VZCZCXYZ0006
PP RUEHWEB

DE RUEHUP #0805/01 3131011
ZNR UUUUU ZZH
P 091011Z NOV 09
FM AMEMBASSY BUDAPEST
TO RUEHC/SECSTATE WASHDC PRIORITY 4639
RUCPDOC/USDOC WASHINGTON DC PRIORITY
INFO RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC

UNCLAS BUDAPEST 000805 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/CE JAMIE MOORE, COMMERCE FOR ITA/MAC SILVIA 
SAVICH. PLEASE PASS TO JEFF HOVENIER AT THE NSC. 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON EINV KGHG HU
SUBJECT: COMMERCE SECRETARY'S MEETING WITH HUNGARIAN PRIME 
MINISTER 
 
REF: BUDAPEST 737 
 
¶1. (SBU) Summary.  The U.S. Secretary of Commerce Gary Locke 
met with Prime Minister Gordon Bajnai on October 20 in 
Budapest.  Expressing USG appreciation for the alignment of 
shared values and interests with Hungary and its support in 
Afghanistan, the Secretary complemented the PM for his 
efforts to address the current economic crisis.  Bajnai noted 
Hungary's responsibility to share burdens in an alliance. 
Addressing the economic situation, he said his government has 
the "virtue of necessity" to take tough measures. 
Referencing the Climate Change conference, the PM said the EU 
is looking to President Obama to ensure we achieve something 
positive in Copenhagen.  Turning to WTO negotiations, Bajnai 
suggested that perhaps a new category is needed for those 
"developing countries" such as China who use the moniker as 
justification for doing less.  Bajnai also mentioned the 
Vice-President's weekend call, saying he hopes to accept the 
invitation to visit Washington in November or December. 
Finally, the Secretary raised the need to improve Hungary's 
business climate and a sensitive advocacy case.  End summary. 
 
------------------ 
HELL OF A STRUGGLE 
------------------ 
 
¶2. (SBU) Secretary of Commerce Gary Locke, accompanied by the 
Charge, Commercial and Political Officers, met with Hungarian 
Prime Minister Gordan Bajnai in Budapest on October 20. The 
Secretary began the meeting by expressing USG appreciation 
for the relationship with Hungary, underscoring the alignment 
of shared values and common interests and thanking Prime 
Minister Bajnai for Hungary's support in Afghanistan and 
acceptance of a Guantanamo detainee.  The Secretary 
complemented Bajnai for his efforts to stabilize the 
Hungarian economy - with much to be proud of - noting that 
western observers view his efforts as very positive. 
 
¶3. (SBU) Responding, on Afghanistan, Bajnai said that "we 
have responsibility to take on burdens, not just benefits of 
our alliance membership."  Turning to economic issues, he 
noted that while last year Hungary was viewed "as the next 
Iceland, our situation is much improved, but our efforts 
still require great sacrifice from our people."  The PM 
commented that he was in France over the weekend to meet with 
President Sarkozy, and recently in the UK to meet with Prime 
Minster Brown.  During both visits he said he received 
positive support, but remarked that addressing the economic 
situation "is a hell of a struggle." 
 
--------------------------------- 
ADVOCATING FOR OPEN TRADE MARKETS 
--------------------------------- 
 
¶4. (SBU) The Secretary went on to say that trade 
protectionism is not good for anyone and invites retaliation 
and trade wars where all sides lose.  He noted the need to 
stimulate our domestic economies without protectionism. 
Bajnai, noting that 80% of Hungary's GDP comes from exports, 
said that Hungary is proud to have an open market.  The 
Secretary commented that Hungary is clearly doing something 
right, commenting on the large amount of industrial 
production, such as the new Mercedes plant and other 
automotive production.  Bajnai explained that investment in 
Hungary was not about cheaper labor, but the quality of the 
workforce, the quality highways, other infrastructure, and 
the country's ability to fast track decisions and decrease 
bureaucratic obstacles.  In addition to automotive production 
and other high tech electronics such as Blackberries and 
other telecom equipment, Bajnai said Hungary is a large hub 
for R&D.  Secretary Locke stated his belief that the key to 
recovery is an educated workforce, and noted that the U.S. 
needs to do more in this realm as part of a long-term 
strategy, commenting that many in the business community have 
an interest in high academic standards. 
 
