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Cablegate: Demarche On U.S. Actions to Terminate Large

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS MADRID 003991

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: KPAO ETRD SP
SUBJECT: DEMARCHE ON U.S. ACTIONS TO TERMINATE LARGE
COMMERCIAL AIRCRAFT SUBSIDIES

REF: A. SECSTATE 213973

B. MADRID 3483

1. (U) We delivered Reftel A demarche to Javier Hergueta
Garnica, Deputy Director General of Bilateral International
Economic Relations with Europe and the OECD, Ministry of
Foreign Affairs and Cooperation, as well as Sr. Joan Trullen
Tomas, Secretary General of Industry and Jesus Candil
Gonzalo, Director General of Industrial Development, both of
the Ministry of Industry, Tourism and Commerce.

2. (SBU) Only Hergueta has been available for comment. He
expressed dismay that the USG took the case to the World
Trade Organization (WTO) rather than negotiating a new
agreement. He provided the anticipated argument that the USG
subsidizes Boeing, and expressed hoped that the matter would
quickly move back into negotiating a new agreement. He
alleged that failing to resolve this matter quickly is "bad
for both companies and countries."

3. (U) Spanish press generally covered the major arguments
of both the US and the EU, with none advocating the USG
position. All included allegations that presidential
election politics played a significant role in the timing of
this dispute. Following are some excerpts:

-Conservative - ABC, circ. 359,738:
...at the base of this discussion are two key factors: the
unstoppable increase in Airbus sales, and the upcoming US
presidential election.

-Left of center - El Pais, circ. 552,114:
Brussels felt betrayed by being taken before the WTO while in
the process of negotiating with Washington and following the
last meeting on the 16th of September, which the Commission
considered to be constructive.

-Independent - El Mundo, circ. 408,471:
Although Republican ideology defends the free market through
to its ultimate consequences, the Bush administration has
promoted a very protectionist policy in the last four years,
in particular with steel, cotton and other agricultural
products, along with importation penalties.

3. (SBU) Comment: Beginning with our first consultation
with Hergueta reported in Reftel B, it appeared that the GOS
would play a fairly passive role in this matter. Recent
conversation with Hergueta does not modify this impression:
the only difference being dismay that the dispute has moved
to the WTO and the belief that utilizing the WTO will
seriously harm commerce.
ARGYROS

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