S E C R E T SECTION 01 OF 03 BRUSSELS 001510 

SIPDIS 

NOFORN 

E.O. 12958: DECL: 04/06/2014
TAGS: PARM PHUM PREL PINR EUN USEU BRUSSELS
SUBJECT: CHINA ARMS EMBARGO: APRIL 2 PSC DEBATE AND NEXT
STEPS FOR U.S. 

REF: A. USEU TODAY 04/06/04
     ¶B. BRUSSELS 1464
     ¶C. STATE 68263
     ¶D. PRAGUE 390 

Classified By: USEU Poloff Van Reidhead for reasons 1.4 (b) and (d) 

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SUMMARY
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¶1. (S/NF) The EU Political and Security Committee (PSC)
discussed the EU arms embargo on China during a heated 90
minute exchange on April 2.  PSC Ambassadors generally agreed
that the issue -- of whether, when and how to lift the
embargo -- should be sent back down to working groups for
further study before being presented to political groups for
a decision.  France objected, however, and succeeded in
getting agreement to discuss the issue at the April 26 FMs
meeting (GAERC) -- but failed in its campaign to secure an
early decision.  The debate will likely continue well into
the Dutch EU Presidency.  This cable draws on a detailed
readout and a sensitive internal report provided to Poloff by
UK and Hungarian contacts (please protect accordingly), as
well as background provided in recent days by other
interlocutors.  It also offers a strategy for continuing US
engagement. 

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PSC Reacts Badly to Latest US Demarche
-------------------------------------- 

¶2. (S/NF) PSC Ambassadors reportedly arrived at the April 2
meeting to find copies of ref C demarche sitting on their
otherwise empty desks.  The demarche was received badly
because it gave the impression that "big brother was
watching," and because it appeared timed as a heavyhanded and
hubristic attempt to influence the PSC, according to our UK
contact.  Some reps, led by Greek Ambassador
Paraskevoupoulos, objected to the Council Secretariat's
distribution of the demarche under Council Secretariat cover
and with a Secretariat identifying number.  He argued that
the document had no business being circulated by the
Secretariat, and insisted that it be stricken from EU 

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records.  Ambassadors also reacted against what they
perceived as the threatening tone of our demarche. 

¶3. (S/NF) The Financial Times' front page article on April 2
about the US demarche campaign also enflamed the Ambassadors
because it appeared directly aimed at Friday's PSC
discussion.  Irish Ambassador Kelleher reportedly opened the
meeting by waving the article in the air and imploring his
colleagues to protect the confidentiality of internal EU
deliberations.  Poloff pointed out that the timing of the
latest US demarche was a coincidence, as we were previously
unaware that the PSC was scheduled to discuss the issue on
that day.  (COMMENT: Our demarche was received badly not so
much because of its substance, but because of the way it was
presented.  Our UK contact faulted the Irish and the Council
Secretariat for the way the demarche was handled in the PSC, 

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and also the awkward timing that made it seem, along with the
FT article, tailor-made to influence the April 2 discussion.
END COMMENT). 

-----------------------------------------
National Positions: France versus Denmark
----------------------------------------- 

¶4. (S/NF) According to our UK contact, France staked out a
"zero flexibility" position on lifting the embargo, and is
opposed to any talk of applying conditionality (i.e. by
insisting on further human rights progress by China and/or
strengthening the Code of Conduct prior to lifting the
embargo).  The Danes are reportedly still leading the
opposition, and have circulated to EU partners a list of ten
human rights conditions that they believe China should meet
before the embargo is lifted (we have not yet obtained a copy
of this list).  Other EU Member States are lining up
somewhere in between, although "all agree in principle" that
the embargo should be lifted if certain conditions are met.
The debate from now on will focus on defining conditions and
timing. 

¶5. (S/NF) Following is a summary of national interventions
made at the April 2 PSC: 

-- France: The embargo is anachronistic and must go; willing
to discuss timing but not conditionality because China would
not accept human rights conditionality; likewise would be
contradictory to enhance the Code of Conduct specifically for
China while also lifting the embargo; opposed also to making
Code of Conduct legally binding; wants issue to remain
political; opposed to sending it down to working groups. 

-- Denmark: Any decision to lift the embargo must be linked
to specific Chinese steps on human rights; EU also needs to
review Code of Conduct to ensure that lifting the embargo
does not result in increased arms sales to China. 

-- Germany: EU must consider regional impact of lifting the
embargo; now is not a good time to lift embargo (COMMENT: The
Germans appear to have moved closer to the Danes in recent
weeks, and are now the largest EU member state with serious
reservations about lifting the embargo.  One report of the
discussion suggests that "the tough German position, coupled
with the strength of US views, might be tempering French
enthusiasm."  END COMMENT). 

