USG OPPOSITION TO EU PROPOSAL TO

UNCLAS ROME 003422 SIPDIS SECSTATE FOR EB/TPP/AND EUR USDA FOR FAS/ITP/EAMED AND CMP/GFD DEPT PLEASE PASS TO USTR E.O. 12958: N/A TAGS: EAGR ETRD IT EUN SUBJECT: USG OPPOSITION TO EU PROPOSAL TO MODIFY GRAIN IMPORT REGIME DISCUSSED WITH BELGIAN TRADE MINISTRY ¶1. ITALY'S AGMIN PARTICIPANT IN THE 133 COMMITTEE MEETING AND SUBSEQUENT SPECIAL UNCLASSIFIED PAGE 02 ROME 03422 111258Z COMMITTEE ON AGRICULTURE REPORTS THAT THE COMMISSION'S PROPOSAL TO RECTIFY THE MARGIN OF PREFERENCE FOR GRAINS WAS SOLIDLY REJECTED BY MOST, IF NOT ALL DELEGATIONS, ALBEIT FOR DIFFERENT REASONS. ITALY EXPECTS THAT THE COMMISSION WILL HAVE TO GO BACK TO THE DRAWING BOARD. ¶2. ITALY PREFERS TO MAINTAIN THE CURRENT MARGIN OF PREFERENCE SYSTEM WHILE TAKING SEPARATE ACTION AGAINST GRAIN IMPORTS FROM THE BLACK SEA REGION. ITALY SEES THIS AS AN EXPEDIENT AND VIABLE OPTION GIVEN NEITHER UKRAINE NOR RUSSIA ARE WTO MEMBERS. TARIFF RATE QUOTAS ARE NOT THE ANSWER ACCORDING TO OUR CONTACT. THIS IS CONSISTENT WITH ITALY'S STATUS AS A LARGE NET IMPORTER OF HIGH-QUALITY WHEAT. ¶3. WITH RESPECT TO RICE, ITALY BELIEVES THE EU MADE A MISTAKE AT THE END OF THE URUGUAY ROUND WHEN IT CALCULATED THE IMPORT DUTY FOR RICE ON A PADDY BASIS RATHER THAN ON A ROUGH BASIS, AND THAT THIS ERROR SHOULD BE CORRECTED. THAT SAID, ITALY TOLD THE 133 COMMITTEE THAT RECTIFICATION OF THE RICE DUTY SHOULD NOT BE TIED TO ACTION ON THE MOP FOR GRAINS. SEMBLER UNCLASSIFIED > 2002ROME03422 - Classification: UNCLASSIFIED