CHARGE MEETING WITH SECRETARY OF STATE FOR TOURISM

UNCLAS SECTION 01 OF 02 MADRID 000453

SIPDIS

DEPT FOR EB/IPC (WILSON),EB/TPP/ABT (MALAC)
DEPT PLEASE PASS USTR (PECK, MOLNAR,)

E.O. 12958: N/A
TAGS: EAGR ETRD TBIO KIPR SP
SUBJECT: CHARGE MEETING WITH SECRETARY OF STATE FOR TOURISM
AND TRADE

REF: (A) STATE 19814 (B) MADRID 00187


1. Summary: Charge reviewed outstanding trade issues with
Spain's number two trade official, Pedro Mejia Gomez, on
2/2/05. Charge pressed for progress on rice talks, airbus
negotiations, biotechnology, intellectual property rights,
and wine. Mejia urged U.S. support for Pascal Lamy's WTO
candidacy and said he was puzzled by the strong U.S.
opposition to EU "automaticity" on the Foreign Sales
Corporation (FSC). End Summary

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PARTICIPANTS
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2. Mejia was accompanied by Secretary General for External
Trade Alfredo Bonet Baiget and a staff person. Charge was
accompanied by EconOff.

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RICE
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3. Spain is the number two rice producer in the EU so it
clearly has a stake on this topic. Reftel A
clarifying the USG position that tariff reductions would come
from bound, not applied, rates had not arrived by the time
Charge met with Mejia. However, it was clear from the
Spaniards that they are interested in the Commission arriving
at an agreement with the U.S. Mejia and Bonet complained
that the U.S. retaliation list was unfairly tilted towards
Mediterranean countries and Spain in particular. They were
concerned about clementines, saffron, and peaches. They were
not so concerned about olives, saying withdrawal of U.S.
concessions would mostly affect Greek producers.

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AIRBUS
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4. Charge argued that the EU had to be willing to engage
substantively on what constitutes an indirect subsidy and
make an attempt to quantify their value for Large Civil
Aircraft (LCA) production. Bonet noted that it was easy to
quantify launch aid, but that it was in any case repaid with
interest. In response to Charge's point that launch aid was
nonetheless never granted by commercial lending institutions,
Bonet conceded that nobody was "without sin". We got very
little sense from Mejia and Bonet whether the GOS was willing
to press the Commission to present genuinely substantive
ideas on indirect aid.

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BIOTECHNOLOGY
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5. Spain's trade policy officials typically do not engage on
agricultural biotechnoloy. However, because Bonet represents
his Ministry on the Inter-Ministerial Council on Transgenic
Products, he was aware that the GOS has abstained four times
on Commission biotechnology liberalization proposals, instead
of voting in favor as the previous Aznar government would
likely have done. Charge said the U.S. had noted the GOS's
change in position. Charge also said that we were following
with concern the GOS's proposals for a new co-existence law.
He urged the GOS to conduct science-based determinations on
approval applications and encouraged Spanish trade officials
to take an interest in Cartagena Protocol on Biosafety
issues. Bonet was clearly aware of at least some of our
concerns but emphasized that the Ministries of Environment
and Agiculture had the lead on these matters.

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INTELLECTUAL PROPERTY RIGHTS
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6. Mejia and Bonet were aware of the Special 301 process and
expressed appreciation for the fact that Spain is not on a
watchlist. They said enforcement was the key here. Charge
agreed but also noted the importance of Spain's transposing
into national law the EU Copyright Directive because this
would effectively make Spain's signature of the World
Intellectual Property Organization's (WIPO) "internet
treaties" legally meaningful in Spain. Both Mejia and Bonet
understood that one of the major purposes of the "internet
treaties" is to make sure that internet service providers
protect intellectual property. Bonet immediately caught on
to the fact that in the Spanish context, this largely means
Telefonica. Mejia and Bonet noted that their Ministry does
not have the lead in transposing the EU Directive (the
Culture Ministry does),but they understood the trade policy
significance of action in this area.

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WINE
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7. The discussion on this topic was not so fruitful as Bonet
immediately went into a discussion on geographical
indications, rather than traditional expressions. Mejia and
Bonet were unaware of the U.S. compromise proposal.

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GOS CONCERNS
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8. Mejia made a strong case for Pascal Lamy. Charge
responded that the USG had not made a decision yet on whom to
support, and that our main concern for now was to continue
the substantive work associated with the Doha Round. Mejia
also said that he could not understand why the U.S. was so
upset over the "automaticity" provision in the EU Foreign
Sales Corporation (FSC) directive. Charge went over once
again points that have been made repeatedly on FSC demarches
(Ref B). However, Mejia and Bonet evinced little
understanding for U.S. congressional sensitivities on this
topic.
MANZANARES