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RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSL RUEHSR
DE RUEHBS #0948/01 1891535
ZNR UUUUU ZZH (CCY)
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FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC 0000
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
RUEHFR/AMEMBASSY PARIS

UNCLAS SECTION 01 OF 07 BRUSSELS 000948 
 
C O R R E C T E D  C O P Y  (PARIS ADDRESSEE ADDED) 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO USTR AND OIRA/OMB 
HHS FOR FDA/LUMPKIN 
PARIS also for USOECD 
 
E.O. 12958:  N/A 
TAGS: ECON EFIN ETRD EIND ECIN EAGR EINV ETTC OECD PREL
EUN 
 
SUBJECT: TEC STAKEHOLDERS PRAISE DAY-LONG OUTREACH EVENT 
 
BRUSSELS 00000948  001.3 OF 007 
 
 
SUMMARY: 
------- 
 
¶1. (U) Over 70 EU business, consumer group and European Commission 
representatives joined USEU staff June 29 for an energetic 
discussion of the Transatlantic Economic Council and Transatlantic 
Economic Framework(TEC/TEF), organized jointly by the Transatlantic 
Business Dialogue (TABD) and USEU in Brussels.  The TEC stakeholders 
participated enthusiastically in a full day of TEC review and update 
workshops, where USEU staff and European Commission counterparts 
briefed TEC stakeholders on progress in the key areas of horizontal 
and sectoral regulatory cooperation, capital markets integration, 
investment, innovation, IPR and secure trade/transport.  The 
workshops were followed by high-level speeches, including by EU TEC 
Co-Chair Gunter Verheugen, TABD Co-Chair Jurgen Thumann and USEU 
Charge Murray.  Stakeholders, Verheugen and other participants 
praised the event as providing a needed update and boost to TEC 
momentum.  Verheugen emphasized the need to raise TEC ambitions, 
improve stakeholder relations and agree on a medium term TEC 
roadmap/workplan, and underscored his hopes for a successful fall 
TEC meeting.  Verheugen, other Commission officials and the 
stakeholders reacted positively to USEU's proposal to distribute 
informal project updates and to deepen our TEC innovation 
cooperation, including via launching an innovation working group. 
End Summary. 
 
¶2. (U) The Transatlantic Business Dialogue on Monday June 29 
organized a day-long series of "workshops" on each of the eight main 
themes under the 2007 U.S.-EU Framework for Promoting Transatlantic 
Economic Integration.  USEU provided facilities for the event, 
co-sponsored by AmchamEU, the U.S. Chamber, BusinessEurope and the 
European Americastanding and cooperation on strategic 
international economic policy issues and of th% TEC co-chairs in 
trying to find novel ways to resolve outstanding problems.  All 
spoke as well of the need to focus on steps that would help address 
the financial crisis (including through capital market integration), 
the need for cooperation on energy technologies to address climate 
change, the importance of IPR, and the need for a long-term view and 
perseverance.  All want the governments to look for areas of 
progress, including through the use of mutual recognition. 
 
Horizontal Regulatory Cooperation 
--------------------------------- 
 
¶4. (U) John Farnell, Director of International Affairs, DG 
Enterprise (DG ENTR) opened the first session by expressing 
appreciation for the "impressive" cooperation between the U.S. and 
EU on horizontal regulatory cooperation.  He said that progress had 
been made in risk assessment discussions, noting that even if the 
U.S. and EU have different policies on how to manage risk, fruitful 
exchanges on evaluating risk are taking place.  Farnell added that 
discussions on impact assessments are also showing results, and that 
he looked forward to Office of Management and Budget (OMB) case 
studies on impact assessments that would be exchanged this summer. 
He noted other areas for regulatory cooperation, including emerging 
technologies, traceability, and self-regulation, and expressed hope 
that some of these issues could be discussed at the July 24 U.S.-EU 
High Level Regulatory Cooperation Forum (HLRCF) to be held in 
Brussels. 
 
