WTO Environmental Goods and Services Demarche -

UNCLAS MANILA 000395

SIPDIS

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: ETRD WTRO ECON RP
SUBJECT: WTO Environmental Goods and Services Demarche -
Philippines to Consider

Refs: a) State 11974, b) State 12905, c) Manila 139

SENSITIVE BUT UNCLASSIFIED


1. (SBU) Summary: EconCouns delivered ref A demarche to
Undersecretary for Trade Thomas Aquino of the Philippine Department
of Trade and Industry after coordination with colleagues atthe EC
Delegation in Manila. Aquino responded poitively, but said an
interagency consensus is stll needed before the Philippines could
express spport for this initiative. At Aquino's recommendation we
will now seek a meeting with the Department of Environment and then
will return to DTI to again press the issue. End Summary.


2. (U) While coordinating the joint U.S.-EC approach on ref b
demarche on TAFT goods, we realized that coordination on ref a
demarche on environmental goods would also be useful. Assistant
Director Angelo "Butch" Benedictos was reluctant to accept a joint
U.S.-EC demarche, so the EC met with him on February 8 without our
participation. The EC reported to us that Benedictos' thought the
proposal on environmental goods was "too advanced" for the
Philippines, as yet. He said ASEAN countries were still at a stage
where they are defining "environmental goods." Concerned officials
in the Department of Environment and Natural Resources (DENR) were
still trying to come up with an agreed list, he added. An existing
APEC list was under study, as well as one from UNCTAD. He also
referred to the dual-use nature of some of these goods as a
potential difficulty, and claimed that these issues had not been
clarified yet in Geneva. Thus far, Filipinos had not focused on
environmental services at all, he stated. He gave our EC
counterparts the strong impression that the Philippines would not
move on this issue until there was progress in the NAMA and
agriculture negotiations.


3. (SBU) In light of Benedictos' reaction, we decided to take the
demarche to a higher level to press for a more a positive response.
EconCouns met on February 13 with Undersecretary Tom Aquino, who was
accompanied by Benedictos. Delivering both this demarche and the
demarche on the U.S./EC TAFT goods proposal (ref b, reported
septel),EconCouns pointed out that in the recent meeting between
Assistant to the President for Economic Affairs Daniel Price and
Philippine President Arroyo, Arroyo had again expressed her
commitment to moving forward on the Doha Round, to taking positions
on the basis of Philippine interests, and not waiting for the NAMA
and agricultural results before negotiating other issues. EconCouns
noted that President Arroyo had responded positively to Price's
request that the Philippines support this proposal.


4. (U) Aquino responded that this is a complex issue. Which goods
should be on the list may be difficult to decide, given the dual-use
aspect of many of the goods. EconCouns responded that the point of
our demarche is that we would like the Philippines and other
countries to begin to engage on which goods should be included. If
the issue is complex and difficult, that is all the more reason to
begin working on it immediately.


6. (U) Aquino took that point, but noted that the issue requires
interdepartmental coordination in the Philippine government. The
Department of Environment is studying the various lists of goods.
He suggested that EconCouns approach the Department of Environment
directly to push for favorable consideration of the U.S.-EC
proposal.


6. (SBU) Comment: It is clear that those Philippine officials who
master the details of this and other Doha Round negotiations, both
here and in Geneva, are resistant to any call for increasing the
pace in negotiating other issues, at least until NAMA and ag
negotiations move forward. Policy makers in Manila, from President
Arroyo down to Aquino are more inclined toward the U.S. position.
However, it is not clear how forcefully they are pushing that
position when we are not in the room. EconCouns will seek a meeting
at the Department of Environment to discuss this issue, and then get
back to Aquino again. We will also find an opportunity to raise the
issue with Secretary of Trade Peter Favila who was in the room when
President Arroyo expressed general support for the proposal.