DESPITE NEW GOVERNMENT, ITALY'S POSITION ON TRADE

UNCLAS SECTION 01 OF 02 ROME 003108 SIPDIS SIPDIS DEPARTMENT PLEASE PASS TO USTR FAS PLEASE PASS TO OCRA FOR ROBERT CURTIS E.O. 12958: N/A TAGS: ETRD ECON WTO IT SUBJECT: DESPITE NEW GOVERNMENT, ITALY'S POSITION ON TRADE REMAINS UNCHANGED REF: A. ROME 2877 ¶B. 05 ROME 4186 ¶C. 05 ROME 3609 ¶1. (U) This cable is sensitive but unclassified. Not for internet distribution. ¶2. (SBU) Summary. During EcMin courtesy calls, GOI officials reiterated earlier calls for "parallelism" in WTO negotiations (ref C) and highlighted the importance of geographical indications to the GOI. They said that for the EU to make a new offer on agricultural market access, developing countries must table new offers on nonagricultural market access (NAMA) and services access and called for U.S. movement on agricultural supports. The officials admitted that Italy's geographical indications proposal does not have broad EU support, but indicated the issue remains a high GOI priority. End summary. ¶3. (SBU) During a November 7 courtesy call by EcMin and AgMin, Amadeo Teti, Ministry of Foreign Trade Director General for Commercial Agreements, said the GOI wants the current WTO Round to succeed, but added that new offers on NAMA and services market access from the developing countries and lower U.S. agricultural supports are necessary before the Round can move forward. With new services and NAMA offers on the table, Teti speculated that it might be possible for Italy, Spain, and Germany to form a coalition within the EU to put forward a more ambitious agricultural market access proposal, and sideline France, Ireland, and Poland. Teti said he discussed this idea with EU Trade Commissioner Mandelson, who agreed new NAMA and services proposals might make it possible for the EU to move forward on agricultural market access without French support. ¶4. (SBU) Teti echoed comments by Foreign Trade Minister Emma Bonino (ref A) indicating that agricultural interests no longer dominate GOI trade policy formulation. "Agricultural subsidies are a black hole," according to Teti, and divert scarce government finances from research, development, and education programs needed to ensure the future health of the Italian economy. Teti summed up Bonino's thinking by noting that "If she could, Bonino wouldn't spend another euro on agricultural subsidies." ¶5. (SBU) In contrast to his downplaying the importance of agriculture, Teti noted that protection for geographic ;indications (GIs) remains a GOI priority, and expressed interest in discussing GOI thinking on GIs with USTR. In response to AgMin's comment that Italian businesses and associations have successfully defended their trade names using the U.S. patent and trademark system, Teti noted GOI concerns for small producers of artisanal food products, which do not have the resources to defend their product names in the U.S. courts. AgMin pointed out there is little need for international protection of the GIs used by many of these small artisanal products because they are not sold throughout Italy, much less in the United States. ¶6. (SBU) In a subsequent conversation with EcMin, Trade Minister Bonino's Chief of Staff, Leonardo Schiavo, explained that GOI concerns over geographical indications extend beyond agricultural products (Parma Ham, Parmigiano Reggiano Cheese, etc.). According to Schiavo, the GOI wants to strengthen protection of the "Made in Italy" label, including GIs for agricultural products, but also shoes, handbags, and other "Made in Italy" items. Schiavo admitted there is little EU support for Italy's proposals, but said protection for GIs and "Made in Italy" will remain a priority for the GOI due to the volume and value of goods involved. ¶7. (SBU) Comment. The most striking aspect of our conversations with Teti and Schiavo is how little GOI trade policy has changed in the year following the WTO's Hong Kong Ministerial and the eight months following the election of the center-left coalition. Teti, usually forthcoming, did not stray from his talking points. This rigidity resulted in a frustrating kabuki-like discussion of the need for a new developing country offer on NAMA and services market access and a new U.S. offer on agricultural supports. ¶8. (SBU) It is unclear to us what role Italy, never a heavy hitter in EU trade circles, can play in breaking the current stalemate in Doha Round. Teti's only new idea, of using a Italy-Germany-Spain alliance to change the EU agricultural position without French support, is probably unrealistic, especially as it is based on the premise of a new developing country offer on NAMA and services market access. While we ROME 00003108 002 OF 002 will continue to engage Schiavo, Teti, and their staffs on trade issues whenever possible, it is increasingly clear that the dearth of new ideas will mean that Italy may not play a significant role ensuring Doha Round success. End comment. ¶9. (U) Late note. We learned November 15 that Minister Bonino will travel to New York and Washington January 15 - 17. Embassy is seeking information on her USG appointments. End note. SPOGLI