BRUSSELS 00000948  002.2 OF 007 
 
 
 
¶5. (U) USEU Econoff agreed with Farnell's assessment and said the 
regulatory conversations between the U.S. and EU were among the most 
durable and productive TEC outcomes.  He said another important area 
of cooperation has been on trilateral talks with China in the areas 
of risk and regulation.  Econoff also noted the bimonthly digital 
video conference meetings between the Consumer Product Safety 
Commission and DG SANCO in the Toy Safety Working Group, as well as 
prospective discussions between toy industry representatives on both 
sides of the Atlantic on convergence in product safety regulation. 
Econoff emphasized that U.S. regulators were eager to discuss 
nanotechnology at the HLRCF. 
 
¶6. (U) On standards, Farnell opened with the issue of Suppliers' 
Declaration of Conformity (SDOC) for certain low-voltage electrical 
items, and provided a comprehensive report on the current OSHA 
consultations, saying the EU expected a determination on possible 
use of SDOC in the U.S. in the fall of 2009.  In addition, at the 
request of the October 2008 High level Regulatory Cooperation Forum, 
the U.S. and EU are undertaking a joint study of our respective 
approaches to using international standards in our regulations; this 
should be completed this year.  USEU Econoff added cooperation 
between the American National Standards Institute (ANSI) and the 
European Standards Organizations (ESO) is excellent, and will be 
furthered at a joint ANSI-ESO conference in Washington in 
September. 
 
Sectoral Regulator; cse of newmitments to adopt and promote Global 
Harmonization Task Force (GHTF) guidelines, which involve not only 
the U.S. and EU but also Australia, Canada and Japan.  Progress has 
also been made on developing Global Nomenclature for Medical Devices 
and discussion on Unique Device Identification.  In the area of 
nanotechnology, both the U.S. and EU have determined that the 
current regulatory frameworks in place are sufficient for 
appropriate regulation of medical devices using nanomaterials. 
 
¶10. (U) USEU staff noted progress in international cooperation on 
cosmetics regarding alternative test methods to reduce the need for 
animal testing with the agreement on a Framework for International 
Cooperation on Alternative Test Methods (ICATM) in September 2008 
and an implementing Memorandum of Cooperation between the involved 
agencies in April 2009.  This is of particular interest for the EU 
because in March 2009 a marketing ban of products containing 
ingredients tested on animals became effective, although for some 
tests the ban will not be in force until 2013.  The U.S. and EU also 
collaborate in the International Cooperation on Cosmetics Regulation 
(ICCR); the ICCR has validated nine out of thirty-four testing 
alternatives to date. 
 
BRUSSELS 00000948  003.2 OF 007 
 
 
 
¶11. (U) Food Safety:  Perhaps because of the heated TEC debates last 
year about the effective EU ban on U.S. poultry imports, the 
discussion of food safety issues was short, with the government reps 
referring to the mid-June discussions between Health and Consumer 
Safety Commissioner Vassiliou and her USDA and HHS/FDA counterparts 
in Washington.  There si a general sense of a need to return to 
"first principles," and to strengthen our cooperation scientific 
risk analysis to address the host of food safety issues both sides 
have. 
 
¶12. (U) Chemicals: The discussion of pure chemical issues was also 
quick, with the government representatives pointing to our 
cooperation, including in the OECD, on good laboratory practices, 
classification and labeling.  The representative from DG Environment 
noted that DG ENV, DG Enterprise and the European Chemicals Agency 
have frequent discussions with EPA about dangerous chemicals, 
especially as the EU implements REACH and the U.S. reviews the Toxic 
Chemical Substances Act. 
 
