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INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
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UNCLAS SECTION 01 OF 04 BRUSSELS 000353 
 
SENSITIVE 
SIPDIS 
 
STATE: PLEASE PASS TP USTR AND FTC 
 
E.O. 12958: N/A 
TAGS: ECON ECIN ECPS KIPR ETRD EFIN CI EUN
SUBJECT: AREAS FOR POTENTIAL U.S.-EU COOPERATION ON CHINA 
 
¶1.  (SBU) SUMMARY:  The U.S. and EU share strong interests in 
coordinating economic engagement with China over a broad 
range of sectors, including health and safety, competition, 
ICT policy, trade, IPR and investment concerns.  The EU is 
working with China actively in these areas, and seeks greater 
cooperation with the U.S. in dealing with China across the 
board.  EU officials believe that presenting a united front 
to the Chinese is more effective than pursuing goals 
bilaterally and can avoid overlap and duplication of effort. 
European Commission officials from a variety of sectors 
argued that persistence is key when negotiating with the 
Chinese, who consistently take long term outlooks to economic 
and social issues.  European Commission staff suggested 
several areas for improved sharing of information and 
coordination of efforts. END SUMMARY. 
 
PRODUCT SAFETY DISCUSSIONS: A MODEL FOR OTHER SECTORS 
--------------------------------------------- -------- 
 
¶2. (SBU) Existing trilateral discussions among the U.S., 
China and the  EU on product safety are perhaps the best 
example of U.S.-  EU cooperation regarding China, and the 
European Commission would like to see this cooperation 
deepen.  U.S. Consumer Product Safety Commission (CPSC) 
Acting Chair Nancy Nord and European Commission Director 
General of Health and Consumer Protection (SANCO) Robert 
Madelin jointly visited China to discuss quality assurance 
for toys and electrical equipment in September 2008; this 
dialogue was continued in a trilateral meeting with CPSC 
Acting Chair Nord and Consumer Protection Commissioner 
Meglena Kuneva with their Chinese counterpart, General 
Administration for Quality Supervision, Inspection and 
Quarantine (AQSIQ) Minister Li in Brussels in November 2008. 
A follow-up meeting is expected in 2009.  In addition, China 
participated in the November,2008 1st International Risk 
Assessment Conference, hosted by DG SANCO with the support of 
OMB.  Discussions among the EU, U.S. and Chinese are ongoing, 
with a formal follow-up expected in 2009, perhaps in China. 
 
¶3. In a meeting at SANCO with EconOff on February 11, the EU 
Policy Officer for Consumer Strategy, Representation and 
International Relations Bartosz Hakbart described several 
areas where the EC would like to work more closely with the 
U.S. 
 
a.    Increased DG SANCO - Federal Trade Commission (FTC) 
cooperation on a variety of issues, including trade with 
China.  FTC and DG SANCO have regularly scheduled video 
conferences.  DG SANCO has a mandate from the European 
Council to try and improve cooperation with the FTC. 
 
b. Exchanging information -- The Consumer Product Safety 
Improvement Act of 2008 gave authority to the CPSC to share 
information with foreign governments for purposes of 
investigating and/or engaging in enforcement proceedings 
related to possible violations of its laws, if agreed to in 
an appropriate memorandum of understanding.  DG SANCO would 
like to reach agreement with USG on meeting the requirements 
for sharing this type of information regarding Chinese 
products.  According to Hakbart, the  majority of consumer 
goods sold in the EU that involve safety problems either are 
proven or are suspected to be  Chinese imports, and these 
goods are often shipped simultaneously to the U.S. and the 
EU.  Under current rules, the EU and U.S. inform each other 
officially about safety issues at the same time as this 
information is released to the media.  Earlier notification 
could allow both sides to contribute to investigations, and 
get messages out sooner to to consumers about potentially 
dangerous products. 
 
c. Coordinated study visits - Chinese leaders frequently 
travel to the EU and U.S. on programs to learn about best 
consumer safety practices.  EU and U.S. officials, for their 
part, travel to China to provide training and technical 
advice.  Sharing information about these visits and 
coordinating them when possible, said Hakbart, would help to 
reinforce common messages. 
 
