US embassy cable - 05PRAGUE1678

UNCLAS PRAGUE 001678 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB/TPP, EUR/NCE, E STAFF DAN MORRISON 
STATE PLEASE PASS USTR LISA ERRION 
COMMERCE FOR ITA/MAC/EUR MIKE ROGERS 
TREASURY FOR OASIA ANNE ALIKONIS 
 
E.O. 12958: N/A 
TAGS: EAGR, ETRD, WTRO, EUN, EZ 
SUBJECT: CZECH REPUBLIC: HOPEFUL ON DDA BUT EXPECTING 
LITTLE FROM WTO HONG KONG MINISTERIAL 
 
REF: A. PRAGUE 1526 
 
     B. SECSTATE 211956 
     C. SECSTATE 209236 
 
1. (SBU) SUMMARY: The 24 member Czech delegation to Hong 
Kong, led by Minister of Industry and Trade Milan Urban, is 
doubtful that progress can be achieved in Hong Kong and yet 
remains hopeful about the Doha Development Agenda (DDA). 
Both the Ministries of Industry and Trade and Foreign Affairs 
believe that a more realistic window for substantial movement 
on DDA is in 2006, as the EU negotiating position has 
hardened in the last two months, leaving less room for 
flexibility in Hong Kong.  Although they explained that the 
EU agriculture proposal remains their best and final offer, 
the GOCR still hopes for progress on NAMA and services at 
Hong Kong.  END SUMMARY. 
 
2. (SBU) Econoffs met with the Ministries of Industry and 
Trade, Agriculture, Finance, and Foreign Affairs and 
delivered a letter from the Ambassador to their Ministers, 
stressing USG commitment to a successful Ministerial in Hong 
Kong and conclusion of an ambitious DDA in 2006, and urging 
EU movement on the agriculture proposal per reftel B.  Both 
Ministries of Industry and Trade and Agriculture made it 
clear that there would be no progress on the EU agriculture 
position at Hong Kong, despite the more progressive position 
urged by the "northern tier" (Sweden, the Netherlands, 
Denmark, Finland and the UK), which the GOCR fully supports 
(reftel A).  Instead, the GOCR is hoping there would be some 
sort of a side agreement on NAMA and services along the lines 
of the Swiss formula, although they did not elaborate how 
that might be achieved without a breakthrough in agriculture. 
 
3. (SBU) When asked whether and how the internal EU dynamic 
has changed as a result of the pressures brought on by the 
new U.S. agriculture proposal, our interlocutors indicated 
that in the short run, the position of the agriculture 
hardliners has become even harder and prevailed within the 
EU.  Nonetheless, the interests and positions of the small 
non-agricultural countries have also become clearer and more 
vocal, and the Czech Republic is cautiously hopeful that the 
EU position on agriculture will evolve, even if not in time 
for the Hong Kong ministerial. 
 
4. (U) The GOCR is taking a rather large delegation to Hong 
Kong.  The 24 delegates represent four ministries:  Industry 
and Trade, Agriculture, Foreign Affairs, and Finance.  The 
final internal GOCR delegation meeting will be held December 
5.  The head of the GOCR delegation, Minister Urban of 
Industry and Trade, will only stay for the first three days 
of the Ministerial, at which point his Deputy Minister Martin 
Tlapa, will take over. 
 
5. (SBU) COMMENT:  Compared to previous meetings with 
Ministry of Industry and Trade (the lead ministry on WTO 
issues), econoffs noticed three changes to the GOCR reaction 
to the U.S. agriculture proposal: greater certainly that 
there would be no further movement on the EU agriculture 
proposal before Hong Kong, the mantra "DDA is not just about 
agriculture," and attempts to downplay the impact of the U.S. 
proposal.  We see this as a clear result of continued 
indoctrination from various EU meetings preaching that the EU 
must be united on this issue.  These changes are in contrast 
to initial GOCR reaction to the U.S. agriculture proposal in 
October, which was more open and hopeful that the U.S. 
proposal can trigger change within the EU.  As reported in 
reftel A, the Czech Republic has much to gain from movement 
at Hong Kong, especially in NAMA.  However, they are resigned 
to the fact that Hong Kong will likely not achieve sweeping 
changes and instead, Czechs are hoping that 2006 will prove a 
better year for reducing trade barriers.  END COMMENT 
CABANISS