¶13. (U) Regarding automotive sector cooperation, USEU Econoff 
reminded the audience that the National Highway Transportation 
Safety Authority (NHTSA) and DG ENTR concluded an MOU on cooperation 
in motor vehicle safety and emissions standards in June 2008.  He 
reviewed EU and U.S. joint work to secure international recognition 
of electronic stability controls in the United Nations Economic 
Commission for Europe (UNECE) World Forum for Harmonization of Motor 
Vehicle Regulations (WP29).  DG ENTR and NHTSA met June 22-26, 2009 
on the margins of a WP 29 plenary in Geneva to discuss next steps in 
developing a workplan for compatible approaches to key automotive 
standards, including possibly for global diesel engine standards. 
Representatives from the two agencies will meet in Washington late 
September to discuss an exchange of information on our respective 
work-programmes, ways to improve the effectiveness of the 1998 
Agreement,  identification of priority areas where the principle of 
functional equivalence could be applied, and regulatory developments 
on two and three-wheel motor vehicles. 
 
¶14. (U) Suppliers Declaration of Conformity for "Low-risk" 
Electrical and Electronic Products was discussed briefly, with DG 
ENT pointing to the EU's long history of using SDOC and the current 
OSHA evaluation of over sixty submissions to its January Request for 
Information on the use of SDOC for this relatively limited product 
range.  The OSHA review is expected to be completed in early fall. 
 
Capital Markets Integration 
--------------------------- 
 
¶15. (U) Nathalie de Basaldua, Deputy Cabinet Head for EU Internal 
Market Commissioner Charlie McCreevy, told the audience that the new 
Obama Administration Financial Regulatory Reform proposals show 
"strong convergence" with the EU's own efforts to strengthen 
financial services regulation and improve supervisory oversight.  De 
Basaldua praised the success of the U.S.-EU Financial Market 
Regulatory dialogue (FMRD) in the past and noted that our regulatory 
discussions may need to move to a higher level in the future.  She 
said the EU and U.S. share general principles guiding our respective 
financial regulatory reform efforts, noting they are "enshrined in 
the G-20 agreements."  Divergences of approach are only found in 
details of proposals, she explained, adding that the need to 
cooperate is understood by all. 
 
¶16. (U) De Basaldua listed the many regulatory initiatives 
undertaken by the European Commission as "emergency responses" to 
the crisis, (e.g. higher deposit guarantees, legislation on credit 
rating agencies).  She acknowledged that differences in the 
respective U.S. and EU political timetables forced the EU to take 
action sooner than the U.S.; if the EU had not acted, it would have 
lost an entire year due to European Parliamentary elections and 
transition to a new Commission late this year.  She said June 2 
meetings in D.C. between Commissioner McCreevy and Secretary 
Geithner, Fed Chairman Bernanke, SEC Commissioner Shapiro and others 
proved fruitful.  In the first half of July, she revealed, a 
delegation from DG Internal Market will visit Washington to continue 
regulatory discussions with their counterparts. 
 
¶17. (U) De Basaldua criticized the "Buy America" provision included 
in U.S. stimulus legislation, because "the principle has been taken 
up by other countries and may have a detrimental effect on trade," 
jeopardizing the recovery, but she said the political imperatives 
 
BRUSSELS 00000948  004.2 OF 007 
 
 
that dictated it were understood, and asked that the EU's political 
choices be equally respected. 
 
¶18. (U) During questions, a European Banking Federation 
representative expressed concern that the Framework objective of 
mutual recognition for brokers and dealers was not moving forward; 
De Basuldua acknowledged this but affirmed that this remains an 
"Key" objective.  When asked about Congressional hesitation about 
mutual recognition, she added that achieving this requires a 
thorough analysis of supervisory practices on both sides, adding 
that this is "not an emergency" issue.  TABD expressed concerns 
about EU regulatory measures that appeared to build divergences in 
the transatlantic market, and underscored this is both dangerous and 
contrary to the spirit of the Framework.  De Basuldua disagreed with 
his recommendation that we agree on "principles" for a regulatory 
approach, saying we had that and that the differences are in the 
details; here, she stressed the Commission "recognizes the need for 
us to work on parallel tracks."  A TACD representative praised the 
U.S. Administration's proposal to establish a Consumer Financial 
Protection Agency (CFPA), and expressed concern that EU reform 
efforts lacked a consumer focus.  De Basaldua responded that the EU 
focus has been on protecting retail investors, but said the 
Commission would welcome more input from TACD and other consumer 
groups on ensuring that reforms adequately protect consumers. 
 
