VZCZCXRO0156
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DE RUEHBS #1420/01 2951322
ZNR UUUUU ZZH
P 221322Z OCT 09 ZDK CTG RUEHLO 6802 2991340 SVC
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC
RHEHNSC/NSC WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHDC
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE

UNCLAS SECTION 01 OF 03 BRUSSELS 001420 
 
SENSITIVE 
SIPDIS 
 
NSC FOR MICHAEL FROMAN, DOUG BELL, KRISTINA KVIEN 
STATE FOR E - ROBERT HORMATS 
DOC FOR DEPUTY SECRETARY HIGHTOWER 
PLEASE PASS TO USTR - SENIOR ADVISOR PETER COWEY 
OMB FOR OIRA - CASS SUNSTEIN AND MICHALE FITZPATRICK 
DHS FOR SECRETARY NAPOLITANO 
 
NOT FOR INTERNET DISTRIBUTION 
 
E.O. 12958:  N/A 
TAGS: ECON PREL ETRD ENRG ECPS SENV EUN
SUBJECT: SCENESETTER FOR TRANSATLANTIC ECONOMIC COUNCIL MEETING 
 
BRUSSELS 00001420  001.12 OF 003 
 
 
¶1. (SBU) SUMMARY.  The fourth meeting of the U.S.-EU Transatlantic 
Economic Council on October 27 will cover a solidagenda with our 
largest economic partner.  The meeting will feature discussions on 
G20 commitments and our cooperation in financial reform, closer 
U.S.-EU regulatory cooperation in the context of the new U.S. 
approach to regulation, a new high-level innovation dialogue, and 
our ongoing work programs in IPR, investment, secure trade and other 
areas.  The meeting will be bracketed by sessions with business, 
consumer and labor stakeholders.  A five-member European Parliament 
group, led by Elmer Brok, the German chair of the Parliament's U.S. 
delegation, will also meet in Washington next week with the U.S. and 
EU TEC co-chairs.  A successful meeting will set the stage for a 
more ambitious agenda with a new Commission in 2010.  END SUMMARY. 
 
CONTEXT OF OCTOBER TEC MEETING WITH OUTGOING EU COMMISSION 
--------------------------------------------- ---------- 
 
¶2. (SBU) The fourth meeting of the Transatlantic Economic Council 
(TEC), on October 27, comes in the context of a global recovery 
which, though well along in the U.S., is just beginning to take hold 
in Europe: the UK, French and German economies are growing, while 
Spain, Italy, Ireland and many Central European states remain in 
recession.  The TEC also occurs as European fears have risen over 
the Doha WTO round and the December UN Climate Change Conference in 
Copenhagen. 
 
¶3. (SBU) The current European Commission has reached the end of its 
five-year mandate and will change shortly (depending on the timing 
of final ratification by the Czech Republic of the EU's Lisbon 
Treaty).  The changeover could occur in January 2010.  Commission 
President Barroso and perhaps a third of the current Commissioners 
will remain in office, however, so while most Commissioners are 
leaving, the entire Commission will retain significant continuity. 
Individual Commissioners' portfolios may change. 
 
¶4. (SBU) The Commission and Swedish EU Presidency have pushed for an 
ambitious October TEC meeting that will do several things: 
 
a) emphasize more broad strategic discussions on issues such as 
post-global crisis cooperation on economic reform/implementing G20 
commitments, avoiding protectionism, and collaboration to move 
toward a clean low carbon economy; 
b) increase our regulatory cooperation to reduce unnecessary 
regulatory divergences and further integrate our economies; 
c) retain the focus in the TEC on overcoming barriers to 
transatlantic trade and investment and on delivering concrete 
results; and 
d) avoid use of the TEC to settle trade disputes. 
 
¶5. (SBU) The EU TEC co-chair, Commission Vice President and 
Enterprise and Industry Commissioner Gunter Verheugen (Germany), 
wants to maximize the TEC's reach and achievements as part of his 
own ten-year legacy as a Commissioner.  This is particularly so 
given that his record as co-chair is viewed as mixed, especially 
 role in the EU's G20 Qarticipation and will 
remain in the next Commission; 
 
 
BRUSSELS 00001420  002.12 OF 003 
 
 
Neelie Kroes (Netherlands), Competition, a trans-atlanticist who has 
played a key role in evaluating EU member state supports to 
financial institutions and other firms in the wake of the economic 
crisis (and who has also imposed hefty fines on Microsoft, Intel and 
major EU cartels, but hopes to reach a final agreement with 
Microsoft before she leaves the Commission); 
 
Meglena Kuneva (Bulgaria), Consumer Protection, who has become a 
strong ally on pro-consumer measures and is quite popular in Europe, 
but who may not be in the next Commission; and 
 
Laszlo Kovacs (Hungary), Customs and Taxation, who will leave the 
Commission. 
 
