US embassy cable - 03ROME5184

C O N F I D E N T I A L  ROME 005184 
 
SIPDIS 
 
 
E.O. 12958: DECL: 11/16/2013 
TAGS: PREL, PHUM, PARM, SMIG, TSPL, TSPA, ETRD, CH, IT, EUN, HUMAN RIGHTS 
SUBJECT: ITALY ON THE SIXTH EU-CHINA SUMMIT AND BILATERAL 
TALKS: FOCUS ON TRADE AND SECURITY 
 
REF: BEIJING 16134 
 
Classified By: POL M/C T. Countryman for Reasons 1.5 (b) and (d). 
 
1. (U) This cable contains an action request for EAP and 
EUR/ERA. Please see paragraph 11. 
 
2. (C) Summary: Expanding trade between the EU and China, the 
EU's continued arms embargo and North Korea topped 
discussions at the October 30 EU-China Summit in Beijing. The 
EU and China signed the Galileo Satellite Navigation 
Cooperation agreement, initialed the Authorized Destination 
Status (ADS) agreement and committed to increasing economic 
ties through greater trade and investment. The Chinese 
pressed for a lifting of the EU arms embargo arguing that the 
embargo was an anachronism. Berlusconi rejoined that lifting 
the embargo would be difficult without improvements on human 
rights issues. The Chinese refused any such linkage and made 
no concessions or commitments on human rights. EU leaders 
praised China's evolving role in the region's security and 
its work in convincing the DPRK to commit to multilateral 
talks. End summary. 
 
3. (C) We discussed both EU and bilateral portions of 
Berlusconi's China trip with Berlusconi diplomatic advisor, 
Gianpaolo Scarante and MFA Asia Desk Officer, Silvia Chiave. 
Berlusconi participated in the Sixth EU-China Summit in 
Beijing on October 30, a Sino-Italian Bilateral meeting on 
October 31 and a meeting with Shanghai business community 
leaders on November 1 in Shanghai. This was the first time 
that PM Berlusconi traveled to China and the new Chinese 
leadership's first direct encounter with the EU's senior 
leadership. Our interlocutors reported that the new Chinese 
leadership seems dedicated and more pragmatic to solving 
issues and playing a greater international role. They 
stressed Italy's general satisfaction with the Summit and the 
bilateral meetings and confirmed that an EU Troika, headed by 
Guido Martini, MFA Director General for Asia and the Pacific, 
is set to visit Pyongyang, December 9-11. This trip provides 
the USG an opportunity to influence EU Troika participants 
(see action request in paragraph 11). 
 
EU-China Summit 
---------------------- 
Fair Trade and Economic Cooperation 
------------------------------------ 
4. (C) The summit focused on trade and commerce and was 
highlighted by the signing of the Galileo Satellite 
Navigation Cooperation agreement and the initialing of the 
Authorized Destination Status (ADS) agreement that will 
facilitate Chinese group tourism to the EU. 
 
5. (C) The EU expressed concern over the valuation of the 
Chinese currency versus the Euro as well as fair trade 
practices and the need to have greater economic cooperation. 
Chinese leaders said they would not devalue their currency 
but expressed a desire to search for a more reasonable 
mechanism by which to ensure more equity and make an effort 
to respect WTO regulations in order to achieve greater 
economic growth and trade. 
 
EU Arms Embargo 
------------------------ 
6. (C) The Chinese pressed hard for lifting the arms embargo, 
stating that the Tiananmen incident was long past and that 
China's enhanced regional role and importance merited lifting 
the embargo. Chiave stated that some EU countries (which she 
would not specify) are in favor of entertaining this idea but 
the majority are against it. When Berlusconi tried to link 
improvements in human rights to a review of the EU embargo 
policy the Chinese flatly refused any such linkage. 
Berlusconi told the Chinese that without improvement in human 
rights it would be difficult to justify lifting the embargo 
to the European public. Chiave indicated the issue likely 
would resurface prior to EU enlargement, reiterating the 
favorable stance of some EU states especially if there are 
improvements in human rights. 
 
