AMBASSADOR'S MEETING WITH TRADE AND INDUSTRY

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STATE PASS TO USTR FOR BWEISEL AND DKATZ
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E.O. 12958: N/A
TAGS: ETRD EAGR ETTC EINV KIPR RP
SUBJECT: AMBASSADOR'S MEETING WITH TRADE AND INDUSTRY
SECRETARY FAVILA: IPR, BILATERAL TRADE, DOHA ROUND

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SUMMARY
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1. (SBU) In her first meeting with Trade and Industry
Secretary Peter Favila on April 25, the Ambassador focused

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discussion on intellectual property rights (IPR),our
bilateral trade relationship, and the WTO Doha Round
negotiations. Favila and other senior GRP leadership
continue to highlight strategies to further improve IPR
protection and expressed readiness to work with us to
realize concrete results. The Ambassador and Favila agreed
that we share a strong bilateral trade relationship that
could eventually grow even stronger under a Free Trade
Agreement (FTA). Neither government, however, is prepared
to enter into negotiations at this time. Favila reaffirmed
GRP support for the U.S. position in the WTO Doha Round.
The meeting reinforced a positive, cooperative relationship
and set the stage for continued engagement on trade and
investment. End Summary.


2. (SBU) The Ambassador, accompanied by Econ Counselor,
Commercial Counselor, and Econ Officer, met with Trade and
Industry Secretary Peter Favila on April 25. Favila was
accompanied by Director General Adrian Cristobal of the
Intellectual Property Office (IPO),Foreign Trade Service
Officer Michelle Sanchez, Bureau of International Trade
Relations (BITR) Director Butch Benedictos, and BITR
Assistant Arlene Ligad. The Ambassador congratulated Favila
for the GRP's recent progress on improving its intellectual
property rights (IPR) protection regime. Favila had just
recently returned from a GRP "economic roadshow" with
Finance Secretary Gary Teves in London and New York. He
said that the trip went well, and they received a positive
review with particularly encouraging commentary from the
business community in New York.


3. (SBU) Favila said that the GRP appreciates the USG's
recognition of improvements in the country's IPR regime, but
acknowledged that much still needs to be done. Accordingly,
the GRP has outlined strategies to ensure further progress
in the months ahead. Favila said that he had also recently
met with the Chinese Ambassador to raise serious concerns
about the smuggling of counterfeit and pirated goods from
China to the Philippines.


4. (SBU) Cristobal requested assistance in facilitating
meetings with U.S. stakeholders, namely the International
Intellectual Property Alliance (IIPA) and the American
Publishers Association. Cristobal said that interaction
with IIPA and some other stakeholders is limited to
industry's 301 submissions to USTR, which are often
unfavorable to the Philippines. Cristobal underscored that
IPO would welcome opportunities to dialogue with these
stakeholders. Cristobal also requested that the USG and
U.S. industry work with the IPO to facilitate copyright
licensing programs for universities in order to make
educational texts affordable. Cristobal noted the
importance of USG support for IPO's current approach that
strikes a balance between IPR education and enforcement,
rather than enforcement alone. He added that enforcement is
improving, citing 28 IPR convictions in the first quarter of

2006. Cristobal also expressed appreciation for the many
training opportunities provided to the Philippines by the
U.S. Patent and Trademark Office.


5. (SBU) In response to U.S. auto industry concerns about a
new tariff regime for vehicle imports, which is part of the
Japan Philippines Economic Partnership Agreement (JPEPA)
negotiations, Favila said that the GRP has consulted
extensively with Ford Philippines and is addressing Ford's
concerns. The Ambassador, on behalf of Ford, conveyed
appreciation for GRP efforts and explained that Ford wants
to ensure that it has ample time to adapt to lower tariffs
under JPEPA for Japanese SUVs.


6. (SBU) Secretary Favila and the Ambassador agreed that

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neither government is ready to begin negotiations on a U.S.
- Philippines Free Trade Agreement (FTA). She noted that
our bilateral trade relationship is strong and dynamic, and
our Trade and Investment Framework Agreement (TIFA) serves
as an effective mechanism to address bilateral trade issues.
An FTA may be possible in the years ahead, but the GRP needs
to focus in the near term on making progress on key trade
and investment issues such as corruption, intellectual
property rights, and customs procedures. The Ambassador
urged Favila to review closely U.S. FTAs with other
countries and the ongoing U.S. FTA negotiations with
Thailand and Malaysia in order to begin identifying and
addressing issues now. She explained that such preparation
would better position the Philippines for a potentially
smooth and accelerated future FTA with the U.S. The
Ambassador highlighted the complexities of negotiating FTAs
since our agreements cover trade, labor, environmental and
other key standards.


7. (SBU) The Ambassador thanked Favila and the GRP for its
support in the WTO Doha Round negotiations. Favila said
that the GRP would continue to support the U.S. on
agriculture and other areas.

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COMMENT
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8. (SBU) Favila is sympathetic to business concerns and
supportive of economic reforms. The Ambassador's meeting
reinforced a positive, cooperative relationship and set the
stage for continued engagement on trade and investment
issues. Since the decision to move the Philippines from the
Special 301 Priority Watch list to the Watch List, Favila
has taken an enthusiastic interest in IPR issues, which will
help maintain high-level attention to key initiatives. The
Embassy is planning a series of roundtable discussions
beginning in May between U.S. industry and the GRP in order
to foster collaboration and further progress on IPR
protection, education, and enforcement.

KENNEY