U.S.-EU WINE NEGOTIATION:SPANISH CONCERNS

UNCLAS MADRID 002618 SIPDIS STATE FOR EB/TPP/ABT STATE PASS TO USTR FOR MURPHY, BOMER DEPT OF AGRICULTURE/FAS/ITP FOR SHEIKH, DYOUNG, POMEROY DEPT OF AGRICULTURE/FAS/OA FOR TERPSTRA, DEPT OF AGRICULTURE/FAS/FAA FOR BLEGGI BRUSSELS PASS USEU FOR AG MINCOUNS EU POSTS PASS TO AGRICULTURE E.O. 12958: N/A TAGS: EAGR ECON ETRD EU SP SUBJECT: U.S.-EU WINE NEGOTIATION:SPANISH CONCERNS REF: (A) BERLIN 2313 (B) STATE 127679 (C) 6/16/05 SCHONANDER-WILSON E-MAIL ¶1. EconOff met with Ministry of Industry, Tourism and Trade Subdirector General for Agricultural Trade, Agustin Velilla Sanz, on 7/12/05 to discuss ref (B). Velilla was reticent to spell out the Spanish position; he prefaced his remarks by saying there would be a common EU position, and that it was not "fair play" for the U.S. to seek out individual country positions. Having said that, he posited that there probably would be an agreement, especially because the EU exports so much more wine to the U.S. than the U.S. exports to the EU. He reiterated (ref C) the Spanish view that the Title III Article 6 1. U.S. commitment to "seek to change the legal staus of the terms in Annex II" is too weak. Spanish industry remains particularly concerned about the treatment of sherry and malaga. Velilla noted that when Spain entered the EU in 1986, Spanish producers of sparkling wines were forced to drop the use of the semi-generic name of "champagne". Sparkling wine producers call their product "cava" now, and they are very successful. Velilla implied U.S. producers should not be afraid of similar changes. Velilla then went on to explain the EU position as being heavily influenced, not so much by commercial considerations, as by the EU's philosophical emphasis on geographical indications. ¶2. AgCouns met with Ministry of Agriculture Director General Angel Luis Alvarez on 7/11/05 to discuss the wine agreement. According to Alvarez, Spain is still considering its position going into the 7/15/05 133 Committee meeting in Brussels. He told AgCouns that Spain would likely support the agreement as currently drafted, although he would not provide a commitment that Spain would do so. AGUIRRE