EU BIOTECH: ITALIAN REACTION TO U.S. ANNOUNCEMENT

CONFIDENTIAL ROME 02150

SIPDIS

STATE PASS USTR FOR AMB. ZOELLICK, AMB. JOHNSON, NOVELLI
STATE PASS DEPARTMENT OF AGRICULTURE FOR SECY. VENEMAN,
PENN, HEGWOOD
STATE FOR E - U/S LARSON, EB - A/S WAYNE, EUR - PDAS RIES,
MORFORD, HENNESSEY-NILAND
WHITE HOUSE FOR NSC/NEC
GENEVA FOR USTR

E.O. 12958: DECL: 05/15/2013
TAGS: ETRD EAGR TBIO IT EUN
SUBJECT: EU BIOTECH: ITALIAN REACTION TO U.S. ANNOUNCEMENT
OF WTO BIOTECH CASE

REF: A. STATE 124277


B. STATE 125512

CLASSIFIED BY: ECONOMIC MINISTER COUNSELOR SCOTT KILNER FOR REASONS 1.5
(B) AND (D)


1. (C) SUMMARY: ITALIAN GOVERNMENT REACTION TO THE MAY 13 USG
ANNOUNCEMENT REQUESTING WTO CONSULTATIONS ON THE EU,S
MORATORIUM ON BIOTECH APPROVALS HAS BEEN RESTRAINED. FOREIGN
TRADE VICE MINISTER URSO SUGGESTED THAT RESOLUTION OF THE
BIOTECH CASE MIGHT BE POSSIBLE THROUGH LINKAGE WITH OTHER
DISPUTES, ALTHOUGH HE DID NOT FORESEE PROGRESS DURING THE
SIXTY DAY CONSULTATIONS PERIOD. AGRICULTURAL MINISTER
ALEMANNO, THE MOST OUTSPOKEN GOI OPPONENT TO BIOTECH, SO FAR
HAS DECLINED TO COMMENT ON THE U.S. ACTION. THE MINISTRY OF
ENVIRONMENT IS LIKELY TO DISENGAGE FROM EFFORTS TO IMPLEMENT
EU DIRECTIVE 01/018 WHILE THE WTO CASE IS PENDING, AND THE
MINISTER OF HEALTH, THOUGH PERSONALLY PRO-BIOTECH, WILL
CONTINUE TO DEFER TO ALEMANNO ON THE ISSUE. ITALIAN PRESS
REACTION HAS ALSO BEEN RATHER RESERVED. EMBASSY ROME AND
CONSULATES FLORENCE, MILAN AND NAPLES ARE WORKING TOGETHER TO
IMPLEMENT A ROBUST PUBLIC DIPLOMACY PROGRAM TO SUPPORT USG
BIOTECH POLICY IN LIGHT OF THE WTO CASE. END SUMMARY.

FOREIGN TRADE MINISTRY
--------------


2. (C) ECMIN INITIATED A MAY 14 MEETING WITH FOREIGN TRADE
VICE MINISTER ADOLFO URSO BY NOTING THAT, AFTER FIVE YEARS,
U.S. PATIENCE WITH THE CONTINUED EU MORATORIUM ON BIOTECH
APPROVALS HAD FINALLY RUN OUT. DESPITE REPEATED EU ASSURANCES
OVER THE YEARS, A SOLUTION STILL DOES NOT APPEAR IMMINENT.
IN ADDITION TO OUR CONCERNS THAT U.S. EXPORTS ARE BEING
EXCLUDED ILLEGALLY FROM THE EU MARKET, THE U.S. WORRIES
INCREASINGLY THAT THE EU MORATORIUM IS STIGMATIZING BIOTECH
PRODUCTS IN THE DEVELOPING WORLD. THE U.S. DECISION TO
INITIATE A CASE, IN PART, IS A MEANS TO STEM THE SPREAD OF
UNWARRANTED CONCERNS ABOUT BIOTECH PRODUCTS TO COUNTRIES THAT
WOULD BENEFIT FROM THEIR INTRODUCTION. ECMIN ADDED THAT OUR
DECISION TO PURSUE THIS CASE DID NOT IN ANY WAY LESSEN OUR
COMMITMENT TO WORK COOPERATIVELY WITH THE EU ON OTHER FRONTS,
PARTICULARLY THE DOHA WTO NEGOTIATIONS.


