US embassy cable - 05ROME1005

C O N F I D E N T I A L  ROME 001005 
 
SIPDIS 
 
 
E.O. 12958: DECL: 03/22/2015 
TAGS: PREL, ETTC, CM, IT, EUN, EXPORT CONTROLS 
SUBJECT: ITALY-CHINA: FINI - LI MEETING DOOMED AFTER EU 
STATEMENT 
 
REF: STATE 49288 
 
Classified By: Pol M/C Thomas Countryman for reasons 1.4 (b) and (d). 
 
1.  (C)  Summary. The March 18 meeting of Foreign Ministers 
Fini and Li was a disappointment for both sides, according to 
the Italian MFA.  Li made no headway in pushing for a lifting 
of the EU arms embargo, getting instead public and private 
lectures from Fini on human rights.  So, he gave nothing to 
the Italians on their top foreign policy priority, reform of 
the UN Security Council.  The laboriously negotiated joint 
communique was scrapped.  Italy would strongly favor a US-EU 
Strategic dialogue on China, as well as high-level Italian-US 
consultations on China, DPRK and other Asian topics.  End 
Summary 
 
2. (C) On March 22, Pol M/C and poloff met with Ambassador 
Claudio Pacifico, MFA Director General for Asia to discuss 
the March 18 meeting between FM Fini and Chinese FM Li. 
Before describing that meeting, Pacifico gave an overview of 
Italy,s relations with China.  He noted that Italian 
business interests are constantly pushing the GOI to improve 
the relationship with China in order to advance commerical 
opportunities.  Pacifico said Italy is falling behind 
Germany, France and others in that competition.   The MFA 
must balance this important priority with popularly supported 
principles on human rights, as well as the MFA's current 
highest priority, preventing UN Security Council reform from 
disadvantaging Italy. 
 
3.  (C)  Pacifico stressed that Italy has never been in favor 
of lifting the EU China Arms Embargo but that the position 
has evolved from strong opposition to a more flexible stance 
over the past six months.  Within the EU, Italy has focussed 
on tying the lift to improved human rights performance and to 
a strengthened code of conduct.  During President Ciampi,s 
state visit to Beijing in December, Italy took a more forward 
leaning approach by stating that Italy would be willing to 
consider lifting the embargo as the Chinese made improvements 
on human rights issues.  Pacifico said that Italian 
reservations on the lift had been hard to maintain as other 
EU members, especially the UK, gradually dropped their 
opposition.  Unlike other EU countries (UK, France, Germany, 
Spain), the Italian Government does not face any internal 
pressure from the Italian arms and military equipment sector 
to lift the embargo.  He summarized Italy's current position 
as "Italy is willing to work to lift the embargo but not 
immediately and not automatically and only after the Chinese 
take positive actions on human rights issues."  This 
position, Pacifico explained, is necessary to maintain its 
bilateral relations with China, but should not be taken to 
indicate support for lifting the embargo.  POL MC drew from 
Ref A to reiterate strong USG opposition to lifting of the 
arms embargo. 
 
FMs' Meeting 
------------ 
4.  (C)  Pacifico stated that a great deal of preparation, 
including several straight days work by a bilateral working 
group, had gone into setting up FM Li,s visit on March 18. 
However, due to the negative statement by the EU  on the 
recently enacted "anti-secessionist" law, the stop in Rome 
was plagued by "bitterness" from the moment of arrival. 
Pacifico bluntly called the meeting a "failure" for both 
sides.  Planned signings for negotiated agreements  were 
abandoned, including an agreed statement on UNSC reform.  FM 
Fini stood by the EU statement on the "anti-secessionist" law 
and FM Li defended the law stating, as he had in his meeting 
with PM Berlusconi, that the law gave priority to peaceful 
means and that military force would be used only as a last 
resort.  Fini offered no encouragement on a rapid lifting on 
the embargo, saying only that the EU would address it; Li was 
visibly bothered by this response.  Both in the private 
meeting and in his public comments, Fini said that Italy 
understood the importance of Taiwan to China, and the Chinese 
need to understand the importance of human rights standards 
to all Europeans.  Pacifico stated that "perhaps the only 
positive aspect of the meeting was that the Chinese received 
a very clear message that they must reconsider their actions 
and rethink their approach."  Pacifico said that at the 
bilateral level the meeting did not help achieve any Italian 
objectives and focus on the "anti secessionist" law did not 
leave much time to discuss other issues.  The new MFA Office 
Director for East Asia, Gianlucca Grandi, who also attended 
 
 
the meeting,  described the exchange as "the toughest meeting 
between Ministers I have ever seen." 
 
5. (C)  As an example of Chinese behavior, Pacifico mentioned 
that the Chinese brought up their concerns about official 
Taiwanese participation in Vatican ceremonies in the event of 
the Pope's passing away and in the subsequent appointment 
festivities for the new Pope.  The Italians told him this was 
in bad taste.  Fini urged Li to normalize relations with the 
Vatican.  (Pacifico told us that the Deputy Prime Minister of 
Taiwan will be visiting Rome and the Vatican for the 
inauguration of the new Taiwanese 'embassy' to the Holy See 
in the near future. This was not mentioned to the Chinese) 
 
6.  (C)  Pacifico stated that the Ministers briefly discussed 
North Korea, and Italy recognized China as playing a positive 
role on that issue.  A brief economic discussion focused on 
WTO regulations and the need for the Chinese to respect trade 
regulations and stop dumping practices.  (Note: A sudden 
surge in cheap Chinese textiles and shoe imports to has 
become a hot issue in Italian domestic politics this month, 
with coalition allies of Berlusconi demanding barriers to 
dumping).  The Chinese agreed to take a look at the issue, 
and in turn asked for Italian support in gaining  market 
economy, designation.  Pacifico, however, felt the Chinese 
showed no real acceptance on making efforts to restrain their 
market practices. 
 
Call for Consultations 
---------------------- 
7.  (C)  Pacifico was disappointed by Chinese behavior and 
called for increased direct consultation with U.S. 
counterparts in Washington on China and East Asia.  He also 
proposed setting up an informal closed consultative group of 
selected EU countries (UK, France, Germany, Spain, Italy) and 
the U.S. to discuss China and other Asian issues, 
particularly the DPRK.  Pol M/C agreed to forward these 
suggestions to Washington, stating that the USG is interested 
in a strategic dialogue on China with the EU. 
 
SEMBLER 
 
 
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	2005ROME01005 - Classification: CONFIDENTIAL