VZCZCXRO7095
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSL RUEHSR
DE RUEHVI #1115/01 2451504
ZNR UUUUU ZZH
R 021504Z SEP 09
FM AMEMBASSY VIENNA
TO RUEHC/SECSTATE WASHDC 3245
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUCNMEM/EU MEMBER STATES

UNCLAS SECTION 01 OF 02 VIENNA 001115 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD EIND BEXP ECON AU
SUBJECT: AUSTRIAN DIRECTOR OF FOREIGN TRADE POLICY EXPRESSES 
INTEREST IN REVIVING INFORMAL COMMERCIAL TALKS 
 
¶1.  (SBU) Summary:  Josef Mayer, Austrian Ministry of Economics 
Director of Foreign Trade and EU Integration, said he would like to 
revive informal commercial talks with the U.S. and hopes to pursue 
the subject in Washington in October. He also cited the Ukraine as 
the next market with great potential for investment.  He opined that 
it would be difficult to gain approval in the EU for Turkish entry, 
partly because of strong public opposition but also because Turkey's 
size would make entry complicated for an already overburdened 
organization.  On bilateral trade issues, Mayer said pharmaceutical 
negotiations would need a mediator who could work well with U.S. 
companies, and predicted that although bilateral trade had plunged 
because of the decline in the auto industry, the environmental 
industry showed promise for greater cooperation.  Finally, Mayer 
regretted the "emotional" Austrian attitudes towards GMOs and the 
EU, citing the need to combat isolationism in the popular media. 
End summary. 
 
A Geographical Overview 
----------------------- 
 
¶2.  (U) In an August 27 courtesy call by the DCM, Mayer began with a 
discussion of the western Balkans, reviewing the GoA's efforts and 
praising the U.S.'s long-term engagement in the region.  He 
considered centuries-old historical ties still relevant in 
determining how individual EU members relate to particular Southeast 
European countries.  Mayer felt Ukraine, despite its difficulties 
now, still possessed great potential for future investment.  A key 
factor would be achieving both political and economic stability 
throughout the area. 
Turkey's Candidacy, EU Organizational Problems 
--------------------------------------------- - 
 
¶3.  (SBU) Looking at Turkey's EU candidacy, Mayer noted that some 
Austrians view U.S. endorsement for Turkish entry as a plot to 
weaken or dilute the EU.  Popular opinion remains strongly against 
Turkish membership, and Mayer predicted that in a referendum 
Austrian and most EU voters would oppose entry.  Turkey, by virtue 
of its size and political issues, would present unique problems for 
entry, and he defended the extra steps which the EU was requiring 
for Turkey to become a member.  Speaking on the EU as an 
organization, Mayer opined that the structure was designed for 6-8 
members, and ill-suited for its current 27.  Subsidies remain a 
particular point of contention, as older EU member states such as 
France and Spain were reluctant to share with the new member states. 
 DCM encouraged Austria to move forward with an open door to Turkey, 
emphasizing the benefit of the accession process for both Turkey and 
current EU members. 
 
Bilateral Trade Issues 
---------------------- 
 
¶4.  (SBU) While the EU understood the necessity for U.S. security 
controls at ports of entry, Mayer warned that there needed to be a 
balance between security and obstructionism that could be construed 
as a barrier to trade.  On the pharmaceutical pricing dispute, Mayer 
predicted that it would be essential to have a mediator on good 
terms with the pharmaceutical industry.  (Note: Previously Mayer 
himself has mediated between the Austrian insurance system and drug 
companies.)  DCM emphasized that question was not only fair trade 
practices but also making full range of medicines available to 
Austrian patients.  Mayer acknowledged that U.S. industry perceived 
the Austrian ministries as low-balling its pricing proposals. 
However, the U.S. side would have to realize that an agreed pricing 
scheme would have to satisfy the social insurance system and Finance 
Ministry as well as the Health Ministry. 
 
¶5.  (U) On alternative energy, Mayer was more upbeat.  The change in 
U.S. administrations had brought a fresh attitude towards 
alternative energy, and the U.S. could use some renewables, such as 
wind power, at a scale unmatched in Europe.  On the other hand, he 
felt biomass technology was an EU strength.  DCM noted that the U.S. 
had many good stories to tell in terms of energy efficiency and 
green technology, and hoped for greater cooperation with Austria in 
this area. 
 
¶6.  (SBU) Bilateral trade, largely dependent on trade in auto 
machinery, had plunged as a result of the decline in the auto 
industry, he noted.  Despite the presence of U.S. producers in 
Austria, particularly in Styria, U.S. cars still suffered from an 
image problem in Europe owing to their high CO2 emissions, perceived 
poor technology, and poor resale value.  Mayer added that the "Buy 
American" legislation had created a negative impression and could 
invite EU retaliation.  DCM emphasized importance of keeping 
communication when differences arise and in turning to bodies like 
WTO to help sort them out. 
 
GMOs and Support for the EU 
--------------------------- 
 
¶7.  (SBU) Speaking at some length on genetically modified products 
(GMOs), Mayer reflected that the debate over GMOs in Austria had 
 
VIENNA 00001115  002 OF 002 
 
 
been taken over by emotional appeals, blaming among others the 
influential newspaper "Kronen Zeitung," which had degraded the 
debate to a simple "good versus evil" confrontation.  Mayer 
supported reasonable efforts to offer consumers GMOs side-by-side 
with bio products.  Austrian propagandizing for bio products, Mayer 
felt, arose from Austrian isolationist attitudes and a desire to 
dictate virtue to others.  He cited the Austrian attempt to use 
sulfur issues to prevent the Czech upgrading of the Temelin nuclear 
power plant as another example of this mindset at work. 
 
¶8.  (SBU) This mindset also has had spillover effects in Austrian 
attitudes toward the EU.  Mayer noted that 2/3 of Austrian voters, 
including even the now EU-phobic Kronen Zeitung, supported the 1995 
referendum on membership.  After becoming a member, Austrians had 
felt uncomfortable with "being told what to do."  The public had 
been poorly informed about the EU, and part of the problem was that 
Austria and other EU nations only sent second-rate politicians to 
serve the EU, never the top ones.  The only solution to quelling 
public fears was by continuing to listen to the public, such as what 
FM Spindelegger had done on his listening tour in the provinces. 
 
¶9.  (U) Mayer will travel to Washington October 19-21 for meetings 
on trade, with one of his objectives being to restart the Informal 
Commercial Exchange (ICE) talks.  DCM said we would welcome the 
opportunity to coordinate and try to ensure he had good meetings 
during this time. 
 
¶10.  (SBU) Comment: Whether by coincidence or design, Mayer's 
conversation started on common points of agreement before going to 
some of the more contentious issues, though his tone remained genial 
throughout.  His choosing to discuss geopolitics first perhaps 
reflected the importance he put on political issues and the 
importance of U.S. engagement in the region.  Mayer took care to 
explain issues which he felt may be less comprehensible to an 
American audience, particularly Austrian attitudes toward GMOs and 
the EU.  Mayer appears to be encouraged by the potential of 
collaboration on environmental issues with the new administration. 
Given his pro-American attitude, it is worth noting those issues on 
which Mayer expressed concern for a trade conflict, namely port 
security controls and the "Buy American" clause.  If ICE talks do 
restart, it will be useful to have a specific agenda, covering many 
of the issues Mayer discussed in this meeting.  He is an influential 
figure on these issues in Austrian policy making and we encourage 
Washington interlocutors to make time to see him.  End comment.