3. (C) URSO, WHO REITERATED HIS PERSONAL PRO-BIOTECH VIEWS,
SAID THAT THE U.S. DECISION SEEMED TO BE A STEP BACK IN
U.S.-EU TRADE RELATIONS, GIVEN RECENT POSITIVE STATEMENTS BY
USTR ZOELLICK AND EU TRADE COMMISSIONER LAMY ON ADVANCING THE
DOHA AGENDA. HE DISMISSED THE POSSIBILITY THAT ANY SOLUTION
COULD BE FOUND DURING THE INITIAL SIXTY-DAY CONSULTATION
PERIOD, GIVEN THE COMPLEXITIES INVOLVED IN HAVING ALL 15
MEMBER STATES TAKE POSITIVE ACTION. YET URSO THEN PROCEEDED
TO ADVANCE HIS OWN COMPLICATED IDEA -- THAT THE RANGE OF
U.S.-EU TRADE DISPUTES (STEEL, FSC, BIOTECH, GEOGRAPHICAL
INDICATORS, AND EVEN OUR COMPETING WTO AGRICULTURAL
PROPOSALS) SHOULD BE LINKED IN ORDER TO FACILITATE THEIR
SIMULTANEOUS RESOLUTION. HE SUGGESTED THAT EACH ISSUE COULD
BE NEGOTIATED SEPARATELY BUT IN PARALLEL, WITH THE CLEAR
UNDERSTANDING THAT TRADEOFFS WOULD BE NECESSARY. (COMMENT:
THIS IS A FAMILIAR THEME WITH GOI TRADE OFFICIALS, WHO HAVE
FREQUENTLY SUGGESTED THAT EU GIVE ON BIOTECH MIGHT BE
POSSIBLE IF THE U.S. SOFTENED ITS STAND OPPOSING THE EU,S
CALL FOR GREATER PROTECTION WITHIN THE WTO OF GEOGRAPHICAL
INDICATORS FOR FOODSTUFFS. END COMMENT.)


4. (C) ECMIN RESPONDED TO URSO,S SUGGESTION BY STATING THE
U.S. POSITION THAT THESE ARE SEPARATE DISPUTES THAT SHOULD BE
RESOLVED INDIVIDUALLY, EACH ON ITS OWN MERITS. WE DID NOT
WANT U.S.-EU BILATERAL DISPUTES TO INTERFERE WITH PROGRESS
BEING MADE IN THE DOHA ROUND TALKS. ITALY HAD THE RIGHT TO
PROPOSE SUCH AN IDEA (URSO SUGGESTED THE JUNE 25 U.S.-EU
SUMMIT, OR THE MARGINS THEREOF, COULD BE AN APPROPRIATE
VENUE),BUT RESOLUTION OF THE BIOTECH CASE WOULD NEED TO
INVOLVE ALL THE RELEVANT PLAYERS (INCLUDING THE COMMISSION,
THE OTHER EU MEMBER STATES, AND THE WTO CASE CO-COMPLAINANTS
CANADA, ARGENTINA AND EGYPT). URSO NEVERTHELESS PERSISTED,
SAYING HE WOULD DISCUSS THE IDEA OF A "GRAND BARGAIN" WITH
PRIME MINISTER BERLUSCONI, AND PERHAPS AFTERWARD WITH LAMY
AND WTO DIRECTOR-GENERAL SUPACHAI. (WE UNDERSTAND BOTH MAY
VISIT ROME THE WEEK OF MAY 19.)

ADDITIONAL GOI REACTION
--------------


5. (SBU) ECONOFF PROVIDED REFTEL MATERIAL ON THE WTO CASE TO
CLAUDIO SPINEDI, SENIOR ADVISOR TO MFA DIRECTOR GENERAL FOR
ECONOMIC COOPERATION GIANDOMENICO MAGLIANO. SPINEDI TOLD US
THAT THE GOI SHARES OUR CONCERN THAT THE ADVENT OF A WTO CASE
NOT HAVE A NEGATIVE EFFECT ON THE DOHA NEGOTIATIONS. HE
FURTHER NOTED THAT THE GOI HAS REFRAINED FROM PRESSURING
DEVELOPING COUNTRIES ON BIOTECH ISSUES (UNTIL RECENTLY
SPINEDI WAS AN OFFICE DIRECTOR IN THE MFA, DEVELOPMENT
ASSISTANCE BUREAU). WE ALSO LEFT RETEL MATERIAL WITH MASSIMO
GAIANI, OFFICE DIRECTO FOR EU ENLARGEMENT AND THIRD COUNTRY
RELATIONS, EUROPEAN INTEGRATION DIRETORATE.


