US embassy cable - 03ROME4818

C O N F I D E N T I A L  ROME 004818 
 
SIPDIS 
 
 
STATE PASS USTR 
GENEVA FOR USTR 
 
E.O. 12958: DECL: 10/20/2008 
TAGS: ETRD, IT, EUN, WTO 
SUBJECT: ITALIAN VIEWS ON WTO MINISTERIAL IN CANCUN 
 
REF: ROME 4020 
 
Classified By: ECONOMIC MINISTER-COUNSELOR SCOTT KILNER FOR REASONS 1.5 
 (B) AND (D) 
 
Introduction and Summary 
------------------------- 
 
1. (C) Italy views the intransigence of G-20 middle-income 
countries as the reason for the breakdown of the Cancun WTO 
ministerial meeting.  Amedeo Teti, Director General For 
Commercial Agreements, Ministry of Productive Activities 
(Foreign Trade) and Federico Eichberg, senior advisor to 
Foreign Trade Vice Minister Adolfo Urso, denied reports that 
EU inflexibility on the four Singapore issues was responsible 
for the collapse.  Both saw the surprising strength of NGOs 
at Cancun, and their influence on the poorest WTO members, as 
an unwelcome development; and they agreed that political 
polarization within the WTO discouraged meaningful 
negotiations. In an effort to rebuild trust with the 
developing world, especially the poorest countries, Italy was 
reviewing a range of possibilities, including a more thorough 
evaluation of cotton subsidies.  Agriculture Minister Gianni 
Alemanno told Ecmin separately that Italy was pleased Cancun 
did not foreclose the possibility of enhanced WTO protection 
of geographical indications.  End summary. 
 
The G-20 and the UNGA-fication of the WTO 
----------------------------------------- 
 
2. (C) Amedeo Teti and Federico Eichberg (members of the GOI 
delegation at Cancun) told Ecmin and econoffs October 8 that 
moving the WTO trade talks forward after Cancun will depend 
heavily on whether the G-20 maintains its cohesiveness.  Our 
interlocutors believe the disruptive nature of the G-20 at 
Cancun could impede its long-term effectiveness, and the 
divergent positions of its members on the key issue of 
agriculture may prevent the G-20 from advancing meaningful 
proposals.  While characterizing Brazil and India as the 
ringleaders, Eichberg observed that India was somewhat less 
obstructionist at Cancun than it had been at Doha; and he 
thought that China had not played a particularly assertive 
role. 
 
3. (C) The U.S. is concerned that Cancun could foreshadow an 
increasingly politicized WTO, Ecmin noted, with ministerial 
sessions resembling the UN General Assembly more than trade 
negotiations.  Both contacts said the GOI shared our view. 
Teti said endless speeches at Cancun prevented progress and 
limited actual negotiation to five hours, or so. He expressed 
frustration that the G-20's tactic of inflexibility actually 
worked against the interests of many individual G-20 
countries. 
 
4. (C) Ecmin recalled the cautious optimism we had shared 
with the GOI before Cancun (reftel), with resolution of the 
TRIPS/medicine access issue and the U.S.-EU agreement on a 
framework for agricultural talks.  USDEL in Cancun was 
dismayed that some viewed the agricultural framework as a 
diktat forced upon the developing world.  Eichberg agreed 
that the EU and the U.S. were well prepared for Cancun, and 
that the agricultural framework had been developed with 
transparency following requests from other WTO members at the 
Montreal mini-ministerial in August. (Teti wondered cynically 
whether some members at Montreal had encouraged the U.S.-EU 
framework agreement to create a rallying point for those 
opposed to progress at Cancun).  Teti argued strongly that 
the U.S.-EU framework should remain in play; however, he did 
not think the revised draft Cancun Ministerial text dated 
September 13 (the last text on the table at Cancun regarding 
the full Doha Agenda) would be a useful document from which 
to move forward.  Ecmin countered that the U.S. was ready to 
work with the September 13 draft Cancun Ministerial text; we 
had not yet received any word from Washington regarding the 
continued use of the U.S.-EU framework, however. 
 