------------------ 
COPENHAGEN CLIMATE 
------------------ 
 
¶5. (SBU) Turning to the upcoming Climate Change conference in 
Copenhagen, Bajnai mentioned that he met last week with the 
Chinese Vice-Premier, who commented that they were proud of 
what the Premier had offered recently at the UN.  That said, 
Bajnai believes that the Chinese are determined to do 
something but still claim they "are an emerging economy" and 
will raise issues of development.  He suggested that perhaps 
 
we may need a new category for nations such as China, as we 
can't let them use the "developing country" rationale as a 
reason to be weak on climate change.  The Secretary agreed 
that the U.S. must dramatically reduce greenhouse gas 
emissions, but China has an opportunity save the planet or be 
blamed for ruining the climate. 
 
¶6. (SBU) Continuing, the Secretary noted that China spends 
USD 50 million per hour in R&D for alternative energy needs, 
stating that the United States cannot wait until 2050 to 
decrease CO2 emissions.  He commented that in addition to 
China, countries such as India and Brazil must also move 
forward aggressively, and we need to find ways to help them 
move forward in an environmentally friendly manner.  He 
mentioned the President's wish to provide research grants for 
clean energy and energy efficiency, and noted that to attract 
companies, it is important to have a clean environment and 
air. 
 
¶7. (SBU) The PM expressed hope that the President will move 
the climate change policy forward as "the EU is holding its 
breath that the President will come up with something clear 
to help ensure that we achieve something at Copenhagen." 
Referencing his recent meeting with Sarkozy - who, according 
to the PM, pointedly emphasized that the "EU needs to carry 
the flag" - Bajnai said Copenhagen needs some sense of 
achievement or we will miss an important opportunity and the 
world community will be in trouble." 
 
--- 
WTO 
--- 
 
¶8. (SBU) In response to the PM's requested views on the WTO, 
the Secretary responded that the Doha round is very difficult 
but the U.S. would like it to be successful.  What is needed 
is for more advanced developing countries to open their 
doors, citing Brazil, India and China as examples, suggesting 
that China cannot continue to say that it is still a 
"developing country."  Bajnai concurred, noting that some 
members of the G20 are categorized as "still developing" and 
perhaps a new category is needed for them, as well. 
 
------------------------------- 
TRANSPARENCY AND PREDICTABILITY 
------------------------------- 
 
¶9. (SBU) In closing, the Secretary underscored the importance 
to investors of transparency, predictability, and the rule of 
law to ensure their investments are protected.  Noting the 
PM's efforts to address these issues, the Secretary, 
specifically raised the Slager Radio tender (reftel), 
expressing hope that Bajnai will continue his efforts to deal 
with transparency and corruption.   In response, Bajnai said 
that while he has no legal standing to interfere in the radio 
tender decision, as the governing body is not a government 
entity, he never-the-less is concerned and is underscoring 
the need for transparency with various parties involved in 
the decision.  Continuing, the PM said he plans to present to 
Parliament in next two weeks a new public procurement law 
proposal and party financing reform legislation, using his 
last six months in office to push reforms, commenting that 
"we have the virtue of necessity." 
 
---------------- 
WASHINGTON VISIT 
---------------- 
 
¶10. (SBU) Bajnai also took the opportunity to mention the 
Vice-President's call to him on October 17, suggesting more 
regular contact, as well as the invitation to visit the White 
House.  Bajnai said, that while he has no specific date yet 
planned, he considers November or December as most likely for 
his visit to Washington. 
 
¶11. (U) The Department of Commerce clears this cable. 
LEVINE