6. (SBU) RAFFAEL DE LUTIO, DIPLOMATIC AVISOR TO MINISTER OF
AGRICULTURE ALEMANNO, TOLD AMINCOUNSELOR THAT THERE WAS "NO
REACTION" AT THEMINISTRY OF AGRICULTURE TO THE U.S.
ANNOUNCEMENT RATHER, MINISTER ALEMANNO WAS VERY CONCERNED
B AND FOCUSED ON THE APRIL 25 STAKEHOLDERS MEETING N
BRUSSELS THAT DISCUSSED CO-EXISTENCE. ACCORDIN TO DE LUTIO,
THE ITALIAN DELEGATION CAME AWAY FROM THAT MEETING
PESSIMISTIC THAT BIOTECH CROPS COULD BE GROWN WITHOUT
"CONTAMINATING HIGH QUALITY PRODUCTS".


7. (C) MINISTRY OF ENVIRONMENT DIRECTOR GENERAL CORRADO CLINI
TOLD ESTOFF THAT THE WTO CASE WAS NOW A EUROPEAN COMMISSION
PROBLEM. HE DOUBTED THAT THE ITALIAN PRESIDENCY, ESPECIALLY
GIVEN THE BERLUSCONI-PRODI STRAINS, WOULD BE INCLINED TO PLAY
AN ACTIVE ROLE. HE FORESAW THAT THE GOVERNMENT,S INTERNAL
PAPER ON THE IMPLEMENTATION OF EU DIRECTIVE 01/018 IN ITALY
WOULD NOW STALL, AND THAT THE ENVIRONMENT MINISTRY,S PLAN TO
MANAGE CONCILIATION OF THE COMMISSION AND EUROPEAN PARLIAMENT
VERSIONS OF TRACEABILITY AND LABELING WOULD BE PUT ASIDE. HE
MENTIONED A MAY 28 MEETING BETWEEN MINISTER OF ENVIRONMENT
MATTEOLI AND COMMISSIONER WALLSTROM TO DISCUSS ITALIAN
PRESIDENCY GOALS, AND ENCOURAGED CONTACT BEFOREHAND BETWEEN
U/S LARSON AND PM DIPLOMATIC ADVISOR GIOVANNI CASTELLANETA IF
THE USG WANTED ANY ITALIAN LEADERSHIP TO COME FROM THE MAY 28
MEETING. THINKING MORE EXPANSIVELY, CLINI SUGGESTED PM
BERLUSCONI MIGHT BEST BE POSITIVELY ENERGIZED ON BIOTECH
THROUGH COMMUNICATION FROM UK PM BLAIR.


8. (SBU) VITTORIO SILANO, HEAD OF INTERNATIONAL AFFAIRS AT
THE MINISTRY OF HEALTH, TOLD US THAT WHILE MINISTER OF HEALTH
SIRCHIA WAS FULLY SUPPORTIVE OF BIOTECHNOLOGY IN SCIENTIFIC
TERMS, THE MINISTER HAD DISENGAGED HIMSELF FROM THE DOMESTIC
POLITICAL DEBATE BECAUSE OF MINAG ALEMANNO,S STRONG
"LEADERSHIP" ON THE ISSUE. SILANO SAID HE WOULD IMMEDIATELY
BRING THE BACKGROUND PAPERS SUPPORTING THE U.S. DECISION TO
THE MINISTER, BUT LEFT LITTLE HOPE THAT THE MINISTER MIGHT
ENGAGE.

