Cablegate: Perspectives On Wto, Biotechnology, The

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

UNCLAS SECTION 01 OF 03 PARIS 007226

SIPDIS

BRUSSELS PASS USEU FOR AGMINCOUNSELOR
STATE FOR OES; EUR/ERA;
STATE PASS USTR FOR MURPHY;
USDA/OS/JOHANNS AND PENN;
USDA/FAS FOR OA/TERPSTRA/ROBERTS;
ITP/SHEIKH/HENKE/MACKE/TOM POMEROY/MIKE
WOOLSEY/GREG YOUNG;
FAA/SEBRANEK/BLEGGI;
EU POSTS PASS TO AGRICULTURE AND ECON
GENEVA FOR USTR, ALSO AGRICULTURE

E.O. 12958: N/A
TAGS: EAGR ETRD PGOV FR WTRO EUN INR
SUBJECT: Perspectives on WTO, Biotechnology, the
2007 Farm Bill and Biofuels

1. SUMMARY: Fred L. Dailey, Director, Ohio
Department of Agriculture recently met with
representatives of the French Ministry of
Agriculture (MinAg) to share perspectives on the
WTO, biotechnology, the Farm Bill and biofuels.
After making it clear that he did not speak for
the USG, Director Dailey discussed the likely
impact of the WTO case on cotton subsidies and
hurricane Katrina on the next U.S. Farm Bill.
With regard to the WTO negotiations, the French
officials stressed that they thought that
significant benefits would primarily accrue to
emerging markets like Brazil at the expense of the
poorest countries. Alternatively, France favors
the development of domestic farm policies in
developing countries to help increase farm
earnings. On biofuel, French MinAg reps expressed
concern about the differential in production costs
in Brazil compared to those in the United States
and Europe. Finally, Director Dailey underlined
that the European position on biotechnology is
considered to be a non-tariff trade barrier in the
U.S. END SUMMARY.

2. On October 13, 2005, Fred L. Dailey, Director,
Ohio Department of Agriculture, and Embassy
AgEconomist met with three representatives of the
French Ministry of Agriculture (MinAg): Jean-
Jacques Benezit, Deputy Director for International
Trade, Daniel Boissiere, head of the Office of
Cooperation and Bilateral Relations, and Philippe
Duclaud, head of the Office of External Relations
of the EU,in the Directorate for Economic and
International Policy (DPEI).

WTO Trade Talks
---------------

3. French Ministry of Agriculture officials
explained they believed that the Doha round was
more of a development round than a trade
negotiation like the Uruguay Round. They said
that former rounds were like a club between the
United States and the European Union. However,
they asserted that this is no longer the case in
the current round: developing countries are now
playing a major role in the negotiations and this
round will have to give them practical answers.
The French fear that, in the end, Brazil and
emerging countries will be the winners at the
expense of the poorest African countries.

4. French MinAg reps explained their objective is
to favor country development based on domestic
agricultural policies, and not exclusively on free
trade. They believe it is a sovereign right for
developing countries to have domestic farm
policies (including non trade-distortive green box
payments), within the framework of WTO.

5. MinAg reps explained that the EU has already
taken substantive measures reforming the CAP and
is now waiting for other WTO members to make
similar reforms.

2007 Farm Bill
--------------

6. Director Dailey explained that discussions on
the next Farm Bill are beginning in the United
States. Two factors that will affect the
discussions are the outcome of the WTO case on
cotton subsidies and the "Katrina effect" which
means stronger budget constraints than formerly
expected. He added that Secretary Johanns has
conducted a number of listening sessions across
the country to hear farmers and ranchers concerns.

7. More specifically, Ohio farmers' focus is on
the development of bioethanol production (with 5
plants being currently built), the expansion of
cattle operations, the capitalization of indirect
subsidies in land value, the reduction in farm
subsidies announced by USTR and the limitation of
payments to rice producers. Director Dailey
emphasized the preference for compensation from
the market place rather than from public budgets,
their call for a safety net, and refusal to become
a "public utility."

8. When asked by French MinAg reps whether
landscape management, carbon fixation and rural
development were discussed as farmers' roles and
activities that could be paid, Director Dailey
answered these were taken for granted and did not
have the same recognition in the United States as
in the EU. However, he added that there are
important programs for soil and water conservation
in the United States.

Biofuels
--------

9. Director Dailey explained the success of the
bioethanol production in the United States with
its profitability, its generation of more demand
for corn, the positive contribution of biofuels to
the environment, and the reduction in use of
fossil energy.

10. French MinAg reps expressed their concerns
about the cost differential between European
biofuel plants and Brazilian plants and said
French plants are not expected to be competitive
with Brazil for the next 10 years. Finally,
French MinAg reps wondered how to deal with the
issue of biofuel in the WTO given the high cost
differential between operations in Brazil, Europe
and the United States.

Biotechnology
-------------

11. Director Dailey said 75 percent of soybeans
grown in Ohio this year are genetically modified.
He indicated that tofu processed in Ohio for
Japanese consumers meets Japanese standards
regarding biotech. Director Dailey indicated the
U.S. government considers the EU policy on biotech
to be a non-tariff trade barrier because
scientists worldwide have recognized this
technology to be safe.

12. Representatives of the French MinAg indicated
the biotech issue was very sensitive in France
given that side-effects on health and the
environment are not clear. They favored clear
labeling for the sake of consumer choice and did
not consider the EU biotech policy to be a non-
tariff trade barrier.

Geographical Indications
------------------------

13. French MinAg reps explained they have a
country of origin law, which affects product
value. They indicated that China, Vietnam and
Thailand worked with France on Geographical
Indications and were keen on adopting the concept
as a means of traceability. Director Dailey
responded that, in the end, consumers would
recognize high quality products.

Stapleton

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