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Viewing cable 07PARIS1709, CODEL OBERSTAR VISIT TO FRANCE, APRIL 3-6 2007
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
07PARIS1709 | 2007-04-27 16:40 | 2011-08-24 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Paris |
VZCZCXRO9756
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHFR #1709/01 1171640
ZNR UUUUU ZZH
R 271640Z APR 07
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 6819
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
UNCLAS SECTION 01 OF 03 PARIS 001709
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: EAIR ECON ETRD PREL FR
SUBJECT: CODEL OBERSTAR VISIT TO FRANCE, APRIL 3-6 2007
-------
SUMMARY
-------
¶1. (SBU) Chairman James Oberstar and seven members of the House
Transportation and Infrastructure Committee visited France April
3-6. They met with the Minister of Transportation, the Minister
Delegate for Trade, the Director General of Civil Aviation, as well
as CEOs from Airbus, Air France and FEDEX Express. They heard
positive reaction to the U.S./EU Open Skies agreement, GOF concerns
about U.S. draft legislation on 100% freight inspection, and
Europe's growing interest in the environmental impact of
transportation. Tours of the Thalys TGV, Airbus and Fedex
facilities, and a dinner hosted by counterparts from the French
National Assembly rounded out their program.
--------------------------
Minister of Transportation
--------------------------
¶2. (SBU) Minister Perben hosted the delegation for breakfast on
April 3. He began discussion by noting France's strong support for
the U.S./EU Open Skies agreement recently initialed in Brussels.
Chairman Oberstar recognized the key importance of the
trans-Atlantic market for aviation, and observed that there had been
a frank discussion about foreign investment and control. The new
agreement was an improvement, but in his view restrictions on
investment and control in U.S. airlines would remain.
¶3. (SBU) Perben also raised French concerns about proposals for 100%
cargo inspection, noting that France had a system that sought to
secure the entire supply chain, effectively providing 100%
inspection, including for flights to the U.S. Chairman Oberstar
observed that the U.S. was moving in the opposite direction: 9/11
had changed our approach. The ideal would be to provide a
harmonized system for freight, similar to that which has been
implemented worldwide post 9/11, a point echoed by Congressman
Costello. Perben also warned that plans for 100% screening of
maritime containers would have serious economic consequences.
Chairman Oberstar replied that Congress was aware of this, but Hong
Kong had shown that it could be done. Greater U.S. cooperation with
France and EU was necessary both to improve technology and to create
additional layers of security.
¶4. (SBU) Congresswoman Fallon raised the issue of the proposed EU
Emissions Trading Scheme (ETS) for aviation. Chairman Oberstar
observed that the U.S. had already made considerable reductions in
emissions compared with Europe, and that U.S. planes were in any
case a small part of an international problem that could not be
approached by the EU in a unilateral manner. The best solution
would be via ICAO, an approach the EU had supported in the past for
noise reduction. Perben argued that the EU approach sought to use
market incentives to encourage airlines to invest in
emissions-reducing technology; Oberstar agreed that technology was a
preferred means of addressing the problem, but underlined that the
U.S. had real problems with EU approaches to noise or emissions that
would hinder future development of air transportation.
¶5. (SBU) Finally, Perben observed that France was in a phase of
substantial investment in infrastructure, and foresaw a funding
increase for rail and waterways of 40% over the next 6 years.
Chairman Oberstar observed the U.S. was moving in the same
direction, mentioning ambitious plans for new locks on the
Mississippi as an example. Perben indicated France was also looking
to the private sector to help finance projected infrastructure
development, and was studying ways of modernizing toll collection to
assist with this.
¶6. (SBU) Attendees on the French side were: Dominique Perben,
Minister of Transportation and Equipment, Tourism and the Sea;
Olivia Amozig-Bellot, technical counselor; Olivier Berthelot,
technical counselor; Didier Lallement, Director General of Civil
Aviation; Dominique Bureau, Director of Economic and International
Affairs MOT, Aude Vermot-Gaud, Economic and International Affairs
MOT, Patrick Vieu, Director of Rail and Mass Transit MOT; Patrick
Paris, Director General of Roads, MOT. Codel Oberstar was joined
by Ambassador Craig Stapleton, FAA Senior Representative Lirio Liu,
and Econoff.
