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Viewing cable 06ZAGREB1467, CROATIA ON CEFTA: SIGN AND KEEP TALKING

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Reference ID Created Released Classification Origin
06ZAGREB1467 2006-12-12 14:47 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Zagreb
VZCZCXYZ0010
PP RUEHWEB

DE RUEHVB #1467 3461447
ZNR UUUUU ZZH
P 121447Z DEC 06
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC PRIORITY 7032
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
UNCLAS ZAGREB 001467 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/SCE; EUR/ACE 
 
E.O. 12958: N/A 
TAGS: ETRD PREL PGOV HR BK SY
SUBJECT: CROATIA ON CEFTA: SIGN AND KEEP TALKING 
 
REF: A. STATE 197229 
 
     B. SARAJEVO 3130 
     C. SARAJEVO 3111 
     D. ZAGREB 1400 
     E. BELGRADE 1974 
 
1. (SBU) In a December 11 meeting with Croatian MFA State 
Secretary Hido Biscevic, Ambassador urged the GOC to show 
 
SIPDIS 
flexibility in working to find a solution to the current 
disagreement with Bosnia over CEFTA, stressing Croatia's role 
in the region and the fact that a CEFTA without Bosnia would 
be a hollow agreement.  Biscevic said that the fact that 
Serbia was prepared to sign the agreement made it easier to 
deal with BiH.  Without revealing specifics of Croatia's 
position, he said he was convinced that Bosnia would part of 
the agreement. 
 
2.  (SBU) Econoff followed up with the same message on 
December 12 to Assistant Minister of Economy Igor Lucic. 
Lucic said that Croatia was encouraging Bosnia to sign, 
pointing out that Articles 23 and 24 of the CEFTA agreement 
contain provisions for the implementation of safeguards that 
Bosnia could have recourse to if it believes particular 
sectors were being damaged by Croatian imports.  He said that 
the important element for Croatia is that safeguards would be 
applied to all CEFTA members and not only to Croatia, 
reflecting a view here that Bosnia does not have sufficient 
domestic capacity for import substitution.  Lucic pointed to 
the fact that Croatian agricultural exports to Bosnia fell by 
1 percent in 2005 and were set to continue that trend in 
2006, even as current duties apply to only 15 percent of 
agricultural exports. 
 
3.  (SBU) Comment: Although the Ministry of Economy has led 
the negotiations for Croatia, PM Sanader is clearly calling 
the shots.  Croatia so far has shown no signs that it is 
prepared to back down on this issue, although the GOC is 
clearly sensitive to the pressure being put on it and does 
not want to be blamed for precipitating a failure of CEFTA. 
Zagreb's preferred way forward appears to be to have BiH sign 
the agreement and then keep talking without the pressure of 
the Dec 19 date in the background. End Comment. 
BRADTKE