US embassy cable - 05BRUSSELS2203

C O N F I D E N T I A L SECTION 01 OF 04 BRUSSELS 002203 
 
SIPDIS 
 
E.O. 12958: DECL: 05/23/2015 
TAGS: PREL, PINS, PHUM, ETRD, XB, EUN, USEU BRUSSELS 
SUBJECT: A/S HILL LAUNCHES STRATEGIC DIALOGUE ON EAST ASIA 
WITH EU 
 
 
Classified By: USEU Pol M/C Kyle Scott for reasons 1.4 (b) & (d) 
 
1. (C) SUMMARY: On May 23-24 in Brussels, EAP A/S Christopher 
Hill led an interagency delegation, including representatives 
from State, NSC, OSD, JCS, and the intelligence community, in 
a meeting with EU Troika officials to launch the U.S.-Europe 
Strategic Dialogue on East Asia.  A/S Hill also met on the 
margins with High Representative Javier Solana and other EU 
officials, including key Political and Security Committee 
(PSC) Ambassadors.  Both sides agreed that the Strategic 
Dialogue would be a useful way to share assessments and, if 
possible, develop common approaches to "managing" China's 
rise.  EU officials generally agreed that China's rise was 
both an opportunity and a challenge, and that the U.S. and 
Europe should engage broadly to ensure China's constructive 
participation in a rules-based international system.  The EU 
welcomed Beijing's engagement with Taiwan opposition figures, 
but agreed that it should be expanded to include the 
governing party.  The EU agreed that China's refusal to 
factor in universal values such as human rights in its 
external relations was a concern, as was its increasing 
dominance in global resource markets.  The U.S. and EU both 
hoped that an inclusive regional architecture would emerge to 
facilitate East Asian cooperation on economic, political and 
security issues.  The EU remains committed to supporting the 
Six-Party Talks over North Korea but will not seek a direct 
role for itself.  Participants listed para 17.  Parallel 
meetings were held at NATO and are reported septel.  END 
SUMMARY 
 
Objectives and Structure 
------------------------ 
 
2. (C) Ambassador Pierre-Louis Lorenz of Luxembourg (EU 
Chair) opened by saying the objective of the Strategic 
Dialogue was to "deepen trust, clarify security concerns, and 
develop a long-term approach to China."  A/S Hill said the 
U.S. was looking to Europe for a serious discussion of how we 
view the political, military and economic trends in East 
Asia.  The goal was to work together to ensure that East Asia 
continues to see the rules-based international system as its 
model of choice. 
 
3. (C) EUR A/S Fried said that while the U.S. was a Pacific 
power and Europe was not, we both played significant global 
roles and had stakes in managing China's rise.  We should 
sustain and deepen our new Strategic Dialogue, using both EU 
and NATO channels; at some point, we should also discuss 
Japanese involvement.  A/S Fried said we wanted a flexible 
dialogue that might branch off with military and other 
experts groups, as appropriate.  Ambassador Lorenz said the 
EU looked forward to continuing the discussion at the SLG, 
Political Directors, and working group (COASI) levels, and 
agreed that more frequent meetings among experts might be 
useful. 
 
4. (C) In a side meeting later, HiRep Javier Solana told A/S 
Hill that he hoped this Strategic Dialogue would become an 
important mechanism for better transatlantic understanding 
about China and the region.  "We have become trapped in an 
unhealthy debate" over the arms embargo, he said.  Solana 
asked A/S Hill to "imagine a world in which the EU had 
relations free of any sanctions against China."  Even in that 
case, he said, the EU would want to have a mechanism in place 
to ensure that it did nothing to destabilize the Asia-Pacific 
region.  The Strategic Dialogue would be helpful in that 
regard.  The EU might eventually open up a similar channel 
with Japan, he suggested.  Referring to Solana's elliptical 
reference to lifting the arms embargo, A/S Hill cautioned the 
EU from taking any steps that could damage U.S.-European 
relations on an issue of such strategic importance to the 
U.S. 
 
Engaging China 
-------------- 
 
5. (C) After a general review of regional challenges, A/S 
Hill said the key factor in all regional issues was China. 
China's rise held some promise for the region, but we also 
needed to keep our eyes open and be realistic about the 
stakes.  He said the best way to influence China's rise was 
to "treat it like an adult" by engaging broadly with Beijing 
and making our expectations clear.  We should not soft-pedal 
our support of universal values on human rights, democracy 
and the rule of law.  Nor should we let China think that, for 
the sake of economic relations, we would tolerate coercive 
behavior toward its neighbors.  How we deal with China in the 
next generation will determine what China becomes, A/S Hill 
said; "it is critical to get this right."  Ambassador Lorenz 
agreed that "active engagement" with China was important, and 
said "we should help China" overcome obstacles because the 
stakes were too high to sit on the sidelines.  European 
Commission China Head of Unit James Moran characterized 
EU-China relations as a "mature engagement" that included 
everything from trade to nonproliferation.  He said the EU 
was working on a new contractual basis ("Framework 
Agreement") for its relations with China that would, among 
other things, require joint commitments on human rights, 
counter-terrorism and nonproliferation. 
 