FOOD SAFETY 
----------- 
 
¶4.  (SBU) DG SANCO also handles food safety issues and 
threats to public health.  In a February 4 meeting with 
EconOff, the DG SANCO Team Leader for International Relations 
for Public Health Canice Nolan said the Commission would like 
to work more closely with the U.S. in both these areas.  From 
 
BRUSSELS 00000353  002 OF 004 
 
 
a public health perspective, Nolan stressed, the EU's primary 
concern is the possible appearance of pandemics originating 
in Asia, such as more infectious strains of Avian Influenza 
(AI) or new outbreaks of severe acute respiratory syndrome 
(SARS).  The Commission wants increased transparency, better 
timeliness of reporting, and improved exchanges of best 
practices and technical advice with China, and welcomes our 
cooperation in all these areas. 
 
¶5. (SBU) Nolan also thinks there is room for improved 
cooperation in the area of food safety.  SANCO already has 
informal cooperation with both FDA and CDC on these topics, 
but the EU wants better mechanisms in place to share 
information more quickly and efficiently.  The embedding of 
FDA staff at the European Medicines Agency in London, the 
European Food Safety Agency in Italy, and the placing of an 
FDA Attache at USEU Brussels over the next few months should 
move this process forward. 
 
COMPETITION AND TECHNICAL ASSISTANCE 
------------------------------------ 
 
¶6. (SBU) At DG Competition (DG COMP), EconOffs met on 
February 13 with Policy Officer for International Relations 
Torben Toft and Desk Officer for  Formulation of 
International Competition Policy Holger Dieckmann to discuss 
cooperation in the areas of merger and antitrust  policy. 
Toft said that Chinese officials are still learning about 
international competition practices, noting that the new 
Chinese anti-monopoly law just came into effect in August 
2008, and its new anti-monopoly agency is still being 
established.  He explained that Chinese officials have 
studied U.S. and EU competition law carefully, "cherry 
picking" what suits them from each system. 
 
¶7. (SBU) Toft added that the U.S. and EU have for several 
years sent technical advisers to China to provide training 
and hold conferences on anti-trust and anti-monopoly policy. 
Both the EU and U.S. also bring Chinese officials to their 
respective capitals for additional competition exchanges. 
Coordinating these events could help to reinforce messages, 
prevent the Chinese from playing the U.S. and EU off against 
each other, and save resources for both sides by eliminating 
unnecessary duplicate trainings.  Toft noted DG COMP,s 
interest in working with the U.S. to get China to take 
measures needed for it to join the International Competition 
Network (ICN), which would move Chinese antitrust practices 
closer to the international norm. 
 
INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS 
--------------------------------------------- 
 
¶8. (SBU) At DG Information, Society and Media (DG INFSO), 
EconOff met with the  Deputy Head of Unit for International 
Relations Maria Carbone, Head of Section for India and China 
Jean-Yves Roger, and International Relations assistant 
Anne-Marie Vesdrevanis on February 4.  They insisted  on the 
need for the EU and the USG, as well as U.S. and EU business 
communities, to present a common front against Chinese 
protectionism.  They discussed the January announcement by 
the Chinese government to further develop third generation 
(3G) telecommunication networks, and the opportunities this 
offered for U.S.-EU cooperation.  They expressed concern that 
the Chinese will claim publicly to allow foreign companies to 
compete in this new market, but secretly work hard to keep 
them out.  They noted that already, while China has 13000 
licensed Value added Telecom Services, fewer than 50 foreign 
companies have been granted one of those those licenses. 
They saw the same pattern emerging with the 3G licensing 
process, when Chinese Premier Wen Jiabao claimed during his 
January 30-February 2 visit to Europe that while foreign 
companies were free to apply for 3G licenses, none has shown 
interest. 
 