Investment 
---------- 
 
¶19. (U) USEU presented progress in the Investment Dialogue, 
recalling its creation, the May 2008 Open Investment Statement, the 
efforts to ensure parallel approaches to sovereign wealth funds, 
discussion of bilateral issues (CFIUS implementing regs, member 
state measures) and work on third country barriers.  We noted the 
development of a detailed matrix of barriers and sectors in the key 
third countries, our sharing of analyses and nascent steps toward 
developing a coherent approach to lobbying on these issues.  The 
main comment from the floor was a reiteration of concern about how 
Buy American policies can both create barriers and provide cover for 
third countries, such as China, to adopt both trade and investment 
barriers themselves. 
 
Innovation 
---------- 
 
¶20. (U) Gerald Santucci, head of unit for Network Enterprises and 
Radio Frequency Identification Devices (RFID) at DG Information 
Society (DGINFSO), praised the TEC's role in promoting U.S.-EU 
collaboration over the past two years on RFID development and 
deployment.  He highlighted the joint DGINFSO-DOC/EPA pilot project 
on radioactive isotope tracking as an example of progress 
facilitated by the TEC.  Santucci stressed the importance of 
deepening TEC work on innovation, a vital tool through which our 
economies can exit the current global crisis and restore long-term 
competitiveness.  He noted the value of the TEC facilitating 
cooperation on E-accessibility and E-health, but suggested the TEC 
should also examine policy issues around Next Generation Network 
(NGN) deployment, since high-speed connectivity is a critical 
enabling factor for innovation throughout the economy. 
 
¶21. (U) USEU staff welcomed Santucci's comments, reviewed specific 
progress on innovation best practice exchanges, S&T cooperation and 
nanotechnology discussions, and presented the USEU proposals that 
TEC innovation collaboration be restructured and that a TEC 
innovation  working group be established.  Peter Droll, head of unit 
for innovation policy at DG Enterprise, said the TEC is an ideal 
mechanism to discuss how to use innovation to address the biggest 
societal challenges: aging, health care, climate, sustainability, 
and others.  He welcomed the idea of a TEC innovation working group, 
and suggested this could discuss cooperation on metrics, cluster 
policy and and public sector innovation, in addition to reviewing 
work on the ongoing innovation projects. 
 
¶22. (U) Representatives from Oracle, Intel and TACD supported the 
innovation working group proposal as well.  The Intel rep stressed 
that the working group should be a public-private undertaking, with 
a significant private sector role, while the TACD rep said that a 
working group should discuss the importance of interoperability and 
open standards in promoting innovation. 
 
Intellectual Property Rights 
 
BRUSSELS 00000948  005.2 OF 007 
 
 
---------------------------- 
 
¶23. (U) Pedro Velasco-Martins of DG TRADE reported that negotiations 
on the Anti-Counterfeiting Trade Agreement (ACTA) are progressing 
well and are a good exercise to improve enforcement standards around 
the world.  He said ACTA parties hope to conclude negotiations early 
in 2010.  Velasco-Martins staff explained how the U.S. and EU have 
been collaborating successfully on IPR enforcement for almost four 
years now, with a joint meeting with stakeholders held annually.  He 
stressed that cooperation on third countries, particularly China, 
has been especially useful.  USEU staff reaffirmed the value of 
transatlantic IPR cooperation, noting it is critical to progress on 
innovation.  Stakeholders raised concerns over the lack of 
transparency in ACTA negotiations; Velaso-Martins took issue with 
the idea of non-transparency but said negotiating parties have 
agreed not to make current texts public.  He said the discussions 
will address issues such as the Internet and green technologies in 
later sessions. 
 