-- UK: Should be further study by working groups to identify
implications for human rights and regional stability, and to
examine options for strengthening Code of Conduct (COMMENT:
Our Hungarian contact reports that the UK is fundamentally
closer to the French end of the spectrum than the Danish.
The UK, like France, does not favor making the Code of
Conduct legally binding.  END COMMENT). 

-- Greece: Should explore gestures China could make on human
rights without explicitly linking them to lifting the
embargo; should not link regional stability to lifting
embargo; "provocatively" proposed that the Code of Conduct be
made legally binding.  (COMMENT: Our contacts report that the
Greek position on lifting the embargo is closer to France
than any other Member State.  END COMMENT). 

-- Ireland: Supports sending the issue back to working groups
(in part to keep the EU from making any decision during its
Presidency). 

-- Netherlands: Central consideration should be possible
release of political prisoners from the 1989 Tiananmen
crackdown. 

-- Czech Republic: Supports French position that issue should
remain political; silent on other points (COMMENT: Our UK
contact said that the Czech position is generally understood
to be informed by that country's interest in selling radar
equipment to China, as described ref D.  END COMMENT). 

-- Sweden: Working groups should further study issues of
human rights, regional stability, and enhancing the Code of
Conduct. 

-- Austria: Should explore gestures on human rights that
China could make but avoid linkage to lifting the embargo;
should conduct a general (i.e. non China-specific) review of
Code of Conduct. 

-- Italy: Intervened with same points as Austria. 

-- Belgium: More discussion needed of implications, including
on human rights, of any decision to lift embargo. 

-- Commission: Took no position on lifting embargo but said
EU should remain focused on human rights. 

Other member states did not intervene in the PSC discussion. 

-------------------------------------
Timeline: Back to the Working Groups?
------------------------------------- 

¶6. (S/NF) The PSC will meet again on this issue on April 7,
when it is expected to approve an "issues paper" which will
then be sent through COREPER to FMs for discussion at the
April 26 GAERC.  According to our UK and Hungarian contacts,
the paper is intended as a tour d'horizon for the GAERC
discussion.  It will not contain recommendations, and FMs are
not expected to take a decision.  Instead, they will likely
send the paper back down to the PSC for re-examination.  Most
PSC Ambassadors, having satisfied the French desire for a
ministerial discussion in April, will then press France to
accept the majority preference for sending the issue back to
the working groups.  The working groups would need two to
three months, minimum, to complete their assessments and
submit their papers to the PSC (EU working groups are
comprised of capital-based experts who rarely meet more than
once per month).  The relevant working groups are COHUM
(human rights), COASI (Asia Directors), and COARM
(conventional arms exports). 

¶7. (S/NF) What all this means is that the debate will likely
continue well into the Dutch Presidency.  Already, Member
States are beginning to look toward the December EU-China
Summit as a possible timeframe for any decision to lift the
embargo.  We have heard they are also looking at the US
electoral calendar and quietly wondering whether it would be
worth holding off their decision until November or December
in the hopes of sneaking it past the US radar.  They have not
and will not discuss such issues openly, even amongst each
other in the PSC, but our UK contact confirms that quiet
conversations and suggestive comments are going on in the
wings. 

---------------------
Next Steps for the US
--------------------- 

¶8. (S/NF) Our efforts have managed to slow down the momentum
in favor of removing the arms embargo, but have not killed
this idea outright.  In addition to the ongoing diplomatic
dialogue on this issue, we recommend the following steps to
help us keep the pressure on European governments: 

-- We should coordinate closely with Japan, and perhaps also
the ROK.  According to numerous EU interlocutors, the
Japanese have become increasingly active on this issue, but
their efforts appear so far uncoordinated with our own.
While this may have served our interests in the sense that it
gave the Europeans the impression that Japan's concerns were
genuine and not dictated by Washington, it is now time to
begin coordinating our efforts, so that Europeans recognize
that other key players in the region share our regional
stability concerns. 

-- We should engage the European Parliament, and particularly
members of its Human Rights Committee.  The EP is already on
record opposing an end to the embargo.  By calling attention
to EU deliberations and ongoing Chinese human rights abuses,
the EP could increase the political heat on member state
governments against any decision to lift the embargo. 

-- We should consider increasing our public statements and
press briefings for European audiences, on the assumption
that more scrutiny by European publics would help our views
on this issue, especially as regards human rights. 

-- We should increase our engagement with institutional and
member state representatives to the COHUM, COASI and COARM
working groups.  In this way we could ensure that our views
on human rights, regional stability and the Code of Conduct
are fully understood by those experts who will be supplying
recommendations to the political groups for discussion. 

-- Additionally, as suggested ref B, we recommend the USG
begin considering options for how the EU might strengthen
controls on arms exports to China in a post-embargo scenario.
 The worst case for us would be for the EU to lift its
embargo without having in place some sort of new mechanism
for controlling the transfer of arms and sensitive
technologies to China. 

Schnabel