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 ITALY'>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

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2002ROME03422 - Classification: UNCLASSIFIED