Secure Trade/Transport 
---------------------- 
 
¶24. (U) David Dolan, USEU Customs and Border Patrol Attach (CBPA) 
and Gordon Wright with the Commission Taxation and Customs Union 
Directorate General (TAXUD) gave an overview of high-profile 
dialogues relating to the Secure Trade focus in the TEF/TEC.  Dolan 
noted the recent completion of the annual World Customs Organization 
(WCO) Policy Commission and Council sessions, during which the U.S. 
legal requirement for 100 percent radiation detection and imaging 
(scanning) for U.S.-bound maritime containers, to take effect in 
2012, was constructively addressed by numerous delegations, with 
those WCO Members further encouraged to engage the U.S. Congress in 
an appropriate manner on their continued concerns over the 
requirement.  Dolan explained that the Department of Homeland 
Security would continue to work responsibly toward implementation of 
the law, with a view to applying a well established risk management 
approach to the deployments, just as wi`al 
stakeholders noted.S./EUary 2009) as 
the most c`ng key operational, techni 
specified that a k%ontinuor engagement, most noiness community could gain though implementation of 
Mutual Recognition protocols. 
 
Energy and Other Potential TEC Topics 
------------------------------------- 
 
¶26. (U) USEU EMIN noted the near-universal support among 
stakeholders for including energy technologies in the Framework to 
reflect the political priority placed upon this, to provide 
additional impetus for the cooperation and to ensure compatibility 
as both the U.s. and the EU accelerate development of these 
technologies to meet our common climate change objectives.  He noted 
that the previous US Administration had proposed this broadening of 
the Framework, but added that the new one was considering other ways 
of show-casing our cooperation in this field.  He added that in fact 
our cooperation is accelerating, pointing to the recent exchanges 
between the US Department of Energy and the Europeans, including on 
the margins of the March U.S.-EU S&T Agreement Joint Management 
Committee meeting, and underscored that, whatever the arrangements 
to guide this cooperation, the Secretaries, Commissioners and 
Ministers participating in the Transatlantic Economic Council 
meeting may well want to talk about this particularly in the context 
of the significant policy issues raised as we transform our 
societies to low-carbon economies. 
 
BRUSSELS 00000948  006.2 OF 007 
 
 
 
¶27. (U) Addressing the broader question of the Framework and the 
TEC, all participants stressed the importance of having such 
strategic level discussions and of the need to have the process be 
as transparent as possible.  In this context, the audience welcomed 
the detail and depth of the workshops. 
 
High-Level TEC Awareness-Raising Event 
-------------------------------------- 
 
¶28. (U) The day's outreach meetings were capped by a high-level TEC 
awareness raising event featuring speeches by outgoing TABD Co-Chair 
Jurgen Thumann, Enterprise Commissioner Gunter Verheugen, Czech 
Minister for European Affairs Stefan Fule, European Parliamentarian 
Jonathan Evans, Swedish Permanent Representation Ambassador Ulrika 
Barklund Larsson, and USEU Charge Christopher Murray.  TABD EU 
Director Jeffries Briginshaw also briefed the high-level attendees 
on key points from the working sessions earlier in the day. 
 
¶29. (U) Outgoing TABD co-chair (and incoming President of Business 
Europe) Jurgen Thumann praised TABD and other stakeholders for 
organizing the event and persevering with their work to advance TEC 
issues.  Thumann declared that the TEC should focus on four key 
issue areas: 1) fighting protectionism and reaffirmation of the 
importance of open markets; 2) economic crisis recovery and 
collaboration in financial supervision and reform efforts; 3) energy 
and climate cooperation to align our respective carbon markets, 
regulatory policies and energy efficiency efforts; and 4) 
cooperation on promotion of innovation and strong intellectual 
property rights protections. 
 
