US embassy cable - 04THEHAGUE2462

C O N F I D E N T I A L SECTION 01 OF 02 THE HAGUE 002462 
 
SIPDIS 
 
E.O. 12958: DECL: 09/26/2014 
TAGS: PREL, PARM, MARR, CH, NL, EUN 
SUBJECT: EU CHINA ARMS EMBARGO:  VADM METZGER/DAS SUCHAN 
MEETING WITH GONL 
 
REF: A. THE HAGUE 1846 (NOTAL) 
     B. THE HAGUE 2074 (NOTAL) 
 
Classified By: CLASSIFIED BY DEPUTY CHIEF OF MISSION DANIEL RUSSEL FOR 
REASONS 1.4 (B AND D) 
 
1. (C)  Summary:  On September 15, VADM James Metzger and 
PM/DAS Greg Suchan briefed a Dutch interagency team chaired 
by MFA Security Policy Director Maurits Jochems on U.S. 
concerns regarding the possible lifting of the EU's arms 
embargo on China.  VADM Metzger outlined the enhanced threat 
posed by possible increased EU technology transfers to China, 
while DAS Suchan explained why proposed changes to the EU's 
Code of Conduct on arms transfers were unsatisfactory, noting 
that U.S. concerns in this area were broad and bipartisan. 
In a shift from earlier stated positions, MFA Political 
Affairs Chief Jaap Werner said that relations with the U.S. 
and Japan would be a key consideration in reaching an EU 
decision; the Dutch side argued forcefully, however, that an 
enhanced Code of Conduct and a "Toolbox" for post-embargo 
countries should address U.S. concerns.  The Dutch side 
repeatedly noted that while the Dutch were not pushing to 
lift the embargo themselves, as EU president they would be 
compelled to deal with the issue in accordance with the 
wishes of the EU membership.  End Summary. 
 
2. (C) ACJCS VADM James Metzger and PM/DAS Greg Suchan 
briefed a Dutch interagency team on September 15 in The Hague 
on U.S. concerns related to a possible lifting of the EU 
China arms embargo.  Dutch MFA Security Policy Chief Maurits 
Jochems hosted the meeting, accompanied by other policy level 
colleagues from the MFA Political Affairs and East Asian 
Affairs Departments and Ministry of Economic Affairs, as well 
as representatives from MOD arms transfer office and Dutch 
Military Intelligence Department.  VADM Metzger opened the 
meeting by stating that the symbolism of a decision to lift 
the embargo at a time when China was behaving in a 
threatening manner vis-a-vis Taiwan would clearly send the 
wrong signal to China and would be counter-productive to 
resolving cross strait differences.  He noted that U.S. 
concerns go beyond countering immediate military threats to 
include long-term worries about Chinese proliferation to 
third countries.  He also said that the U.S. is concerned 
about transfers of seemingly non-lethal systems such as night 
vision devices which could significantly enhance Chinese 
capabilities. 
 
3. (C) Jochems observed that the Dutch were not responsible 
for raising the issue of a possible embargo lift within the 
EU, but had inherited it from previous presidencies. 
Repeating his comments from a previous meeting with U.S. 
interlocutors (ref A), Jochems said that he was struck by the 
progress the Chinese had already made despite the embargo, 
which raised the question of how effective the embargo really 
was.  MFA Political Affairs Office Director Jaap Werner 
(MFA's agenda manager for the Dutch EU Presidency) said the 
EU was looking to play a part in China's impressive economic 
growth.  He saw four elements as being key in determining how 
the EU should proceed:  the effectiveness of the embargo as 
such, human rights concerns, regional stability 
considerations and the impact of an embargo lift on relations 
with allies such as the U.S. and Japan.  He stressed that 
VADM Metzger and DAS Suchan's visit was a good opportunity to 
explore U.S. feelings on this issue.  MFA East Asian Affairs 
Deputy Director Margriet Bot said the EU felt compelled to 
respond positively to a request from the Chinese, who 
objected (fairly, she thought) to being lumped in the same 
category as Zimbabwe and Sudan. 
 
4. (C) VADM Metzger presented a U.S. Pacific Command Briefing 
on the possible impact of specific EU technologies on 
regional stability.  Jochems noted that European and U.S. 
industrial high-tech cooperation with China was a legitimate 
cause for concern, and acknowledged that the Dutch parliament 
opposed lifting the embargo on both human rights and regional 
stability grounds.  He suggested, however, that an enhanced 
EU Code of Conduct on arms transfers in place of the embargo 
would restrain EU states from increasing sales to China.  DAS 
Suchan countered that it was intuitively obvious that lifting 
the embargo implied an increase in transfers would follow. 
MFA arms transfers Office Director Paul van den IJssel argued 
forcefully that an enhanced Code of Conduct and a "Toolbox" 
for post-embargo countries such as China would result in 
increased scrutiny of transfers to China.  DAS Suchan noted 
U.S. support for the Code of Conduct in general, stating it 
was a useful instrument in judging arms transfers to nations 
such as Brazil, but stressed that China was a special case. 
Suchan added that those EU Members that apply the Code (but 
not the Embargo) to their defense exports to the PRC approve 
seventeen licenses for every one that they deny.  In the U.S. 
view, "the universe of acceptable arms transfers to China is 
a null set."  Bot said the EU hoped to gain some concessions 
from the Chinese on human rights grounds in exchange for an 
embargo lift.  Werner asked how an EU lifting of the embargo 
would be received in Washington.  DAS Suchan said that on 
political level it would be greeted with "immense 
disappointment," noting that the issue was a bipartisan 
matter of concern in both the executive and legislative 
branches of the U.S. government.  Suchan also noted that if 
the EU lifts the Embargo, it will raise significant obstacles 
to U.S. defense cooperation with Europe, and the U.S. 
congress would likely legislate additional impediments to 
defense trade. 
 
5. (C) Comment:  MFA Political Affairs Office Director 
Werner's inclusion of U.S. and Japanese interests in his 
criteria for Dutch consideration of this issue is significant 
and positive shift away from earlier suggestions (from Werner 
and others) that the EU had already decided to lift the 
embargo and was concerned only with how to manage the U.S. 
reaction.  With the possible exception of MFA's East Asia 
Department, it appeared that most Dutch interlocutors would 
be happy to have the issue off their plate for the rest of 
their EU Presidency (see also ref B).  Nevertheless, the 
Dutch continue to argue that an enhanced Code of Conduct and 
a "Toolbox" for post-embargo countries will address U.S. 
concerns, and it is clear that the Netherlands is not 
prepared to "go it alone" if other states make a forceful 
move -- without significant opposition -- to lift the 
embargo.  End Comment. 
 
6. (U) DAS Suchan has cleared this message. 
 
SOBEL