NGOs' Increasing Influence 
-------------------------- 
 
5. (C) The U.S. thought NGOs had too much influence on many 
developing countries at Cancun, Ecmin stated.  He added that 
 
the WTO should work on building more trade capacity in 
developing countries to help them negotiate more effectively 
and independently.  Italy shares our concerns, said Eichberg, 
who recounted his amazement at some NGOs' sophisticated 
public relations campaigns. He regretted such groups were 
allowed into the same conference center as the talks, since 
this access enabled them to dictate the positions of many of 
the poorest developing countries (including the surprising 
push on cotton subsidies made by several west African 
countries).  Eichberg thought it unfortunate that political 
realities probably would impede any efforts to diminish NGO 
access at future trade talks. 
 
6. (C) Econoff noted that the U.S. often included NGO 
advisors on our trade delegations, and gave advisors a role 
in the talks while ensuring some government influence on 
their activity.  Teti responded that Urso was looking at the 
possibility of pursuing greater integration of some NGOs 
within the ministry. The difficulty lies in distinguishing 
those that could be helpful from the more extremist groups 
seeking to obstruct negotiations  -- and, he said, there is a 
range of groups somewhere between the two extremes. 
 
Singapore Issues 
---------------- 
 
7. (C) Eichberg blamed NGOs for inflaming developing country 
views on the four Singapore Issues (investment, competition, 
transparency in government procurement, and trade 
facilitation).  He thought the EU had not been excessively 
inflexible by insisting at first that all four issues be 
negotiated together, especially when one considered South 
Korea's much tougher position.  Teti thought that faced with 
deadlock on other issues, Chairman Derbez had used 
intransigence over the Singapore Issues as an excuse to close 
the ministerial.   (Teti added, however, that he sympathized 
with Derbez, who he believes may have called the talks off to 
keep a difficult situation from spiraling out of control). 
 
Next Steps -- Cotton Subsidies and More 
--------------------------------------- 
 
8. (C) Trade Vice Minister Urso now wants to develop 
approaches to rebuild trust with the developing world, 
according to Eichberg.  Among the ideas being considered are 
increased efforts to foster trade facilitation, implementing 
the TRIPS/Medicine agreement, and making cotton subsidies a 
priority within the agriculture negotiations.  Italy would 
like the WTO to pay attention in particular to the poorest 
developing countries, which had been less intransigent than 
the G-20 higher income developing countries.  Teti noted that 
the  unexpected escalation of the cotton subsidies issue had 
been difficult for the EU, since there was not enough time 
time for all EU Member States to reflect and reach a unified 
negotiating position.  He suggested the EU might propose to 
cut subsidies on cotton as well as on tobacco. Eichberg 
emphasized that cotton could not be a stand-alone issue, but 
would have to be considered in the context of the 
agricultural talks. Ecmin noted that the U.S. believed its 
proposal on cotton at Cancun had been constructive. 
 
MinAg Still Hoping for Enhanced GI Protection 
--------------------------------------------- 
 
9. (C) Italian Minister of Agriculture Gianni Alemanno 
briefly offered additional GOI views on the Cancun talks in a 
luncheon attended by Ecmin October 8.  Alemanno believes that 
Derbez cut off negotiations prematurely, at a point when 
various parties were posturing but not necessarily opposed to 
further negotiating. He said that the EU, the U.S. and others 
had underestimated the importance of the non-agricultural 
components of the talks. Alemanno and others in the GOI had 
also been concerned that the European Commission was going to 
sacrifice its position on geographical indications in order 
to break a logjam on other issues, based on alleged U.S. 
demands that the GOI later learned were not correct. Alemanno 
was grateful that in the end the door had not been firmly 
shut on enhancing GI protection within the WTO. 
COUNTRYMAN 
 
 
NNNN 
	2003ROME04818 - Classification: CONFIDENTIAL