows 
activities in its U.S. counterpart.  The Administration, 
and especially the NSC, should actively work with 
Representative Berkeley to support her efforts, including 
in particular by offering briefings on Framework 
activities to relevant committees, by seeing if we can 
facilitate issue-based discussions between legislators 
following, for instance, innovation policy, and by 
ensuring that the TEC co-chairs also meet with relevant 
legislators separately from the other Dialogues.  (TABD 
and TACD recognize the difference in the role of the 
legislative branch and will not mind.) 
 
¶21.  (SBU) Improving the Framework:  The range of 
activities under the Framework is robust, but it can be 
improved and better targeted.  First, stakeholders have 
asked that more prominence be given to cooperation on 
energy and climate change technologies, some (biofuels 
specification, energy innovation) of which are scattered 
about under various Framework headings.  The U.S. 
proposed, and the December 2008 TEC appears to have 
agreed in principle, to try to develop a new annex in 
this area for possible approval by the next Summit.  In 
addition, one area of the Framework where progress seems 
 
BRUSSELS 00000078  008 OF 009 
 
 
most disjointed is the Innovation annex; this can 
probably be made more coherent by focusing it on four 
basic areas of cooperation, innovation policy, advanced 
technologies cooperation (including nanotechnologies and 
other joint research under the S&T agreement), the 
application of information and communication technologies 
(which would include current efforts on RFID, e-health 
and e-Accessibility) and the health and energy sectors 
(although the latter would be part of the energy/climate 
change annex if adopted). 
 
¶22.  (SBU) Managing Framework Activities:  This problem 
is far greater on the EU side than on ours.  Currently, 
Commissioner Verheugen relies on an assistant-secretary 
level person in his Enterprise Directorate to coordinate 
EU activities, and if Verheugen has little sway over his 
counterparts in the College of Commissioners, DG ENT has 
none over the other Directorates.  We need to encourage 
the EU to reconsider this arrangement.  The Commission 
PresidentQs office would be far better placed to spur 
activities by all DGs, but his staff is spread far too 
thin.  The Commission Secretary General, however, reports 
directly to the President, and she and her staff have 
considerable leverage over the DGs (not least in 
controlling the agenda of proposals that are put to the 
Commission).  While the Secretariat General too is 
overworked, the Deputy SecGen who coordinates the 
CommissionQs work on the broad G-8 agenda would appear 
well-placed to coordinate TEC activities as well. 
 
¶23.  (SBU) On the U.S. side, the fact that the Framework 
is a Presidential initiative makes the NSC/NEC the 
appropriate locus for coordinating U.S. activities under 
it.  NSC/NEC staff, however, must necessarily focus on 
the issues before the TEC co-chair and the preparation 
for the Council meetings, and cannot regularly monitor 
the many other activities under the Framework until 
problems arise. 
 
¶24.  (SBU) Identifying a suitable office within the 
interagency Q at State or elsewhere Q to staff NSC and 
serve as a Secretariat for the TEC and repository for TEC 
materials would ease the workload on NSC staff, ensure 
more consistent oversight of ongoing activities under the 
Framework, and provide additional impetus to implement 
TEC commitments.  The Secretariat also could serve as a 
place for those outside the government to get answers or 
information on TEC activities, and be responsible for 
maintaining a comprehensive TEC website, with links to 
all relevant current and historical TEC documents. 
 
¶25.  (SBU) In addition, we should expand the involvement 
of our Embassies in member state capitals in the TEC, 
especially when it appears that the member states are the 
source of difficulty in resolving a problem on the TEC 
co-chairsQ agenda.  A secretariat-type office, working 
with NSC/NEC staff, could mobilize our resources at EU 
member state posts more effectively, sending demarche 
requests to spur Embassy engagement with key member state 
governments that become "problematic" on TEC issues, and 
could ensure that our member state posts are kept 
informed of TEC developments. 
 
¶26.  (SBU) Transparency, Outreach and the Work Program: 
The Framework calls for the Council to adopt a work 
program for activities under it; the December Council 
committed to stakeholders to complete this expeditiously. 
All interested businesses and consumer organizations view 
this, and better transparency in general, as high 
priorities, and welcomed the TEC co-chairs commitment to 
developing a "TEC" website.  The co-chairs and their 
staffs need to assign this task to appropriate U.S. and 
EU offices and should ensure that the work program and 
website include links to all major relevant documents 
(for instance, the U.S.-EU Action Strategy for the 
Enforcement of Intellectual Property Rights). 
 
¶27.  (SBU) We should consider additional steps to address 
business and consumer group transparency concerns by 
increasing the number of briefings before the TEC meets 
and making it a regular practice to offer briefings 
before/after official U.S.-EU meetings on issues that 
 
BRUSSELS 00000078  009 OF 009 
 
 
fall under the TEC umbrella.  As part of such efforts to 
improve transparency, we should make a special effort to 
facilitate greater involvement by consumer groups, which 
lack the resources business groups have employed in 
providing TEC input.  TACD has complained consistently 
that its input into the TEC process goes unheeded. 
Regular meetings with consumer groups on the TEC, well 
before meetings occur, would help alleviate this problem. 
 
Not a Guarantee, but the Right Direction 
---------------------------------------- 
 
¶28.  (SBU) The strategic rationale for promoting 
transatlantic economic integration has not changed; if 
anything, the financial crisis has only increased the 
need to guard against and eliminate unnecessary 
regulatory divergences between the U.S. and our European 
allies.  The TEC process can be a useful instrument in 
this, especially if we and the Europeans take the steps 
outlined above.  Now is the time to do so Q the Europeans 
are eager to work with the new Administration, the EP 
elections in June and the upcoming Commission transition 
in November mean the Commission and Czech presidency will 
be free of new major legislative initiatives after early 
April, and setting things right before a new Commission 
comes into office will be important to avoid re-re- 
inventing the wheel.  Even an improved TEC process will 
not be a panacea, however; the U.S. and EU will continue 
to have disputes which may need to go to the WTO and 
elsewhere for resolution.  But the TEC mechanisms and the 
strategic discussions in the Council should serve to 
promote constructive engagement and to minimize problems 
in the future. 
 
Murray