¶30. (U) European Commission Vice-President and Enterprise 
Commissioner Gunter Verheugen told the audience that the TEC is at 
the heart of U.S.-EU economic cooperation, which in a larger 
political context underpins the primary axis of global stability in 
the 21st century.  He said our joint TEC work is based upon our 
mutual interests and values in raising global prosperity and 
stability, and is reliant upon strong stakeholder input and 
participation.  He is convinced of the Obama Administration's 
commitment to the TEC after his two meetings with NSC TEC Co-Chair 
Michael Froman and President Obama's affirmation of the TEC to EU 
leaders in Prague in April.  Verheugen said the U.S. and EU should 
raise our joint level of ambition for TEC work, making it our 
central platform for economic engagement, focused around the issues 
of economic crisis responses, commitment to free trade, energy and 
climate cooperation, and reduction of transatlantic regulatory 
barriers.  He welcomed the U.S. proposal to strengthen the TEC 
innovation dialogue, said we should broaden TEC cabinet and 
stakeholder participation, and reaffirmed the need to define a 
medium-long term joint TEC workplan. 
 
¶31. (SBU) Czech Minister of European Affairs Stefan F|le stressed 
the importance of giving the TEC more political weight and 
visibility going forward.  He reminded the audience that the 
transatlantic relationship had been a Czech EU Presidency priority, 
and that the TEC acts as a useful framework for encouraging this 
dialogue.  Mr. F|le mentioned how greater political leadership from 
the European Council would help improve upon current TEC efforts. 
 
¶32. (SBU) Outgoing European Parliamentarian and EU Chair of the 
Transatlantic Legislators Dialogue Jonathan Evans, complimented TABD 
and other business organizations for working together in such a 
collaborative manner on TEC issues and avoiding "turf wars." 
Despite the successes of the TEC, Mr. Evans shared his 
disappointment that a June 2009 TEC did not take place.  He said 
that the extended political transition period in the U.S. and EU 
have clearly slowed TEC progress, but underscored the need to 
maintain momentum to keep the TEC alive and effective.  He noted 
that the Obama administration will push for labor interests and 
unions to be represented in discussions.  Evans also raised the need 
for greater involvement of U.S. Congressional representatives in the 
TEC process. 
 
¶33. (SBU) Ambassador Ulrika Barklund Larsson, from the Swedish 
Permanent Representation to the EU, reiterated the priorities of the 
Swedish EU Presidency (economic crisis recovery, climate change, EU 
institutional reform) and the importance of maintaining continuity 
through changes in EU leadership.  She said that Sweden will 
continue to push for strong transatlantic cooperation through the 
TEC and otherwise, and welcomed the fall TEC meeting. 
 
BRUSSELS 00000948  007.2 OF 007 
 
 
 
¶34. (SBU) Charge Murray thanked the TABD and other stakeholders for 
making the TEC a success and for their enthusiastic participation in 
the day's outreach events.  He emphasized how stakeholder input has 
been critical to the U.S. and EU work to improve TEC functioning and 
broaden the issue areas addressed.  He challenged stakeholders to 
keep up their efforts to ensure that the process achieves further 
successes. 
 
Comment 
------- 
 
¶35. (SBU) The TEC stakeholder meetings and high-level speeches 
generated a great deal of positive energy and enthusiasm over the 
two-year old TEC/TEF project.  The events motivated the European 
Commission, which has been engaged in a lengthy internal review of 
its TEC management, to go on the record on progress and key goals. 
Stakeholders had told us progress in key areas has been flagging, 
but were cheered by USEU and Commission optimism over our 
expectations for a successful Fall meeting in Washington.  The 
events, and USEU's informal updates of all major TEF projects, went 
far toward meeting stakeholders' longstanding demands for 
transparency.  Also notable were the strong and positive 
participation in the event by the Transatlantic Consumer Dialogue, 
and the positive reaction to the USEU proposal to restructure our 
TEF innovation project and establish a U.S.-EU innovation working 
group. 
 
¶36. (SBU) Stakeholder clearly still hope for additional clarity on 
U.S. TEC priorities, and a better sense of the Administration's 
goals for the Fall TEC and beyond.  USEU is ready to work with DC 
and EU counterparts toward meeting such goals and establishing a 
longer-term workplan for the TEF and TEC, which will be critical if 
this mechanism for transatlantic economic integration, 
competitiveness and growth is to reach its full potential. 
 
MURRAY