GOI CHARTS THE WAY FORWARD AFTER WTO MINISTERIAL

C O N F I D E N T I A L SECTION 01 OF 02 ROME 004186

SIPDIS

DEPT PLEASE PASS TO USTR

E.O. 12958: DECL: 12/31/2010
TAGS: ETRD ECON IT EXPORT CONTROLS
SUBJECT: GOI CHARTS THE WAY FORWARD AFTER WTO MINISTERIAL

Classified By: Acting EcMin Kathleen Reddy for reasons 1.4 (b) and (d)


1. (SBU) Summary. Amadeo Teti, Vice Ministry of Trade
Director General for Commercial Agreements, views the WTO
Hong Kong Ministerial as an overall success and especially as
"a win" for Brazil. Teti praised Pascal Lamy's leadership of
the WTO, and predicted an agreement on the Doha Development
Agenda by end-2006, provided there is progress on
non-agricultural market access (NAMA). Teti noted that
geographical indicators (GIs) are still a GOI priority, and
thought the recent bilateral wine agreement might provide a
model for a way forward for Italy and the United States on
GIs. End summary.

On Agriculture, "Everyone was Against the EU."
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2. (SBU) In a meeting December 27 with Acting EcMin and
Econoff, Teti described the WTO Hong Kong Ministerial as "a
win" for Brazil. He characterized Brazil as having seized
G-20 and G-90 leadership by securing for them
WTO-membercommitments to eliminate agricultural export
subsidies by 2013 and to cut "significantly" tariffs on
agricultural goods. Teti predicted that the Doha Round's
outcome will be an agreement on agricultural access along the
lines of the G-20 proposal, with tariff reductions between 50
and 55 percent before total elimination in 2013. The G-20
proposal is "OK" for the GOI, but will be problematic for
France, which has higher domestic subsidies than Italy.

GOI Still Seeking Progress on GIs.
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3. (C) Teti noted the lack of progress on GIs and
complained of a "lack of ambition" on the issue. He said the
GOI wants to have a WTO mechanism through which Italian
producers can protect their geographic indicators in the
United States. Teti largely ignored Econoff's argument that
such a mechanism is unnecessary because U.S. law adequately
protects trademark holders, including the Italian
manufacturers of Parma Ham, who successfully protected their
trademark in U.S. courts. Teti pointed to the U.S.-EU wine
agreement as a possible model for a bilateral agreement
through which the USG and EU could eliminate the GI "hurdle
to progress" in the WTO negotiations. If a bilateral U.S.-EU
agreement is reached on GIs, Teti speculated the GOI could
work within the EU to give Trade Minister Mandelson more
flexibility in other areas of the trade negotiations.

Work Remains on NAMA and Non-Tariff Barriers.
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4. (SBU) Encouraged by the Ministerial's decision to adopt
the "Swiss formula," Teti said that a final NAMA agreement
is possible by end-2006, provided Member States find "good
figures" to insert into the tariff reduction timetable. Teti
noted that much work remains on non-tariff barriers,
especially in the Chinese, South Korean, Japanese, and Indian
markets.

On Services, a Call for U.S.-EU Cooperation.
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5. (SBU) Turning to the services negotiations, Teti called
for closer cooperation, "but short of joint papers," between
the USG and EU to move these negotiations forward. He noted
that services make up 70 percent of the Italian economy, and
that the economic benefit to Italy of increased access to
overseas markets for services would be substantial. He also
noted the United States "pulling back" from an ambitious
services agenda, possibly to appeal to developing countries,
and thought the EU and United States should close the gap in
their positions before engaging developing countries.


Lamy Will Keep Negotiations on Schedule.
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6. (SBU) On the whole, Teti rated the Hong Kong Ministerial
a success, notable for steps forward. He conceded there is
much still to be done to conclude the Doha Round by end-2006,
but thinks it is possible, if WTO Director General Lamy
asserts his leadership. Teti was struck by what Lamy
accomplished at Hong Kong, given that he began preparations
for the Ministerial in September. Teti was convinced that
had Lamy had more time to prepare, even more progress would
have been made.


7. (SBU) Comment. Teti, one of Italy's most senior trade
officials, is well-disposed to the United States, and
consistently tries to find ways in our conversations to close
the gap between the EU and USG positions on the Doha Round.
His suggestion for a bilateral U.S.-EU agreement on GIs
reflects this positive disposition and a frustration with the
status quo on this issue, which he has previously identified
as a "deal breaker" for the GOI. End comment.


8. (SBU) Biographical note. Considered one of Italy's most
experienced trade negotiators, Teti served at the Italian
mission in Geneva prior to becoming Director General for
Commercial Agreements. In October 2005, Teti agreed to serve
an additional three years in his current position. End
biographical note.
SPOGLI