PRESS REACTION AND PUBLIC DIPLOMACY OUTREACH
--------------


9. (U) INITIAL PRESS REACTION HAS BEEN SOMEWHAT RESERVED.
MOST PRESS ACCOUNTS OF THE U.S. ANNOUNCEMENT STUCK TO THE
ARGUMENTS PUT FORWARD BY THE USG, ALONG WITH SOME OF THE
WIDELY-REPORTED EU REACTION BUT ALMOST NO GOI REACTION.
ROME'S LEFT-LEANING DAILY LA REPUBBLICA HAD A TWO PAGE
SPREAD, INCLUDING SOME COMMENTARY THAT ATTEMPTED TO LINK THE
DISPUTE WITH SEEMINGLY UNRELATED ISSUES (U.S. REFUSAL TO JOIN
THE INTERNATIONAL CRIMINAL COURT, EUROPEAN OPPOSITION TO THE
DEATH PENALTY, ECHELON/PRIVACY, U.S. BOYCOTT OF FRENCH
PRODUCTS RELATED TO IRAQ). LIKE OTHER PRESS REPORTS, ITS
COVERAGE DID NOT INCLUDE ANY GOI REACTION -- MOREOVER, IT HAD
NO COMMENTS FROM NGOS THAT HAVE IN THE PAST EXPRESSED VOCAL
OPPOSITION TO BIOTECH FOOD.


10. (U) PA ROME IS WORKING CLOSELY WITH RELEVANT EMBASSY
OFFICES (ECON, FAS, SCIENCE) AND THE CONSULATES IN NAPLES,
MILAN, AND FLORENCE TO DEVELOP A ROBUST PUBLIC DIPLOMACY
PROGRAM TO SUPPORT USG BIOTECH POLICY IN THE LIGHT OF THE WTO
CASE. WE HAVE TRANSLATED AND SENT THE USDA PRESS RELEASE ON
THE WTO CASE TO ITALIAN MEDIA, AND HAVE PLACED IT ON THE
EMBASSY WEBSITE ALONG WITH OTHER INFORMATION SUPPORTING USG
BIOTECH POLICY. ON MAY 27-30 WE WILL PARTICIPATE WITH THREE
U.S. SPEAKERS IN A MAJOR BIOTECHNOLOGY CONFERENCE ("FROM THE
GREEN REVOLUTION TO THE GENE REVOLUTION") IN BOLOGNA, DURING
WHICH WE WILL DISSEMINATE INFORMATION TO SUPPORT THE U.S.
POSITION IN THE WTO CASE. WE ARE ALSO FUNDING A U.S. SPEAKER
TO PARTICIPATE IN A JUNE 30 CONFERENCE IN MILAN ON "THE GREAT
PROMISE OF BIOTECHNOLOGY." THE GOAL OF THIS CONFERENCE,
SPONSORED BY THE AMERICAN CHAMBER OF COMMERCE AND CONGEN
MILAN, IS TO PROVIDE A FORUM FOR ITALIAN BUSINESS AND
ACADEMIC REPRESENTATIVES TO ENCOURAGE THE ITALIAN GOVERNMENT
TO TAKE A LESS RESTRICTIVE STANCE TOWARD THE DEVELOPMENT OF
AGRICULTURAL BIOTECHNOLOGY. WE WILL USE THE FORUM TO PROMOTE
THE U.S. POSITION IN THE WTO CASE. IN ADDITION TO THESE
PROGRAMS, WE ARE SENDING U.S. SPEAKERS TO NAPLES, TURIN, AND
TRIESTE OVER THE NEXT THREE TO FOUR WEEKS IN ORDER TO EXPLAIN
AND DEFEND U.S. BIOTECH POLICY.


11. (U) IN THE DAYS AND WEEKS AHEAD WE WILL CONTINUE OUR
PROACTIVE PUBLIC DIPLOMACY OUTREACH TO AUDIENCES THROUGHOUT
ITALY TO INFORM THE PUBLIC ABOUT U.S. ARGUMENTS AND POLICIES
FAVORING BIOTECHNOLOGY AND EXPLAINING THE U.S. POSITION IN
THE WTO CASE. WE WILL MAKE USE OF VARIOUS RESOURCES (SPEAKER
PROGRAMS, DIGITAL VIDEO CONFERENCES, MEDIA PLACEMENT,
INFORMATION DISSEMINATION THROUGH OUR WEBSITE, TARGETED
E-MAIL DISTRIBUTION OF RELEVANT TEXTS, AND INTERNATIONAL AND
VOLUNTARY VISITOR PROGRAMS) TO PROMOTE USG POLICY AMONG KEY
POLICYMAKERS AND OPINION LEADERS; AND WE WILL PLACE OP-EDS
AND INTERVIEWS TO SUPPORT THE U.S. POSITION IN THE WTO CASE.
SEMBLER


2003ROME02150 - Classification: CONFIDENTIAL