6. (C) UK Asia-Pacific Director Sebastian Wood said he 
perceived a "false dichotomy" in the transatlantic dialogue 
between engagement and containment of China.  But this missed 
the point, which was rather for the U.S. and Europe to 
"recognize together the inevitability of China's rise, 
including militarily."  We should decide together on red 
lines and goals, Wood said, and then work to shape China's 
preferences to ensure that when it does become a military 
superpower, it can't just enforce its will on the region.  We 
were in a "race against time," he added.  NSC China Director 
Dennis Wilder underscored that U.S. policy on China was not 
adversarial and that we were not seeking containment of 
China.  At the same time, China's behavior toward Taiwan 
required the U.S. to maintain a credible deterrent to Chinese 
aggression. 
 
7. (C) In a later meeting with representatives to the EU 
Political and Security Committee (PSC), French Ambassador 
Silvie-Agnes Bermann cautioned that we should be "careful" in 
our relations with China so as not to "provoke a backlash." 
A/S Hill replied that if we avoided a "values discussion" 
with China, its leaders would conclude that all we cared 
about was economic benefits.  German PSC Ambassador Reinhard 
Schaefers agreed that China does not share our values on 
things like human rights and nonproliferation.  He asked 
whether we should "contain them because they're not 
calculable," or approach them through "detente and 
engagement."  A/S Hill said that we should use conditionality 
in our relations with China and remain vigilant in defense of 
our values.  NSC Director Wilder said the U.S. wanted a 
prosperous and growing, but also transforming, China. 
 
China-Taiwan 
------------ 
 
8. (C) A/S Hill said the U.S. welcomed China's recent 
engagement with Taiwan opposition figures but cautioned that 
it could backfire if Beijing did not also follow-up with 
direct engagement with Taiwan,s elected officials.  (HiRep 
Solana later agreed that this would be important, especially 
as economic and people-to-people contacts have become so 
significant in recent years.)  NSC Director Wilder said that 
while China was clearly maturing in many areas, it still 
remained fully capable of falling back on coercion and 
nationalism, especially with regard to Taiwan.  The situation 
was very delicate and the U.S. was in a constant balancing 
act of deterring and reassuring both sides.  Wilder recalled 
how in 1996 the U.S. had to move two carrier battle groups 
toward Taiwan in response to intimidating Chinese missile 
launches.  The humiliation engendered by this U.S. response 
led China to conclude that it needed a modern military 
capable of preventing the U.S. from interfering if it decided 
to threaten Taiwan again. 
 
9. (C) The Commission's Moran asked if there were ways the 
U.S. and EU could work together on the signals we send to 
Beijing and Taipei.  Wilder said we should continue to insist 
on a peaceful resolution of the situation.  The EU's position 
and firmness on the anti-secession law had been very 
important, he said, and had taken the Chinese by surprise. 
He said it would also be helpful if the EU could support 
Taiwan's standing in international organizations.  If the 
leadership and people of Taiwan get discouraged and think the 
international community is against them, they will radicalize 
and push for independence.  Council Director-General Robert 
Cooper agreed, and said he "always found Taiwan reasonable." 
 
10. (C) UK Director Wood said we should consult more on 
China's pursuit of sensitive technologies, especially 
dual-use items, so that the EU does not inadvertently provide 
China with something that concerns the U.S.  Such 
consultations "seem critical," he said, and would help 
European governments make better decisions under the EU Code 
of Conduct on arms exports.  But it should not be linked to 
the arms embargo debate, he added.  (NOTE: In the later 
meeting with PSC Reps, French Ambassador Bermann delivered 
the well-known French position that the Code of Conduct would 
be more binding and comprehensive than the embargo, and 
indirectly urged the U.S. to be more open to consultations on 
these issues.  She also doubted that China would ever attack 
Taiwan and characterized the 700 missiles aimed at Taiwan as 
"just a deterrent" to Taiwan independence.) 
 
China's Regional Relations 
-------------------------- 
 
11. (C) A/S Hill said that China's relations with neighbors 
were improving but significant problems remained.  For 
example, China does not share our values on issues like human 
rights, governance, or environmental protection and refuses 
to raise these issues with countries in the region and 
beyond.  Overall, this lessens the impact of international 
pressure on countries like Burma.  China's recent treatment 
of Japan was also unhelpful, and probably had more to do with 
Japan's bid for a UNSC seat than any historical grievances. 
At the same time, A/S Hill said, China's participation in the 
Six Party Process had been largely positive and had even 
served to improve, as a fringe benefit, U.S.-China bilateral 
relations.  FCO Far Eastern Group Head Denis Keefe worried 
that Sino-Japanese relations were deteriorating and thought 
the two had not made enough effort to improve their 
relations.  Commission U.S. and East Asia Director Richard 
Wright said he was encouraged by PM Koizumi's "measured tone" 
on tensions with China during the May 2 EU-Japan Summit. 
 