¶9.  (SBU) The INFSO staff discussed Chinese insistence on 
monitoring and controlling access to the Internet.  In 
particular, they are focused on their requirement that all 
computer encryption devices within China be of Chinese 
manufacture.  Carbone noted that Commissioner for Infomation, 
Society and Media Viviane Reding has frquently and publicly 
denounced Chinese censorhip of the internet, which has 
created a strained relationship with her Chinese 
interlocutors. 
 
PLENTY OF ROOM FOR ADDITIONAL TRADE COORDINATION 
--------------------------------------------- --- 
 
BRUSSELS 00000353  003 OF 004 
 
 
¶10. (SBU) EconMinCounselor met February 3 with Director 
General for Trade Mauro Petriccione to discuss, among other 
topics, areas of high level cooperation with the U.S. in 
China.  Petriccione described U.S.-EU cooperation on Chinese 
trade issues as well-developed, and the need for further 
cooperation as well-articulated, because China is our most 
intractable trade partner.  He said that he saw no "magic 
solution" to the this problem, and stressed the need for 
consistency and perseverance in pushing for US-EU common 
goals in China, forgoing any "flashy" short term political 
achievements. 
 
¶11.  In the past, U.S. -EU cooperation on trade with China 
was focused on reducing the trade deficit, especially by 
trying to encourage Chinese imports and consumption. 
However, the economic crisis is helping to take care of that 
problem by reducing U.S. and European demand.  The primary 
focus now is countering threat of protectionism.  The U.S. 
and EU need to ensure the publically-funded recovery packages 
are not exclusively domestic. 
 
¶12. (SBU) Petriccione wants to reach out to the leaders of 
the U.S. Strategic Economic Dialogue, and to host the new 
USTR and other key trade officials, as soon as they are all 
in place.  He is eager to build the same level of cooperation 
and trust that the EU enjoyed under the previous 
administration. 
 
¶13. (SBU) Petriccione said he feels China is invested in the 
WTO, but is not deeply concerned about its success in the 
short term.  If the current problems with the Doha Round 
threaten to damage the WTO system, China would step in and 
use its maximum influence to prevent such damage.  He warned 
against believing that China has significant influence over 
India, or that India stands alone on the issues that brought 
the Doha Round to a halt in summer 2008. 
 
¶14. (SBU) The existing U.S.-EU IPR enforcement working group, 
which was established in 2006, has highlighted our joint 
efforts on China.  The working group has produced joint 
training activities in Beijing in 2008 and other commitments 
to prod China toward stronger IPR protection. The working 
group will continue to make IPR support for China a priority. 
 
 
INVESTMENT DIALOGUE DISCUSSES CHINESE INVESTMENT BARRIERS 
--------------------------------------------- ------------ 
 
¶15. (SBU) Also, the U.S.-EU investment dialogue, (established 
in 2007), which is led for the U.S. by the Treasury 
Department and USTR and for the EU by DG TRADE, is discussing 
Chinese and other third country investment barriers.  A 
forthcoming investment dialogue videoconference will focus 
exclusively on discussion of Chinese investment barriers, 
considering strategies for joint approaches and identifying 
next steps. 
 
 
COMMENT 
------- 
 
¶16.  (SBU) COMMENT:  The U.S. and EU share the world's most 
important economic relationship, based on common interests 
and common values.  The bilateral U.S.-China and EU-China 
relationships are also critical to the global economy, but 
can be more challenging due to diverging cultural, economic 
and political interests.  The EU is anxious to improve 
cooperation with the U.S. on China on a broad range of 
economic issues.  U.S. - EU cooperation in areas of product 
safety, trade policy and market access when dealing with 
China is already good, but there are areas for improvement 
here and in competition policy, ICT, IPR, investment and 
other sectors of the economy.  Commission officials believe 
that presenting a united front to the Chinese is more 
effective than pursuing goals bilaterally, and may avoid 
overlap and duplication of effort in providing technical 
assistance and training.  Commission officials from a variety 
of sectors argued that persistence is key when negotiating 
with the Chinese, who consistently take long term outlooks to 
economic and social issues. 
 
 
MURRAY 
 
 
MURRAY 
 
BRUSSELS 00000353  004 OF 004 
 
 
 
 
.