US embassy cable - 05PARIS389

UNCLAS PARIS 000389 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD, FR, USTR 
SUBJECT: FSC/ETI DISPUTE:  DEMARCHE TO GOF ON SUSPENSION OF 
RETALIATORY DUTIES 
 
REF: (A) STATE 11149, (B) WHITE/USEU WILSON E-MAIL, 1/20/05 
 
 
1.  (SBU) Summary.  Economic Minister-Counselor made ref A 
demarche January 20 to MFA Director Alain Leroy.  Leroy took 
our points on board, but revealed little about how France 
will act when the Commission takes up the issue of FSC 
sanctions in the 133 Committee meeting.  The GOF remains 
particularly sensitive to the allegation that Boeing is one 
of the primary beneficiaries of FSC phase-in/grandfathering. 
End Summary. 
 
2.  (SBU) Economic Minister-Counselor called MFA Director 
for Economic and Commercial Affairs Alain Leroy (U/S 
equivalent) January 20 to make ref A demarche, emphasizing 
in particular the fact that the legislation realized 99 
percent of what the EU asked of us, and that EU action could 
have a salutory or negative effect on Congressional 
attitudes on trade issues with the EU as we move into the 
second Bush term.  The U.S. intent is to resolve contentious 
issues (as indicated by the FSC legislation and the recent 
Boeing/Airbus procedural agreement), rather than to see new 
irritants created.  An EU refusal to recognize 
Administration and Congressional efforts to gather support 
for difficult trade decisions would be a very negative 
signal, particularly to U.S. legislators, many of whom feel 
they have made an unpopular political decision in approving 
the legislation. 
 
3.  (SBU) Leroy took the points on board, and seemed 
particularly sensitive to the upcoming visit by President 
Bush to Europe (and Chirac eventually to Washington), as 
well as the potential implications for Congressional 
consideration of Fast Track negotiating authority later this 
year.  While not indicating how the French would argue on 
the issue of sanctions suspension/automaticity, he indicated 
that the two-year phase-in and the existence of 
grandfathered contracts were serious concerns for France, 
particularly given the perception that Boeing is a major 
beneficiary. 
 
4. (SBU) Comment.  Leroy promised to pass our concerns up 
the chain, but the heavy overhang of the Boeing/Airbus issue 
likely ensures that the GOF will not help our cause in the 
133 Committee.  End Comment. 
WOLFF