US embassy cable - 05BRUSSELS212

C O N F I D E N T I A L SECTION 01 OF 02 BRUSSELS 000212 
 
SIPDIS 
 
NOFORN 
 
DEPT FOR EUR/ERA, NEA - P. DIBBLE, NP - M. FITZPATRICK 
 
E.O. 12958: DECL: 01/18/2010 
TAGS: PREL, KNNP, PTER, PHUM, IR, EUN, USEU BRUSSELS 
SUBJECT: EU RESUMES TRADE, POLITICAL NEGOTIATIONS WITH IRAN 
 
REF: 2004 USEU 5396 AND PREVIOUS 
 
Classified By: USEU POLOFF LEE LITZENBERGER; REASON 1.4 (B,D) 
 
1.  (C/NF)  Summary.  The atmospherics at the January 12-13 
EU-Iran Trade and Cooperation and Political Agreement 
negotiations in Brussels were positive and relaxed, and Iran 
appeared to want the negotiations to succeed, according to 
Council Secretariat officials who attended.  Negotiations are 
still in the initial stages, and will take some time to 
complete.  The next round is likely to take place in Tehran 
in March, although no date has been set.  The EU believes it 
can sustain the talks -- and Iran's parallel commitment to 
suspend uranium enrichment -- easily through March and 
probably through the summer by offering Iran cooperation in 
various areas.  Beyond that point, though, the EU officials 
expect that Iran will seek some gesture from the U.S. in 
order to maintain its enrichment suspension.  Should this 
point be reached, the EU would hope the U.S. could make a 
gesture.  One possibility is support for Iran's WTO 
accession, and Iran has also expressed concern about possible 
attacks on its nuclear installations.  End Summary. 
 
Good Atmospherics 
--------------- 
2.  (C/NF)  On January 12-13 in Brussels, the EU renewed 
long-suspended negotiations with Iran on a Trade and 
Cooperation Agreement (TCA) and parallel Political Agreement. 
 The resumption was part of the Paris accord reached between 
the EU-3 and Iran in November in exchange for Iran's 
suspension of uranium enrichment.  According to EU Council 
Secretariat officials Bjorn Larsson and Sophie Kiesling 
 
SIPDIS 
(strictly protect), both of whom work on Iran and attended 
the talks, the atmospherics were positive and relaxed.  In 
the Political talks, the Iranians complained about EU 
Parliamentarians' contacts with MEK and, Larsson quipped, 
"the Iranians always think they have more leverage than they 
do."  Some Commission officials also reportedly remarked that 
the Iranians seemed tense, but in the view of Larsson and 
Kisling the talks were more relaxed than past sessions. The 
Iranians left the impression that they wanted the 
negotiations to succeed. 
 
3.  (C)  The EU delegation for the TCA talks was led by 
Commission Middle East Director Christian Leffler, who had 
led the first four rounds of TCA talks prior to their 
suspension in 2003.  The Political Agreement talks were led 
by retired Luxembourg Political Director Paul Mertz (who 
attended last fall's U.S.-EU-Iran Trilateral consultations in 
Brussels). 
 
No change in EU linkage of Trade and Political Talks 
----------------------- 
4.  (C/NF)  The Council officials assured USEU that the EU 
has not dropped its earlier insistence that the trade and 
political agreements are linked -- one won't be signed 
without the other -- and progress on both must go hand in 
hand.  They also said the political agreement would "be 
updated" to reflect new EU standard language on WMD that was 
adopted after the talks had been suspended in 2003.  They 
added that the Iranians seemed prepared to accept this in 
principle, although they noted that discussions are still 
preliminary and no texts have been exchanged.  The Council 
officials said they expect Iran will object to many parts of 
the text the EU will propose. 
 
Next Round Likely to be in March 
---------------------- 
5.  (C/NF)  A date for the next round of TCA/Political talks 
has not been set, but Larsson said it is unrealistic to meet 
more frequently than every two months and he therefore 
thought it likely the next round will be held in March, in 
Tehran. 
 
EU not happy with Iranian comments to press 
------------------ 
6.  (C/NF)  Larsson said the recent comments to the press by 
Iran's nuclear program chief Musawien that Iran's decision to 
suspend uranium enrichment was conditional on the success of 
its talks with the EU were "unhelpful."  Larsson said the 
EU-3 had reached agreement in December from Iran's National 
Security Chief Rowhani that "the suspension of uranium 
enrichment is indefinite for the duration of the talks," and 
that press statements should be kept to a minimum. 
 
U.S. role needed for long-term agreement? 
------------------ 
7.  (C/NF)  Larsson was confident the EU's TCA/Political 
negotiations could provide Iran sufficient incentives to 
maintain its uranium enrichment suspension through March and 
probably into the summer of 2005.  For a long-term 
arrangement locking in a permanent enrichment suspension, 
though, Larsson opined that Iran is likely to seek a 
"positive signal from the U.S."  In the economic area, 
support for Iran's WTO accession would be one possibility. 
(In this connection, Larsson noted that the Iranian press has 
reported that a foreign subsidiary of Halliburton recently 
signed a $310 million contract in Iran.)  On the political 
side, Larsson said the Iranians have expressed concern about 
possible attacks against their nuclear facilities.  Larsson 
opined that, should the talks reach the point where a small 
step by the U.S. could keep the enrichment suspension in 
place, it would be difficult for the EU to blame Iran if the 
U.S. proved unwilling to make a gesture toward Tehran. 
 
SCHNABEL 
 
.