---------------------------
Minister Delegate for Trade
---------------------------
¶7. (SBU) Minister Delegate for Trade Christine Lagarde hosted a
breakfast meeting April 4. She began the meeting by providing an
overview of the current French presidential campaign, emphasizing
the virtues of her UMP party candidate Nicholas Sarkozy and the
faults, as she saw them, of Socialist candidate Segolene Royale and
centrist Francois Bayrou. She expressed doubts about the long-term
viability of the Socialist Party given divisions between its left
and center, and surprise at the popularity of Bayrou given his thin
record of accomplishment. In response to questions, she noted that
Iraq was not a French campaign issue and that the real problems
PARIS 00001709 002 OF 003
SUMMARY
-------
faced by immigrants and the poor should not be confused with
religious questions.
¶8. (SBU) Turning to international trade, Lagarde praised cooperation
between France and the U.S. on port security, protection of
intellectual property, and the U.S./EU Open Skies agreement. She
warned that many details remained to be settled in the next 6 months
after signature of the agreement, and that the UK would bear close
watching for signs of backsliding. Oberstar agreed that British
Airways was losing an extremely lucrative monopoly over its slots at
Heathrow, but that the EU was fully aware of the problem. Oberstar
concluded with his view that rather than super-consolidation of the
U.S. market to 2 or 3 carriers, what it should aim for in coming
years was greater competition between many carriers, an approach
that Lagarde favorably characterized as "competition with
regulation."
¶9. (SBU) Attendees for the French were Christine Lagarde, Minister
Delegate for Trade; Stanislaus Pottier, Director of the Minister's
Cabinet; Philippe Pgorier, Diplomatic Advisor; David Emond,
Technical Advisor; Philippe Bouyoux, Director of Economic Policy,
Treasury and Economic Policy General Directorate. Codel Oberstar
was joined by Ambassador Craig Stapleton and Econoff.
-----------
Airbus/EADS
-----------
¶10. (SBU) Codel Oberstar met with Airbus CEO and European Aeronautic
and Space Defense (EADS) co-CEO Louis Gallois April 4. Chairman
Oberstar noted Congressional concern about Airbus links to European
government, and its benefiting from subsidies currently subject to
litigation in the U.S./EU case before the WTO. Gallois emphasized
that Airbus remained interested in finding a compromise solution,
and that it had suspended reimbursable loans for the A-350 in order
to favor such a result. He noted that on past loans such as for the
A-320, Airbus paid the loan back and in addition paid royalties.
For the A-380, repayments would be due upon delivery of the
aircraft.
¶11. (SBU) Gallois also emphasized the significant U.S. participation
in Airbus activities. It was a partner with GE and Northrup Grumman
in the competition for a new U.S. military tanker plane; it sourced
46% on average of its purchases in the U.S.; while it was in favor
of the U.S./EU Open Skies agreement as favoring overall development
of the market for aircraft it had no strong views on ownership and
control of U.S. airlines.
¶12. (SBU) On the future market for aircraft, Gallois noted that
there was great uncertainty in the market, with some regions opting
for smaller aircraft, but with environmental and airport constraints
pushing in other cases for larger aircraft such as the A-380. He
noted the importance of environmental considerations in Europe, and
the potential contributions of both new engine technology and
improvements in Air Traffic Control (ATC) and management to reducing
emissions. Oberstar expressed his interest in a major redesign of
the U.S. ATC system to take advantage of modern technology.
¶13. (SBU) Airbus/EADS participants were Louis Gallois, CEO Airbus,
Co-CEO EADS ; Nicolas Naudin, EADS; Jodie Moxley, Airbus North
America; Joel Johnson, Advisor to Airbus North America; Rob Wrigley,
Airbus North America. Embassy participants were Ambassador Craig
Stapleton; Thomas White, Acting DCM; Lirio Liu, Senior
Representative, FAA; Econoffs.
-----------
Air France
----------
¶14. (SBU) Jean-Cyril Spinetta began by hailing the U.S./EU Air
Transport Agreement, noting that the step-by-step approach it
envisioned was the right way to calm fears of disruptive
consequences. He noted that Air-France/KLM's U.S. alliance partners
Northwest Airlines and Delta were both out of chapter 11, and that
Air France and KLM would soon be seeking anti-trust immunity for an
expanded Joint Venture involving both of its U.S. allies. Chairman
Oberstar indicated that it was his belief that the USG was ready to
consider such an application favorably. Spinetta said that the
U.S./EU agreement, by enshrining the notion of a "European Carrier"
could provide the stable legal framework a company such as his,
formed by the merger of French and Dutch Airlines, needed.
