Cable Viewer

Currently released so far... 4085 / 251,287

### Articles

Brazil Sri Lanka United Kingdom Sweden Editorial United States Latin America Egypt Yemen Jordan

### Browse latest releases

2010/11 2010/12 2011/01 2011/02
2010/11/28 2010/11/29 2010/11/30
2010/12/01 2010/12/02 2010/12/03 2010/12/04 2010/12/05 2010/12/06 2010/12/07 2010/12/08 2010/12/09 2010/12/10 2010/12/11 2010/12/12 2010/12/13 2010/12/14 2010/12/15 2010/12/16 2010/12/17 2010/12/18 2010/12/19 2010/12/20 2010/12/21 2010/12/22 2010/12/23 2010/12/24 2010/12/25 2010/12/26 2010/12/27 2010/12/28 2010/12/29 2010/12/30
2011/01/01 2011/01/02 2011/01/04 2011/01/05 2011/01/07 2011/01/09 2011/01/10 2011/01/11 2011/01/12 2011/01/13 2011/01/14 2011/01/15 2011/01/16 2011/01/17 2011/01/18 2011/01/19 2011/01/20 2011/01/21 2011/01/22 2011/01/23 2011/01/24 2011/01/25 2011/01/26 2011/01/27 2011/01/28 2011/01/29 2011/01/30 2011/01/31
2011/02/01 2011/02/02 2011/02/03 2011/02/04 2011/02/05 2011/02/06 2011/02/07 2011/02/08 2011/02/09 2011/02/10 2011/02/11 2011/02/12 2011/02/13 2011/02/14 2011/02/15 2011/02/16

### Browse by creation date

66 72 73 75 79 86 88 89 90 00 01 02 03 04 05 06 07 08 09 10
1966/12
1972/02 1972/08
1973/04
1975/03
1979/08
1986/05
1988/01
1989/12
1990/01 1990/07 1990/08
2000/06 2000/09 2000/11
2001/02 2001/03 2001/07 2001/10
2002/02 2002/03 2002/11
2003/03 2003/04 2003/05 2003/06 2003/07 2003/08 2003/09 2003/10 2003/11 2003/12
2004/01 2004/02 2004/03 2004/04 2004/05 2004/06 2004/07 2004/08 2004/09 2004/10 2004/11 2004/12
2005/01 2005/02 2005/03 2005/04 2005/05 2005/06 2005/07 2005/08 2005/09 2005/10 2005/11 2005/12
2006/01 2006/02 2006/03 2006/04 2006/05 2006/06 2006/07 2006/08 2006/09 2006/10 2006/11 2006/12
2007/01 2007/02 2007/03 2007/04 2007/05 2007/06 2007/07 2007/08 2007/09 2007/10 2007/11 2007/12
2008/01 2008/02 2008/03 2008/04 2008/05 2008/06 2008/07 2008/08 2008/09 2008/10 2008/11 2008/12
2009/01 2009/02 2009/03 2009/04 2009/05 2009/06 2009/07 2009/08 2009/09 2009/10 2009/11 2009/12
2010/01 2010/02

### Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z
Embassy Athens Embassy Asuncion Embassy Astana Embassy Asmara Embassy Ashgabat Embassy Ankara Embassy Amman Embassy Algiers Embassy Addis Ababa Embassy Accra Embassy Abuja Embassy Abu Dhabi Embassy Abidjan Consulate Amsterdam American Institute Taiwan, Taipei
Embassy Bujumbura Embassy Buenos Aires Embassy Budapest Embassy Bucharest Embassy Brussels Embassy Bridgetown Embassy Bratislava Embassy Brasilia Embassy Bogota Embassy Bishkek Embassy Bern Embassy Berlin Embassy Belgrade Embassy Beirut Embassy Beijing Embassy Banjul Embassy Bangkok Embassy Bandar Seri Begawan Embassy Bamako Embassy Baku Embassy Baghdad Consulate Barcelona
Embassy Copenhagen Embassy Conakry Embassy Colombo Embassy Chisinau Embassy Caracas Embassy Canberra Embassy Cairo Consulate Curacao Consulate Casablanca Consulate Cape Town
Embassy Dushanbe Embassy Dublin Embassy Doha Embassy Djibouti Embassy Dhaka Embassy Dar Es Salaam Embassy Damascus Embassy Dakar Consulate Dubai
Embassy Freetown
Embassy Guatemala Embassy Gaborone
Embassy Harare Embassy Hanoi Consulate Hamburg
Iran RPO Dubai Embassy Islamabad Consulate Istanbul
Embassy Jakarta Consulate Jerusalem Consulate Jeddah
Embassy Kyiv Embassy Kuwait Embassy Kuala Lumpur Embassy Kinshasa Embassy Kigali Embassy Khartoum Embassy Kampala Embassy Kabul
Embassy Luxembourg Embassy Luanda Embassy London Embassy Lisbon Embassy Lima Embassy Lilongwe Embassy La Paz Consulate Lagos
Mission USNATO Embassy Muscat Embassy Moscow Embassy Montevideo Embassy Monrovia Embassy Minsk Embassy Mexico Embassy Maputo Embassy Manama Embassy Managua Embassy Malabo Embassy Madrid Consulate Munich Consulate Montreal Consulate Monterrey
Embassy New Delhi Embassy Nassau Embassy Nairobi Consulate Naples
Embassy Ouagadougou Embassy Ottawa Embassy Oslo
Embassy Pristina Embassy Pretoria Embassy Prague Embassy Port Au Prince Embassy Phnom Penh Embassy Paris Embassy Paramaribo Embassy Panama Consulate Peshawar
Embassy Quito
REO Basrah Embassy Rome Embassy Riyadh Embassy Riga Embassy Reykjavik Embassy Rangoon Embassy Rabat Consulate Rio De Janeiro Consulate Recife
Secretary of State Embassy Stockholm Embassy Sofia Embassy Skopje Embassy Singapore Embassy Seoul Embassy Sarajevo Embassy Santo Domingo Embassy Santiago Embassy Sanaa Embassy San Salvador Embassy San Jose Consulate Strasbourg Consulate Shenyang Consulate Shanghai Consulate Sao Paulo
Embassy Tunis Embassy Tripoli Embassy Tokyo Embassy The Hague Embassy Tel Aviv Embassy Tehran Embassy Tegucigalpa Embassy Tbilisi Embassy Tashkent Embassy Tallinn
USUN New York USEU Brussels US Mission Geneva US Interests Section Havana US Delegation, Secretary UNVIE Embassy Ulaanbaatar
Embassy Vilnius Embassy Vienna Embassy Vatican Consulate Vladivostok
Embassy Windhoek Embassy Wellington Embassy Warsaw
Embassy Yerevan Embassy Yaounde
Embassy Zagreb

### Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
AF AM AE AG AR ASEC AS AU AORC AJ AMGT AGMT AFIN APER ABUD ATRN AEMR ACOA AEC AO AX AMED ADCO AODE AFFAIRS AC AL ASIG ABLD AA AFU ASUP AROC ATFN AVERY
BM BR BRUSSELS BL BK BA BO BILAT BTIO BEXP BH BE BX BU BIDEN BY BG BF BB BC BBSR
CH CE CA CASC CU CLINTON CO CI CVIS CDG CIA CACM CDB CS CBW CD CV CMGT CJAN CG CF CN CAN COUNTER CIS CM CONDOLEEZZA COE CR CY CTM COUNTRY CLEARANCE CPAS CWC CT CKGR CB CACS COM CJUS CARSON COUNTERTERRORISM
DA DJ DEAX DR DHS DOE DEA DK DISENGAGEMENT DS DOD
EUN EG EAID ENRG ETTC EFIN ECON ETRD EPET EINV EMIN ECIP ECPS EINDETRD EAGR EU EN EZ ELAB ER ET ES EUC EI EAIR EIND EWWT ELTN EREL ECIN EFIS EINT EC ENVR ECA ELN EXTERNAL EINVETC ENIV EINN ENGR EUR ESA ENERG EK ELECTIONS ECUN EINVEFIN
FR FJ FINR FAO FTAA FREEDOM FI FARC FBI FMLN
GM GG GV GH GA GE GT GR GTIP GOI GCC GAZA GZ GTMO
HILLARY HA HU HR HUMAN HO HYMPSK HURI HK HSTC
IR IS IZ INRB IAEA IN IT ID IO IV ICTY IQ ICAO INTERPOL IPR IRAJ INRA INRO IC IIP ITPHUM IWC ISRAELI IRAQI ICRC IMO IF ILC IEFIN INTELSAT IL IA IBRD IMF ITALY ITALIAN
JAMES JO JA JOSEPH JP JOHNNIE JUS
KCOR KDEM KNNP KU KWBG KPAL KN KS KZ KAWK KISL KPAO KCRM KJUS KSEC KIPR KGHG KIFR KTFN KDRG KV KSUM KWAC KAWC KDEMAF KFIN KGIC KTIP KOMC KHLS KSPR KGCC KPIN KG KBIO KHIV KSCA KE KFRD KPKO KNUC KMDR KPLS KOLY KUNR KIRF KIRC KACT KRAD KCOM KMCA KHDP KVPR KDEV KWMN KTIA KPRP KCIP KCFE KOCI KTDB KMRS KLIG KBCT KICC KGIT KSTC KPAK KNEI KSEP KPOA KFLU KNUP KNNPMNUC KO KTER KHUM KRFD KBTR KDDG KWWMN KFLO KSAF KBTS KPRV KMPI KNPP KNAR KWMM KERG KTBT KCRS KRVC KREL KR KPWR KMIG
LE LY LG LH LU LI LO LOG LT
MOPS MZ MO MNUC MASS MARR MY MEPP MCAP MA MR ML MX MIL MTCRE MPOS MOPPS MTCR MAPP MU MG MASC MCC MK MTRE MP MDC MAR MEPI MRCRE MI MT MQADHAFI MD MAPS MUCN MASSMNUC
NATO NI NZ NG NU NO NL NIPP NPT NE NS NAR NPG NK NSG NA NT NASA NGO NP NSF NATIONAL
OTR OVIP OVP OREP ODIP OPDC OPRC OIIP OFFICIALS OSAC OAS OEXC OFDP OTRA OSCE OPIC OECD OPCW OSCI OIE
PREL PTER PGOV PO PHUM PINS PARM PK PINR PINT PBTS PROP PE PL PREF POGOV PINL POL PBIO PSOE PHSA PKFK PGOF PARMS PA PM PMIL PTERE PF PALESTINIAN PY PGGV PNR POV PAK PAO PFOR PHALANAGE PARTY PNAT PROV PEL PINF PGOVE POLINT PRL PRAM POLITICS PEPR PSI PU POLITICAL PARTIES PECON
QA
RS RU RO RW REGION RP RIGHTS RICE ROBERT RF RFE
SNAR SA SY SOCI STEINBERG SP SENV SCUL SF SO SR SG SW SU SL SMIG SN SHUM SZ SYR ST SANC SC SAN SIPRS SK SH SI
TI TU TC TRGY TX TS TBIO TW TSPA TH TIP TR TT TERRORISM TO TFIN TD TSPL TZ TPHY TK TNGD
UNSC UP UK USEU UG UNMIK UV UZ UY UN US UNGA UNO USUN UE UNESCO UAE UNEP USTR UNHCR UNDP UNHRC USAID UNCHS UNAUS
VT VE VTPREL VZ VN VM
WTRO WTO WA WI WMO WTRQ WHO WWARD WB WBG
XF XA XG XT XM XR XS XL XK XH XY XC XZ XW XD
YM YE YI
ZU ZI ZP ZR ZB ZF ZK ZANU ZOELLICK ZA

### Browse by classification

CONFIDENTIAL CONFIDENTIAL//NOFORN SECRET SECRET//NOFORN UNCLASSIFIED UNCLASSIFIED//FOR OFFICIAL USE ONLY

### Community resources

Follow us on Twitter Check our Reddit Twitter this Digg this page Contact us on IRC

courage is contagious

### Viewing cable 08LONDON3196, TRADE AND FINANCE EXPERTS SOUND THE ALARM

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:

- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08LONDON3196.

Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08LONDON3196 | 2008-12-22 16:04 | 2011-02-04 21:09 | UNCLASSIFIED | Embassy London

`

    VZCZCXRO2580
    PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
    DE RUEHLO #3196/01 3571612
    ZNR UUUUU ZZH
    P 221612Z DEC 08
    FM AMEMBASSY LONDON
    TO RUEHC/SECSTATE WASHDC PRIORITY 0762
    INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
    RHEHNSC/NSC WASHDC PRIORITY
    RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

` `

    UNCLAS SECTION 01 OF 02 LONDON 003196

    SIPDIS

    E.O. 12958: N/A
    TAGS: EFIN ECIN ETRD EINV EUN EU UK
    SUBJECT: TRADE AND FINANCE EXPERTS SOUND THE ALARM

    Summary
    -------

    ¶1. European trade and finance experts speaking at a December 18 HMG-sponsored conference in London spoke of an "acute crisis" in trade and finance that "puts world trade genuinely under threat."  The credit crisis has administered two blows to world trade by: (1) decreasing economic activity and (2) by disrupting the system of trade finance and insurance that 80 to 90 percent of trade depends upon.  They urged the UK government to make trade an important focus of its G20 presidency and urged international cooperation in propping up trade finance and insurance.  End summary.

    Trade is in Trouble -------------------

    ¶2.  At a December 18th conference in London titled, "What world leaders must do to halt the spread of protectionism," academic economists and WTO staff (speaking in personal capacities) agreed that the $12 trillion world trading system is already showing signs of distress and government action is required to prevent it from "collapsing."

