Cablegate: Future U.S.-Uk and U.S.-Eu Trade Cooperation to Center On Innovation, Competitiveness

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RR RUEHAG RUEHROV RUEHSL RUEHSR
DE RUEHLO #2465 3061610
ZNY CCCCC ZZH
R 021610Z NOV 09
FM AMEMBASSY LONDON
TO RUEHC/SECSTATE WASHDC 3860
RUCPDOC/DEPT OF COMMERCE WASHDC
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE

C O N F I D E N T I A L LONDON 002465

NOFORN
SIPDIS

STATE PASS USTR FOR DAWN SHACKLEFORD
COMMERCE FOR MAC/PAUL DACHER

E.O. 12958: DECL: 11/02/2019
TAGS: ECON ETRD UK EU
SUBJECT: FUTURE U.S.-UK AND U.S.-EU TRADE COOPERATION TO CENTER ON INNOVATION, COMPETITIVENESS

Classified By: Economic Minister Counselor Richard Albright for reasons 1.4 (b) and (d)

1. (SBU) Europe, International Trade and Development Director at the UK Department for Business, Innovation and Skills (BIS) Claire Durkin discussed with EMIN and Econoff October 29, 2009, UK desire for a swift conclusion to the Doha Round (DDA) of trade negotiations, trade priorities with the EU, potential trade priorities under a Conservative government as well as Ms. Durkin's recent trip to Washington D.C.

2. (SBU) EMIN noted U.S. concerns about insufficient market access commitments by key emerging market countries in contrast to the EU's apparent satisfaction with the Doha Development Agenda deal on the table. Durkin commented that the EU had failed to rationalize its negotiating position vis-a-vis the developing world. It would need to differentiate between the emerging developing economies such as China, India and Brazil, the least developed countries (LDCs) and other developing countries to obtain optimal results for Europe and for world trade from the DDA. Durkin believes both U.S. and UK efforts to help LDCs, be it with preference programs like Generalized System for Preferences (GSP) and Aid for Trade, or with larger development programs like the North-South corridor project in Zambia, go largely unrecognized. This in turn does not translate into LDC good will and a willingness to compromise at the DDA negotiating table. She suggested that the U.S. and UK work closely in the run up to the WTO Ministerial Conference in Geneva, November 30 through December 2, 2009, to deliver similar messages regarding our commitment to work with LDCs and towards a successful conclusion to the DDA. Instead of treating LDCs and emerging market economies as one bloc, she suggested we work together to peel off the LDCs and increase pressure on the emerging market countries to improve their offers.

3. (SBU) Competitiveness and innovation will be key issues in future U.S.-UK engagement in the Transatlantic Economic Council (TEC) as well as other forums according to Durkin. She listed investment, standards rationalization, intellectual property rights, capital market reform and financial market innovation and regulation as the top priorities in the bilateral as well as the U.S.-EU relationship, underscoring the need for both Europe and the United States to innovate to grow their economies.

4. (C) Asked about trade priorities of a future Conservative government, Durkin stated her belief that despite their "arms-length" approach to Europe, the Conservatives could not turn away from the EU without losing, or at least greatly undermining, UK influence and interests. Campaign rhetoric aside, she expects they will be unwilling to let that happen. Prepared for any election outcome, Durkin intends to propose that Conservative engagement with the EU on trade center around the implementation and refinement of the EU's Services Directive, aimed at breaking down barriers to services trade between EU member states. Services are critical to the UK economy, and she believes a Conservative government would want to engage with the EU to achieve greater liberalization in this area.

5. (SBU) Durkin was pleased with constructive meetings at State and USTR during her October 13 trip to Washington. She is looking for ways her department could engage more regularly with the Department of Commerce. The Embassy continues to work closely with BIS on a variety of trade, regulatory and business issues. Visit London's Classified Website: XXXXXXXXXXXX
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