US embassy cable - 05PARIS8149

UNCLAS SECTION 01 OF 02 PARIS 008149 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR E, EB, EB/TPP AND EUR/WE 
STATE PASS USTR (SDONNELLY, DDWOSKIN) 
USDA/FAS for BIG/SIMMONS/RICHEY/JONES and ITP/WOOLSEY 
 
E.O. 12958: N/A 
TAGS: ETRD, EAGR, PREL, FR 
SUBJECT:  WTO TRADE TALKS:  FRENCH BUSINESS BEGINS TO 
CRITICIZE FRENCH PRO-FARM POSITION 
 
 
1. SUMMARY.   In a first public breach of the French 
position on agricultural trade, French business leaders -- 
with French Ministers of Economy and of Trade present -- 
openly criticized the GOF's support for the interests of the 
agricultural sector and maintenance of the EU's Common 
Agricultural Policy (CAP).  At a public meeting sponsored 
last week by MEDEF, the French employers association, 
business leaders expressed their strong support for the WTO 
talks, and called for the GOF not to neglect France's 
"offensive" interests in non-agricultural market access and 
services.  Farm groups have reacted angrily. This is the 
first time that the GOF's pro-farm interest "solidarity" has 
been broken publicly.  Despite reassurances to the contrary 
by MEDEF, if upcoming WTO negotiations end in a stalemate, 
business leaders may well blame farm interests. END SUMMARY 
 
2. (SBU) At a MEDEF meeting Nov 25 with the French Ministers 
of Finance and Trade, French entrepreneurs, managers and 
business leaders expressed their strong support for the WTO 
talks. Flanked by Economy Minister Thierry Breton and Junior 
Trade Minister Christine Lagarde, MEDEF President Laurence 
Parisot, France's top private sector representative, said 
the Doha Round was vital for economic growth in France and 
in Europe. Other business representatives were more 
critical, publicly and privately expressing their concern 
over the current stalemate in which French officials had 
rallied almost exclusively to the defense of narrow 
agricultural interests at the expense of manufacturing and 
service industries. According to press reports, one 
businessman reminded the Ministers that industry and 
services accounted respectively for 85 percent and 12 
percent of France's exports and employed 62 percent of 
France's workforce. 
 
BUSINESS: GOF IS "HOLDING WTO POSITION HOSTAGE" 
--------------------------------------------- -- 
3. (SBU) In her main address, Parisot agreed that the 
negotiations should not be limited to agriculture. In 
personal comments to the press, other private sector 
representatives strongly criticized the GOF's unquestioning 
support of the French farm lobby's position at the expense 
of France's other economic interests. At the meeting, one 
business leader vocally criticized the government for 
"holding the French WTO position hostage" to narrow farm 
interests. 
 
4. (U) The leading French farm union FNSEA reacted 
immediately, publishing a press release following the forum 
condemning "the naivety of MEDEF".  The press release called 
for MEDEF to unite with other organizations such as FNSEA to 
preserve the so-called French model (of economic 
development). Farm leaders argued that an agreement on 
agriculture would certainly not lead to increased 
liberalization for industry and services. Some French farm 
leaders even openly expressed their wish for a failure of 
the Hong Kong Ministerial, saying that no agreement would be 
better than a bad agreement. 
 
5. (U) In later interviews to the press, Parisot denied the 
implication that business would blame farmers if the Doha 
trade talks failed.  She added that the French business 
community fully supports EU trade negotiator Mandelson in 
his call for a balanced agreement, involving agriculture, 
industry and services. 
 
COMMENT: A FIRST BREACH IN THE WALL 
----------------------------------- 
6. (SBU) This incident highlights the growing discontent 
within the French business community about EU farm policy 
and the EU's negotiating stance leading up to Hong Kong. 
This is the first time that business has openly criticized 
the French government's unswerving support for maintaining 
the EU's Common Agricultural Policy (CAP) and protecting its 
main beneficiaries, increasingly corporate farmers and 
absentee landlords. Until now, government ministers have 
publicly tripped over each other to show their allegiance to 
President Jacques Chirac's strong pro-farm position. 
However, Breton and Lagarde's presence at this MEDEF forum 
highlights a subtle shift, if not a potential breach, in 
that solidarity.  Despite reassurances to the contrary by 
MEDEF, if upcoming WTO negotiations do end in a stalemate, 
French business leaders may well blame farm interests. 
Curiously, MEDEF has already recommended that in case the 
Doha WTO talks should fail, the EU should follow the U.S. 
example and sign more bilateral or regional free-trade 
agreements. 
STAPLETON