Regional Architecture 
--------------------- 
 
12. (C) A/S Hill said the U.S. supports a regional 
architecture that expands cooperation on issues such as 
democracy, security, and counter-terrorism and that does not 
exclude the U.S.  The ASEAN Regional Forum, which includes 
the U.S. and EU, seems very promising, he said.  Council DG 
Cooper agreed that architecture was important, and said that 
if the regional "ambiance and architecture" demonstrated that 
the way to succeed as a great power was through participation 
in a rules-based system, then China's rise would be positive. 
 He termed China an "unsatisfied power" because of Taiwan and 
because it was not the uncontested regional leader.  A robust 
regional architecture might provide a venue for safely 
channeling China's leadership ambitions, he said.  The UK's 
Keefe said the U.S. and Europe should also examine China's 
role in the UN and other global structures to ensure that our 
engagement in those fora is consistent with our goals for 
China. 
 
13. (C) COMMENT: The EU, which poured its hopes for a 
peaceful and prosperous future after WWII into the creation 
of a regional architecture to moderate national ambitions, is 
naturally drawn to the idea of replicating its experience in 
East Asia.  In all of A/S Hill's meetings with the EU, the 
most consistent subtext was the European faith that regional 
integration, through carefully planned architecture, offered 
the best hope for a future of peace and prosperity in East 
Asia.  END COMMENT. 
 
Resources and Trade 
------------------- 
 
14. (C) Council Policy Unit Asia Head Tomasz Kozlowski asked 
whether China was ready to take more responsibility for 
constructive international trade and resource management.  He 
worried about the consequences of China's increasing 
domination of resources, especially oil, in places as far 
afield as Latin America.  He was also concerned that China 
was "investing all over the world without asking for any 
political concessions in return."  NSC Director Wilder said 
the U.S. shared some of these concerns, and suggested that we 
might set up a sub-group of the Strategic dialogue to explore 
such issues. 
 
15. (C) Commission China Head Moran said that China's 
behavior and domestic European politics sometimes made it 
hard for the EU to stand up to protectionist pressures, as 
was now the case with textiles.  He recognized the USG faced 
the same difficulty with protectionist forces in Congress, 
but said it was important that we both "stand up to our free 
market principles."  Wilder agreed, and said the President 
felt strongly about supporting free market principles.  But 
at the same time, we needed China to be more helpful and to 
do a better job with outreach in order to lesson the 
constituent pressure on Congress. 
North Korea 
----------- 
 
16. (C) In his meeting with HiRep Solana, A/S Hill noted that 
it had been twelve months since the last round of the 
Six-Party Talks.  In the meantime, the North Koreans have 
harvested more plutonium.  The U.S. is considering what steps 
would come next if we cannot get the talks back on track 
soon.  Key to this will be more effort from the Chinese to 
use their leverage with North Korea.  Solana noted that the 
EU policy of supporting the Talks without actually 
participating in them remains unchanged.  He asked what the 
EU could do to help, and A/S Hill suggested the EU keep 
talking to the North Koreans about the importance of 
returning to the Talks, and about human rights concerns so 
that they realize this is a serious concern shared by many 
countries. 
 
17. (U) Strategic Dialogue Participants: 
 
-- Luxembourg (current EU President): 
Ambassador Pierre-Louis Lorenz, Ambassador for Asia and 
Oceania 
Georges Friden, Deputy Political Director 
Henri Schumacher, Permanent Representation to the EU 
Peggy Frantzen, Asia desk, Political Department 
Anne Tescher, Asia desk, Political Department 
 
-- UK (incoming EU President): 
Sebastian Wood, Director for Asia-Pacific, FCO 
James Morrison, Permanent Representation to the EU 
Denis Keefe, Head of Far Eastern Group, FCO 
(FNU) Hamilton, MOD 
 
-- EU Council Secretariat: 
Robert Cooper, Director General for Politico-Military Affairs 
Annalisa Giannella, Personal Representative of HiRep Solana 
for nonproliferation 
Ralph Kaessner, Asia Adviser, Cabinet of HiRep Solana 
Tomasz Kozlowski, Head of Asia Task Force, Policy Unit 
(desk officers) 
 
-- European Commission: 
Richard Wright, Director for US, Japan, Korea, Australia & 
Oceania 
James Moran, China Head of Unit 
Pierre Amilhat, South East Asia Head of Unit 
Seamus Gillespie, Head of Unit for Japan, Korea, Australia, NZ 
(desk officers) 
 
-- US Delegation: 
State EAP A/S Christopher R. Hill 
State EUR A/S Dan Fried 
State EAP/RSP Director Patricia Scroggs 
State EUR/ERA Deputy Director Karen Volker 
State PM/DTCP Deputy Director John Erath 
State EAP Special Assistant Marc Koehler 
State USEU DCM Michael McKinley 
State USEU Political Minister-Counselor Kyle Scott 
State USEU Poloff Van Reidhead 
State USEU Poloff Margaret Diop 
State Emb. Luxembourg Poloff Julie Breitfeld 
NSC China Director Dennis Wilder 
NSC Europe Director Tracy McKibben 
DOD/OSD China Director David Helvey 
JSC J-5 for China-Taiwan Lt. Col. John Anderson 
Acting Dep. National Intelligence Officer for Asia Michael 
Vance 
 
(U) The EAP Front Office has cleared this cable. 
 
Schnabel 
.