One-China Policy 
----------------------- 
7. (C) The Chinese also pressed for a strengthened EU 
one-China policy by soliciting a formal statement in which 
both Taiwan and Tibet would be included. Chiave stated that 
this was one of the opening issues and that the EU was 
surprised by the fact that the Chinese appeared to be making 
 
 
a non-issue into a provocation. (Note: The Chinese raised 
revision of the EU's one-China policy again during 
Berlusconi's bilateral discussions, but Italy refused to 
consider it. Interestingly, the Chinese did not raise the 
Dalai Lama's upcoming visit to Italy at either the summit or 
the bilateral. End Note) 
 
Human Rights 
---------------------- 
8. (C) In addition to the Tibet issue, the EU voiced concerns 
over the general human rights situation in China. Stating 
appreciation for EU concerns, the Chinese made no commitments 
or concessions. They clearly expressed the need to maintain 
stability and continue with economic development in order to 
ensure adequate living standards for their people. They 
further expressed their position to keep human rights issues 
apart from political and economic issues. 
 
North Korea 
-------------------- 
9. (C) The EU praised the more positive role China is taking 
as a major player in the region's security.  China is working 
to convince the DPRK to commit to multilateral talks and make 
the Six Party Talks proceed with the EU playing a neutral 
role and developing a level of trust with the DPRK. The DPRK 
will continue insisting on 'simultaneous actions' regarding 
the US which will present a major challenge. However, this is 
an opportunity for China as well as the EU to demonstrate 
that they are global players and can fill an important role 
in affecting regional as well as international security 
issues. 
 
10. (C) Relating to the EU role as a neutral participant in 
the Korean peninsula, Chiave confirmed that an EU Troika, at 
the regional director level headed by Guido Martini, MFA 
Director General for Asia and the Pacific, is set to visit 
Pyongyang, December 9-11. She was not sure with whom the EU 
officials will meet but stated that the goal is to send a 
clear message on a greater commitment to Six Party Talks, 
denuclearization and reconciliation with South Korea. She 
stated that the EU and partners need to make the DPRK 
understand the need for stability in the region and the 
importance of adherence to international commitments. 
 
11. (C) Embassy Comment/Action Request: The EU-Pyongyang 
dialogue, December 9-11, offers the USG an additional 
opportunity to influence EU Troika participants. Post 
requests background and points be sent to USEU Brussels and 
other EU member state Embassies to reinforce those offered 
during U/S Boniver's early November meetings in Washington. 
 
Italy-China Bilateral 
------------------------- 
12. (C) Aside from an attempt to include Tibet and the 
one-China policy issue in the agenda, bilateral talks focused 
on trade and commerce. Echoing the previous day's EU-China 
summit declarations, Berlusconi expressed a cooperative 
approach towards economic relations between the two nations, 
reassuring the Chinese that Italy would not impose bilateral 
protectionist tariffs and urging cooperation and goodwill 
under WTO regulations. Berlusconi stated that WTO provided 
for a level and fair trading regime which, if not adhered to, 
carried its own sanctions. Parties exchanged ideas on how to 
increase Italian investment and deal with the trade 
imbalance. They also agreed to expand the Tavolo Cina, an 
existing business-focused roundtable supported by the Italian 
MFA, into a political committee with an annual ministerial 
meeting to review progress; committed to a bilateral seminar 
on reciprocal investment that will be held in Italy in Spring 
2004, and agreed to establish Italian trade offices 
(Sportello Unico) housing representatives from Italian 
commercial and government offices to facilitate Italian 
entrepreneurial projects in Beijing and Shanghai. They also 
discussed the possibility of opening cultural centers to 
teach Italian language and culture as well as Italian expo 
centers. 
 
Berlusconi and the Business Community 
--------------------------------------------- ---- 
13. (C) On November 1, PM Berlusconi met with Italian and 
Chinese business leaders in Shanghai. He reiterated the 
points of previous days and, acknowledging the economic boom 
in China, pointed to the wide availability of opportunities 
for Italian entrepreneurs. Berlusconi described China as an 
open, large and well-to-do market eager to embrace and buy 
 
 
Italian products and urged Italian entrepreneurs to get 
organized, invest and begin doing business in China, 
especially in view of the upcoming 2008 Olympics in Beijing 
and the 2010 World Expo in Shanghai. A challenge to small and 
medium-sized Italian firms competing against larger European 
firms, Berlusconi called to entrepreneurs to organize and 
group resources in an effort to compete successfully. 
SKODON 
 
 
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	2003ROME05184 - Classification: CONFIDENTIAL