AUTSR DONNELLY ENGAGES GOI ON DOHA, IPR/ACTA, AND

UNCLAS SECTION 01 OF 02 ROME 002214

SIPDIS

SIPDIS

DEPARTMENT FOR USTR - SHAUN DONNELLY

E.O. 12958: N/A
TAGS: ECON ETRD KIPR PREL IT
SUBJECT: AUTSR DONNELLY ENGAGES GOI ON DOHA, IPR/ACTA, AND
IMPORT SAFETY ISSUES

REF: STATE 114788


1. (U) Summary. In a September 26 meeting, GOI trade
official Leonardo Schiavo told Assistant USTR Shaun Donnelly
the GOI is committed to the success of the Doha Round, at the
same time making clear that geographic indications are a key
issue for the GOI. Schiavo characterized Italy as "one of
the main victims of IPR crime," and criticized Italy's
inclusion on the Special 301 Watch List. In a separate
meeting with GOI IPR officials, Donnelly pressed them to
establish a GOI "Action Plan" on IPR enforcement and to take
steps to strengthen GOI IPR enforcement efforts. Schiavo
expressed reservations about the shipping container
inspection legislation recently passed by Congress, but
expressed willingness to work with USG officials to establish
mechanisms for the inspection of containers being shipped
from Italian ports to the U.S. End summary.

WTO and the Doha Round
--------------


2. (U) Schiavo, Chief of Staff to Italian Trade Minister
Emma Bonino, opened the meeting by noting the GOI is
concerned the Doha Round of trade talks is not proceeding "at
an adequate speed for a breakthrough" and that the "overall
context is not encouraging." Donnelly and Schiavo agreed
that whatever agreement comes out of the Doha Round will not
completely satisfy all of the parties, and that it is
essential to keep pressure on the newly industrialized
countries to make concessions on services and NAMA access.
Schiavo identified geographic indications (GIs) as the "key
issue" for the GOI in the WTO negotiations, and argued that
GI protections are necessary for Italy to protect its
position as a "quality product exporter."


3. (U) Schiavo expressed concern about "how an agreement
that is fair to emerging economies will be received by
Congress," and how Congress will react to possible cuts in
farm subsidies. Donnelly noted USTR Schwab believes a good
Doha package can get a Congressional majority, and that
Schiavo's concerns highlight the need to maintain a high
level of ambition for the ongoing round of negotiations.
Ambitious negotiations that result in a "solid package" with
meaningful market access will facilitate renewal of the
President's Trade Promotion Authority (TPA) and Congressional
approval of a Doha Trade agreement. Donnelly concluded that
in order for the Doha Round to be successful, India and
Brazil need to provide meaningful market access, especially
to exports from developing economies.

IPR, Special 301, and ACTA
--------------


4. (U) Schiavo commented that Italian companies are among
the leading victims of IPR crimes and outlined steps taken by
the GOI to crack down on IPR violators, including setting up
14 "Anti-counterfeiting Desks" in Italian embassies. He
lambasted the Special 301 process as "patronizing," and said
the GOI "should not be criticized because some Moroccan sells
fake CDs on the street." Schiavo argued that USG IPR
protection efforts should focus on China and Russia, which he
alleged are the source of the majority of counterfeit goods
sold in Italy. Donnelly replied that in order for Italy to
be removed from the Special 301 Watch List, the GOI needs to
"establish a record of actual arrests and convictions," and
that without concrete actions on the ground, removal from the
list is not likely. Donnelly also urged Schiavo to broaden
the focus of GOI IPR enforcement efforts to include
protection of software, music, and film copyrights, and noted
that the future of the Italian economy is in intellectual
property-based products, not trademarked luxury goods.
(Note: The GOI tends to view IPR protection as a trademark
issue. End note.)


5. (U) Schiavo next shifted his focus to the proposed
Anti-Counterfieting Treaty Agreement (ACTA). He told
Donnelly that within the EU, competency over ACTA issues is
mixed. While the EU is responsible for ACTA-related trade
issues, member states are responsible for the enforcement of
the relevant laws and regulations. Schiavo, who is on detail
from the EU to the Italian government, expressed confidence
that this mix of competencies would not pose a problem in
implementing ACTA.


