US embassy cable - 05VIENNA3840

UNCLAS SECTION 01 OF 02 VIENNA 003840 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD, EAGR, PREL, AU, WTRO 
SUBJECT: WTO TRADE TALKS: AUSTRIA UNITED AGAINST FURTHER 
CONCESSIONS ON AGRICULTURE 
 
REF: A) VIENNA 3586 B) VIENNA 3442 
 
Summary 
------- 
1.  (SBU) Austria's Agriculture and Economics Ministers have 
announced that the GoA is "totally united" behind the current 
EU position on agricultural market access.  The Minister of 
Agriculture, Josef Proell, and the influential Austrian farm 
lobby have engaged in an intensive public relations campaign, 
arguing the 2003 CAP reform should remain intact and that the 
"U.S. and Brazil should offer more."  The agricultural 
lobby's arguments have overshadowed the Minister of Economy's 
initial support for the U.S. agricultural proposal and the 
MoE's desire to promote industrial and service exports. 
Austria still hopes for an ambitious outcome by the end of 
2006.  During Austria's EU Presidency the first half of 2006, 
the GoA will probably play the part of "honest broker" and 
remain in the background on DDA talks.  Moreover, it is 
unlikely the GoA will press for further reductions in 
agricultural support levels, with the governing People's 
Party hoping to shore up support with the farm constituency 
in advance of national elections in autumn 2006.  End Summary. 
 
 
Agriculture Minister:  "Don't Touch 2003 CAP Reform" 
--------------------------------------------- ------- 
2.  (SBU) During a December 5 press conference, Agriculture 
Minister Josef Proell and Economics Minister Martin 
Bartenstein proclaimed Austria is "totally united" behind the 
present EC position.  Proell emphasized that Austria would 
ensure that the 2003 CAP reform remained intact and that the 
EU's major trading partners accepted the need to continue to 
include a category of sensitive products of up to 8% of 
tariff lines.  In a bizarre analogy, Proell likened the U.S. 
and Brazil to "figure skating judges, who are quick to 
criticize, but are unwilling to perform themselves."  Proell 
noted that a "Hong Kong II" would be necessary in 2006. 
 
3.  (U) Bartenstein, who had initially welcomed the USG 
agricultural proposal in October, said the successful 
conclusion of the Doha Round would indeed yield increased 
world-wide economic growth.  However, he cautioned that there 
were concerns how these economic benefits would accrue both 
across sectors and also between developed and developing 
nations.  Bartenstein underscored that there is no question 
of "trading" gains in services and NAMA to the detriment of 
agriculture. 
 
 
Austrian Concerns With Further Agricultural Market Access 
--------------------------------------------- ------------ 
4.  (SBU) Gabriella Habermayer, Head of the Ministry of 
Economy's Multilateral Trade Division, told Econ Unit Chief 
December 7 that Austria had several general concerns 
regarding further concessions on agricultural market access. 
First, many Austrians believe philosophically that, without 
adequate safeguards, the large, "industrialized" U.S. 
agriculture sector would overwhelm Europe's farms.  Second, 
Habermayer said most Austrians supported continued financial 
assistance for sustainable agricultural development, 
environmentally-conscious policies, and strong consumer 
protection capabilities.  When pressed, Habermayer admitted 
support in these areas fall within the less contentious green 
box.  Finally, Habermayer confirmed that the GoA strongly 
opposed any reduction in the number of products exempted in 
the sensitive products category. 
 
5.  (SBU) Habermayer said the GoA would "try to make the 
best" out of the current situation in Hong Kong.  Austria 
would have preferred more progress on quantifiable 
indicators, i.e., modalities, but Habermayer said the GoA 
hoped there would be some progress on qualitative issues in 
Hong Kong.  According to Habermayer, services remain very 
important for Austria, and the GoA is disappointed there has 
not been more progress in this sector.  Nevertheless, 
Habermayer said the GoA understands that progress on services 
depends on progress in NAMA and agriculture.  Habermayer 
added that the GoA believed the WTO could achieve an 
ambitious outcome by the end of 2006 with intensified efforts. 
 
 
The View From the Farm Lobby 
---------------------------- 
6.  (U) Rudolf Schwarzboek, President of the Austrian 
Agricultural Chamber and also President of the European 
Farmers' Association, presented the farm lobby's views during 
a November 29 conference.  Schwarzboek claimed the 
agricultural sector wanted Doha to succeed.  However, in 
Schwarzboek's opinion, reforms in Europe's agricultural 
sector since 1993 have outpaced reforms in other sectors, so 
success in Doha should "not come at the expense of 
agriculture."  Schwarzboek held up the CAP as a successful 
common policy that other sectors, e.g., R&D, transportation, 
energy, and fiscal, should emulate.  Schwarzboek repeatedly 
criticized the Commission for lacking a "democratic 
orientation" in its decision-making. 
 
 
Comment 
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7.  (SBU) The Ministry of Economy, the lead on trade 
negotiations, was initially an advocate for more substantive 
movement on agricultural market access in return for progress 
on NAMA and services.  However, the Agriculture Ministry and 
the farm lobby began to dominate the debate, both publicly 
and behind the scenes.  Support for maintaining a large range 
of sensitive products remains strong in 
"environmentally-green" Austria, where most Austrians want 
all their foodstuffs produced locally, or at least within the 
EU. 
 
8.  (SBU) It is unlikely that Austria will be particularly 
proactive in trying to push for an agreement during the its 
Presidency the first half of 2006.  As EU President, Austria 
will need to play "the honest broker" within the EU and will 
indeed focus more effort on resolving the EU's current budget 
impasse, should the UK Presidency fail to conclude a deal. 
Moreover, with national elections due in autumn 2006, the 
governing People's Party and its popular Agriculture Minister 
will undoubtedly look to shore up support among the farm 
constituency. 
MCCAW