¶7. (SBU) In addition, Swedish Trade Minister Ewa Bjorling will 
attend for the Swedish EU Presidency, along with other Swedish 
officials and two subcabinet-level officials from the future Spanish 
EU Presidency.  Other Commission officials will be present as well. 
 
EU ATTENDEES' EXPECTED ROLES DURING TEC MEETING 
--------------------------------------------- -- 
 
¶8. (SBU) The Commission has retained the dominant role for the EU in 
the TEC, relegating the Presidency country to a supporting role. 
Commissioners will take leading roles on the agenda points covering 
their respective portfolio areas as follows: 
 
WORKING GROUP REPORTS TO THE TEC.  During the report from the High 
Level Regulatory Cooperation Forum, Commissioner Verheugen will 
outline his interest in pursuing new approaches to mutual 
recognition with the U.S. wherever feasible.  Verheugen and Kovacs 
likely will press the U.S. for action on our 100 percent cargo 
scanning legislative requirement, and Verheugen is expected to ask 
about the status of the OSHA response to the Request For Information 
(RFI) on the proposal that OSHA permit the use of a Suppliers' 
Declaration of Conformity (SDoC) for certain low voltage electrical 
equipment. 
 
FINANCIAL MARKETS DISCUSSION.  Commissioner Almunia likely will lead 
here, and emphasize the need for continued coordination to implement 
our G20 commitments, including on U.S. and EU parallel financial 
regulatory and reform efforts, for strong U.S. action to extend 
supervision to all parts of the financial sector, and to coordinate 
implementation of exit strategies as recovery advances. 
 
INNOVATION.  Commissioner Verheugen should lead here, to stress the 
vital importance of promoting EU and U.S. innovation to enhance our 
economic competitiveness, welcome the U.S. initiative for a 
bilateral innovation dialogue, and describe EU interest in a 
productive discussion around concrete projects in specific sectors. 
The Swedes and Spanish may both chime in supporting the launch of 
the dialogue. 
 
REGULATORY APPROACHES.  Verheugen will again emphasize his interest 
in exploring new approaches to mutual recognition with the U.S. and 
in "upstream" cooperation to avoid future regulatory divergences in 
emerging technology areas such as nanotech and clean energy 
efficient technologies.  Kuneva should highlight our deepening 
cooperation on product and toy safety, and Vassiliou may stress her 
interest in a broader approach to addressing our thorny trade 
problems on food safety, as she foreshadowed in meetings this summer 
with USTR Kirk and USDA Secretary Vilsak. 
 
LUNCH DISCUSSION.  The Principals'-only lunch discussion is the 
venue for addressing broad strategic issues - with the focus on 
ensuring coherence in our response to the economic crisis.  The EU, 
for its part, wants to discuss how we will work together under new 
international arrangements like the G-20, the need for coordination 
on financial reform, and the importance of a successful outcome to 
the WTO negotiations.  Kroes may emphasize her role in reviewing the 
many EU state aid packages for the financial sector, and her 
determination to prevent national responses to the financial crisis 
that are self-focused and have the effect of undermining the EU 
internal market.  Kovacs will suggest enhancing U.S. and EU 
cooperation on addressing problems with tax havens ("good governance 
in tax matters"), including with respect to information sharing. 
 
BRUSSELS 00001420  003.12 OF 003 
 
¶11. (SBU) We can, and should, get more out of the TEC.  This year 
has clearly ben a transition, as both we and the EU have responded 
to the economic crisis and as the EU oes through significant 
political changes wit( the election of a new Parliament, a new 
Commission and major institutional changes with the etryhowever, presents a new 
opportunity to Qse the "intergovernmental cabinet meeting" nature of 
the TEC to ensure the EU works with us in the G-20, in promoting 
reforms in major emerging economies, in adjusting to the 
transformation inherent in our shifts to low-carbon economies. 
 
¶12. (SBU) The TEC has inherent weaknesses on the EU side: member 
states are not as actively involved as they should be, and the 
Commissioner co-chair has no formal power to compel action by other 
Commissioners on issues that fall under their purview but are on the 
TEC/Framework agenda.  President Barroso's repeated declaration of 
his commitment to the TEC and Framework, perhaps offers an opening 
to help strengthen EU TEC management under the new Commission.  The 
November 3 U.S.-EU Summit might be an opportunity to express U.S. 
willingness to work with the EU on ways to improve the TEC's 
functioning and effectiveness in the future.  This could help 
prepare the way for a more ambitious TEC meeting in 2010 with a new 
European Commission. 
 
MURRAY