US embassy cable - 04LJUBLJANA59

UNCLAS  LJUBLJANA 000059 
 
SIPDIS 
 
 
SENSITIVE 
 
DEPT FOR EUR/NCE 
DEPT PLEASE PASS TO USTR 
 
E.O. 12958: N/A 
TAGS: ETRD, SI, WTO 
SUBJECT: SLOVENIA: ZOELLICK'S LETTER: "CONSTRUCTIVE AND 
PRAGMATIC" 
 
REF: A. SECSTATE 06662 
 
     B. LJUBLJANA 030 
 
Sensitive but Unclassified.  Please protect accordingly. 
 
1. (SBU) On 20 January, Econoff and Econ Specialist followed 
up an earlier conversation with Dmirtij Grcar, State 
Undersecretary for Multilateral Affairs at the Ministry of 
the Economy, examining Ambassador Zoellick's letter to his 
ministerial counterparts (ref A).  Reaching into his drawer 
and pulling out the letter with notes scribbled on the 
margins, as well as a five page summary of points, Grcar 
proceeded to explain his views.  He noted that he was 
"surprised" by the European Commission's comments on the 
letter thus far.  "I am surprised that the Commission is 
surprised that a letter came, but also by its overall 
lukewarm reception of the proposals included."  Grcar credits 
the Commission's tepid reaction to the letter's content to a 
"concern that the U.S. is backtracking from the joint 
agreements made prior to and during Cancun."  The Commission 
will continue to hold fast to the notion of the Singapore 
issues because it has to show something in return for making 
agricultural concessions, Grcar commented.  Gcrar was not 
forthcoming, however, sharing the Commission's view in light 
of the missive.  "The Commission does not allow any 
discussion about tactics and strateg," Grcar said. 
 
2.  (SBU)  For his part, Grcar dscribed the letter as 
"constructive and pragmati" considering that many government 
officials andtrade observers were pessimistic about this 
years trade discussions as a result of the Cancun debace, 
U.S. elections, and EU enlargement.  "The leter is very 
positive because it lays out a vision placing the most 
contentious issue -- agricultue -- at the top of the list. 
There is no doubt tat we have to deal with agricultural 
issues if we want to move the trade agenda forward," Grcar 
noed.  He was in complete agreement with the letter' call 
to support and to promote "South-South" trde and to increase 
the participation and the invlvement of capitals in the 
process.  In his view, the letter fails to address the type 
of "defensie mechanisms" allowable as trade restrictions 
diappear; the manner by which food assistance progras may 
be conducted; and, a mechanism to phase ou and to deal with 
export grants.  He was quick to point out, however, that 
those are issues that my be engaged upon once negotiations 
get back on rack.  The re-start of negotiations is the key. 
rcar was adamant that a return to the negotiation table was 
vital, but also recommended that the "important world trade 
players" devise a "manageable mechanism" to ensure the 
progress of the Doha Development Agenda (DDA), without 
falling victim to "single-issue" interests. 
 
3.  (SBU)  Grcar was highly critical of the current WTO 
leadership, remarking that it is imperative that the 
Secretary General act as a catalyst and earn the respect of 
 
SIPDIS 
large and small countries alike.  Although not openly 
advocating for the current WTO Secretary's resignation, Grcar 
contrasted the work done by previous GATT and WTO 
Directors-General who "were unwilling to succumb to pressures 
and kept the discussions alive."  Not only does Grcar see the 
need for a more dynamic Secretary, but also advocated 
strongly in favor of reforming the institution's 
policy-making structures.  "Cancun proved that we need to 
reform the WTO policy making mechanism.  There are countries 
that come to the table with serious offers and ideas, while 
there are others, that due to their limited capacity, cannot 
keep up and adjust to changing situations rapidly. 
Overwhelmed, these countries proceed to block any measure -- 
no matter what it may be -- because they cannot follow and 
understand the arguments and proposals."  He suggested that 
the WTO establish working groups to facilitate discussions 
and negotiations.  Upon reaching agreement, the working group 
would present the results to the entire membership for 
further action.  In Grcar's view, the WTO would "cease to 
become relevant" if it could not undertake and complete 
"serious negotiations." 
 
4. (SBU) COMMENT:  Grcar's positive reaction to Zoellick's 
letter reflects the importance the GoS places on developing 
international trade in a multilateral framework, and 
Slovenia's traditional "bottom line approach."  Grcar's calls 
for an active WTO leadership, a working group arrangement, 
and a concrete agenda embody the Slovenes' desire to 
reinvigorate international trade talks.  Because of 
Slovenia's dependency on international trade and its 
commitment to multilateral fora, we can expect the GoS to be 
receptive and supportive of initiatives and measures 
fomenting trade and empowering multilateral institutions as 
long as it doesn't have to lock horns with the European 
 
 
Commission.  END COMMENT. 
YOUNG 
 
 
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