¶15. (SBU) Spinetta predicted further cross-border consolidation in
the EU market, with larger carriers emerging and increasingly seeing
themselves as global players. He believed European consumers would
still have considerable choice, provided all cities retained good
network connections. On ETS, he underlined the overwhelming
importance of the cost of fuel, which would force airlines to renew
fleets and thereby increase fuel and environmental efficiency.
PARIS 00001709 003 OF 003
SUMMARY
-------
¶16. (SBU) For Air France attendees were: Jean Cyrill Spinetta CEO;
Guy Tardieu, Chief of Staff; Patrick Alexandre, Executive VP
International Commercial; Bruno Matteu, Executive VP Marketing and
Network Management; Dominique Patry, Executive VP International
Affairs and Alliances; Charles Yvinec, Director of Security. Codel
Oberstar was joined from the Embassy by: Thomas White, Acting DCM;
Lirio Liu, FAA Senior Representative; Nouri Larbi, TSA
Representative, Econoff.
-----
DGAC
-----
¶17. (SBU) At DGAC Codel Oberstar was greeted by the newly named
Director General of Civil Aviation Didier Lallement, who praised
Franco-American cooperation on civil aviation issues, and in
particular on aviation security, mentioning last summer's roll-out
of new regulations on liquids and gels as a good example of the
benefits of harmonizing approaches to aviation security.
¶18. (SBU) Codel Oberstar also received a lengthy brief on the
organization and financing of air navigation services in France.
DGAC had two budgets: a trust fund of some 1.8 Billion Euros, and a
general budget of 170 Million Euros. Revenue came from passenger
taxes, user fees, and charges to operators for Air Navigation
Services. DGAC was still transitioning to a system of full recovery
of costs for safety and supervision (e.g. pilots and mechanics
licenses), and currently recovered about 50% of costs. It had met
resistance due to the occasional lack of transparency of how costs
related to services, especially from the general aviation sector.
The Trust Fund was used to finance Air Navigation Services, with
transfers from the general budget to compensate for services
provided for free or at a reduced rate (e.g. to exempt military
aircraft, or flights from overseas departments). As the Parliament
moved to a performance based budgeting system, DGAC's performance
would be evaluated based on indicators such as its safety record,
traffic delays, and benchmarking of charges with other European
partners.
¶19. (SBU) Attendees for Civil Aviation Authority (DGAC): Didier
Lallement, Director General; Paul Schwach, Director of Strategic and
Techical Affairs; Marc Hamy Director of Aviation Navigation
Services; Florence Rousse, Director of Economic Regulation; Ren
Gaudin, Director of Aeronautical Programes and Cooperation; Maxime
Coffin, Director of Inspections and Safety Department; Jean-Michel
Bour, European and International Affairs. From the American
Embassy: Stuart Dwyer, Economic Counselor; Lirio Liu, Senior FAA
Representative; Nouri Larbi, TSA Representative; Econoff.
----------------------------------------
Thalys, Airbus, Fedex, National Assembly
----------------------------------------
¶20. (SBU) Codel Oberstar also had the opportunity to tour-and
Chairman Oberstar to take the helm of-the Thalys TGV train on the
Brussels Paris leg of their trip. They visited Airbus Facilities in
Toulouse April 3, where they observed the A-380 final assembly line,
and learned about Airbus' plans to overcome the plane's
well-publicized production delays, as well as the company's belief
that demand for the large-capacity plane would grow due to the
continuing growth of traffic and airport and environmental
constraints.
¶21. (SBU) April 4th Codel Oberstar visited Fedex's European hub at
Charles De Gaulle airport, which since its establishment in 1999 has
become the largest Fedex hub and investment outside the U.S. Fedex
Express CEO Charles Bronczek highlighted Fedex's plans to integrate
operations with France's high-speed rail network, for which it has
joined an association with other interested parties (CAREX).
Finally, the delegation was hosted by counterparts from the French
National Assembly (Deputies Yves Coussain and Axel Poniatowski) to a
dinner in the President of the Assembly's residence April 4.
¶22. (U) This cable was cleared by CODEL Oberstar.
STAPLETON