ECONOMY MINISTER LAVADOS DISCUSSES AMERICAS

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TAGS: ECON KIPR EFIN ETRD EINV ECIN PGOV PREL CI

SUBJECT: ECONOMY MINISTER LAVADOS DISCUSSES AMERICAS
COMPETITIVENESS FORUM AND IPR CONCERNS WITH AMBASSADOR


1. (SBU) SUMMARY: In a meeting with Economy Minister Hugo Lavados,
the Ambassador praised Chile's ongoing preparations to host the
Americas Competitiveness Forum (ACF) in late September and discussed
continuing IPR concerns. Minister Lavados indicated he very much
wants Commerce Secretary Locke to participate in the ACF, which he
noted is particularly timely and relevant given the global economic
crisis. Lavados also highlighted Chile's progress in meeting its
IPR commitments, notably the creation of the National Institute of
Industrial Property (INAPI) as the lead agency responsible for
promoting intellectual/industrial property rights protection. END
SUMMARY.

Chile To Host Americas Competitiveness Forum
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2. (SBU) Minister Lavados told the Ambassador on March 24 that he
had sent a letter to Commerce Secretary Gary Locke inviting him to
participate in the Third Annual Americas Competitiveness Forum
(ACF),which Chile will host in Santiago on September 27-29. The
Minister welcomed the opportunity to bring together public and
private sector authorities including political leaders, academics,
and experts from throughout the hemisphere to exchange views on how
to improve competitiveness among our countries. The challenges from
the current global economic crisis make this ACF particularly
relevant and timely, he said. Minister Lavados mentioned that
Wal-Mart, Delta Airlines, and Merck, among others, have already
offered to help with the event. He also appreciated the involvement
of the U.S. Embassy and its Commercial Service in preparations for
the Forum and the coordination to ensure the participation of
Commerce Secretary Locke.


3. (SBU) The Ambassador praised Chile's organization and advanced
preparations for the ACF, and he offered his support in contacting
the AmChams in Chile, Argentina, and Brazil to promote the Forum and
encourage an active participation by important business leaders from
the Southern Cone. The Ambassador expects that the Santiago ACF
will help increase cooperation and the exchange of timely
information among business, political, and economic leaders on the
successful measures to address challenges imposed by the economic
crisis.


4. (SBU) Minister Lavados indicated he plans to allocate time at
the ACF for discussion of different mechanisms and policies in the
hemisphere to protect labor and those in need, including support for
small- and medium-sized enterprises (SMEs). He noted SMEs provide
over 27 percent of employment in Latin America, but they are not
highly competitive and their level of productivity has declined
considerably during the past 12 months.

INAPI: A New Institution to Address IPR Concerns
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5. (SBU) The Ambassador then briefed Minister Lavados on continuing
IPR concerns with Chile, identifying four priority areas:
anti-piracy and counterfeiting, data protection and patent linkage,
copyrights/trademarks, and legislation. The Ambassador welcomed
Chile's progress in several areas, such the creation of INAPI, the
approval of the Patent Cooperation Treaty (PCT),and the
establishment of a specialized police unit (BRIDEPI) to identify IPR
violations and enforce the law. He noted, however, that IPR-related
legislation -- international and FTA commitments -- has been pending
in Congress for some time.

6. (SBU) Minister Lavados committed to closely monitor the IPR
agenda and Chile's IPR commitments, especially in those areas under
his jurisdiction. He added that the creation of INAPI is a serious
response by the GOC to improve the promotion and protection of IPR
in Chile. He encouraged the Embassy to coordinate with INAPI on IPR
issues. Cristobal Acevedo, the new INAPI Director who also attended
the meeting, emphasized the main objective of INAPI is to actively
promote the GOC's national innovation strategy by encouraging
innovation and transfer of knowledge.

7. (SBU) Acevedo said INAPI essentially is a technical/legal entity
responsible for the management of industrial property rights, and
not a law enforcement agency. Acevedo expressed his agency's desire
to help ensure Chile's compliance with all its international IPR
commitments. He added that his agency would provide recommendations
to the executive when necessary to improve Chile's IPR protection.

8. (SBU) The Ambassador welcomed this progress, and noted the
importance of increasing protection in highly sensitive areas such
as data protection and patent linkage, which largely affect the
pharmaceutical industry. The Ambassador also expressed interest in

the copyright/trademark law currently under review by the Congress.
Minister Lavados explained that both of these issues are not his
direct responsibility and are under the purview of the Ministries of
Health, Education, and Culture. Minister Lavados indicated he would
learn more about these issues and raise our concerns with the
appropriate GOC authorities.

International Crisis Hits Economy Harder Than Expected
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9. (SBU) The Ambassador also asked Minister Lavados about his views
of the current economic crisis and its impact on the Chilean
economy. Minister Lavados explained that initially Chile's economic
authorities tried to reassure an increasingly nervous population
that the country's solid macroeconomic footing and conservative
fiscal spending would protect it from the crisis. However, that
position changed during the last quarters of 2008 and the GOC
rapidly changed gears to focus on mitigating the effects of the
crisis, particularly as consumer and business confidence fell and
the economy slowed down. The Minister praised the GOC's
counter-cyclical fiscal policy, which seeks to minimize the economic
slowdown and rising unemployment through its US$4 billion stimulus
package. He indicated that the Ministry of Economy is working
closely with the banking sector to ensure credit remains available
to small- and medium-sized companies.
SIMONS