    ¶3.  Richard Portes (London Business School) and Richard Baldwin (Center for Economic Policy Research, CEPR) said that trade statistics and indicators are bleak.  Recent figures show Chinese imports decreasing by 18 percent.  The "Baltic Dry Index" which shows the cost of shipping goods is falling precipitously, an indicator of shrinking trade.  Their international network of analysts believes that trade barriers are increasing as countries are beginning to try to protect domestic employment.  Their conclusion is that international trade is heading towards a "radical and rapid fall."

    ¶4.  Portes and Baldwin said that this crisis is unlike previous recessions because it is "not your usual capital account crisis"; the trade shock set off by the credit crisis is striking at manufacturing.  The 2009 recession is going to be "sector specific" rather than with widespread, balanced, effects, making it difficult to deal with using traditional tools.  The emerging markets cannot "ride out" this type of crisis and will have to resort to policies to stimulate exports, including competitive devaluations.  Given that the alternative will be social unrest, it will be hard to persuade them to do otherwise.  The U.S. Congress, they predicted, will not be passive in the face of cheapening imports and the international dialogue will sour.  Congress is already "angry" with Chinese exchange rate policies; China is increasingly "angry" with the U.S. for having "mismanaged its economy."  The atmosphere for cooperation in trade or climate change will be poisoned by the trade crisis.

    ¶5.  Portes and Baldwin had three recommendations for the G20: (1) agree to use macro approaches to promote economic recovery, not trade restrictive measures; (2) wrap up the Doha modalities; and (3) ask the WTO and IMF to set up a surveillance mechanism to record protectionist measures. They may be impossible to prevent, but at least keeping track of their introduction may make it easier to dismantle them quickly after the economy eventually improves, rather than having to painstakingly negotiate them away.

    The Crisis in Trade Finance and Insurance -----------------------------------------

    ¶6.  Marc Auboin of the Trade and Finance Division of the WTO told the conference, speaking "in a personal capacity" that it is very difficult to obtain reliable statistics on trade finance (the IFI's gave up trying in 2003) but it appears anecdotally that the cost of credit and insurance has tripled in the past few months -- for those companies that can obtain them.  New customers have little chance of convincing increasingly conservative banks to assist them.  Auboin estimated that in November 2008, $25-30 billion in trade did not happen because the companies involved were unable to obtain credit or insurance.  The situation is becoming worse.

    ¶7.  Auboin said that part of the crisis is because over the past 10-15 years, an increasing amount of international trade was financed on an "open account" basis, meaning simply that traders were prepared to ship on the basis of a handshake -- without any formal credit or insurance at all.  This has stopped cold because the companies' banks now demand formal assurances and protections.  The credit and insurance markets are being overwhelmed by the demand for new (and old, such as letters of credit) financial instruments.  Even for credit-worthy traders, the cost of the time it takes to arrange the credit and insurance instruments is a significant new burden -- a further drag on economic activity.  LONDON 00003196  002 OF 002

    ¶8.  Trade finance has not received much attention in the past because it was considered one of the safest and most routine investments.  This required a shared assumption that the flow of materials, parts, and support of major manufacturers could not be considered risky.  Auboin said that if a globally-playing major manufacturer fails in the next few months, the global trade finance and insurance system could become paralyzed, with incalculable effects on world trade.

    ¶9.  Auboin's advice to the G20 was that they initiate a coordinated effort to prop up trade finance and insurance -- through co-financing or risk-sharing.  In the past, such steps would have been considered questionable trade subsidies "but no one is going to be litigious in the current crisis -- everyone knows they may have to do the same."  The amount of money required would be modest because most trade financing remains objectively safe -- contrary to the bankers' fears. A more difficult question is what can be done to help countries such as Pakistan and Ukraine, which are rapidly becoming uncreditworthy.  Because the elements that contribute to their lack of creditworthiness are difficult to untangle, it is difficult for the international community to know what specific actions can be taken to make them appear to be safe borrowers.

    Comment
    -------

    ¶10.  This conference was not the first time we've heard in London that the credit crisis is overshadowing an impending trade crisis.  One of the speakers noted that the estimated annual benefits of a successful trade round are less than the financial markets have had wiped off their books on any one of several days in the past four months.  However, trade will be key to the recovery, when it comes, and a round of protectionist measures would alarm world markets even more than they are already alarmed.  As one of the speakers put it, "A new round of protectionism could turn a "V-shaped" recession into one that is "L-shaped."  Visit London's Classified Website: XXXXXXXXXXXX
    TUTTLE

`