6. (U) Donnelly also raised ACTA in his later meetings with
Mauro Masi, the GOI delegate to the World Intellectual
Property Organization (WIPO),and Giovanni Kessler, the GOI
Anti-Counterfeiting High Commissioner, pointing out the need
to improve Italy's track record on IPR enforcement and to

ROME 00002214 002 OF 002


expand GOI enforcement efforts. Donnelly suggested Italy
prepare an "Action Plan" detailing GOI plans to strengthen
IPR enforcement. In contrast to Schiavo, both Masi and
Kessler acknowledged Italy's IPR protection problem and
welcomed Donnelly's input on how to address it effectively.
Masi was less sanguine than Schiavo regarding ACTA, and noted
a significant gap between the EU Commission views and those
of several members states (including Italy) on how ACTA
competencies should be allocated. While reiterating Italy's
support for ACTA, and predicting approval of the treaty, Masi
frankly stated that "there is a problem" between the
Commission and some member states, "that will take time to
work out."


7. (U) Masi described the upcoming IPR conference chaired by
Ambassador Spogli, Deputy Prime Minister D'Alema, and Justice
Minister Mastella. Donnelly suggested the conference could
provide an opportunity to launch an Italian IPR Action Plan.
He also highlighted the importance of maintaining accurate
data on IPR enforcement activities, including arrests,
convictions, and seizures, as part of Italian efforts to get
off the Special 301 Watch List. (Note: Masi is a senior
civil servant in the GOI, and has significant experience with
IPR issues in Italy. In addition to his position as Italian
IPR Delegate, he is Deputy Prime Minister D'Alema's Chief of
Cabinet. Kessler, a former parliamentarian, also is charged
with coordinating Italy's IPR protection activities. End
Note.)

Import Safety Dialogue
--------------


8. (U) Schiavo said that Trade Minister Emma Bonino had
wanted to meet with Donnelly but that she was in Strasbourg
to attend a meeting on product origins. The recent recall of
products exported to America and Europe from China has made
import safety an emotional issue, especially because
children's toys were among the products recalled. In
Schiavo's opinion, the way the issue was portrayed in the
press was "unfair to China," because the products were
approved by American importers (Schiavo singled out Mattel)
and Chinese manufacturers were simply using cheaper materials
in response to downward price pressure. Schiavo said he
thought the EU reaction to the discovery of lead paint on
Chinese-origin toys, for example, has been good, and that the
EU has taken "correct measures" to inform consumers and
ensure the affected products were withdrawn from the market.
Schiavo said that within the GOI, the Trade Ministry takes
the lead on import safety issues.

Container Inspection
--------------


9. (U) Schiavo then turned to the issue of inspecting
incoming goods. He noted the impossibility of inspecting
every container coming into Italy, much less the United
States, and criticized legislation recently passed by
Congress which mandates universal inspections by 2012.
Schiavo characterized the legislation as "extraterritorial
and contrary to international law" because of the detrimental
effect it will have on ports in countries that do not act
aggressively to implement inspection regimes, and expressed
interest in working with the USG to implement some form of
container screening at major Italian ports. "My fear is that
the politicians won't focus on this until 2010, and by then
it will be too late," he concluded.

Comment
--------------


10. (U) While Schiavo was very clear and forceful in his
criticisms, he also left the door open to cooperation with
the USG on a number of issues, including WTO negotiations,
import safety, and improving Italy's IPR enforcement record.
Masi and Kessler were rather receptive to Donnelly's input on
how to improve Italy's standing on the 301 Watch List, and
have expressed willingness to work with the USG on IPR issues
in the past. The upcoming IPR event with Ambassador Spogli
and Ministers D'Alema and Mastella should provide a good
opportunity for the Ministers to outline GOI plans to address
Italy's chronic IPR problems. End comment.
SPOGLI