US embassy cable - 03ROME5507

UNCLAS  ROME 005507 
 
SIPDIS 
 
 
USDA FOR OSEC HEGWOOD 
USDA FOR OSEC SIMMONS 
STATE PASS USDA/FAS BLUM AND E. JONES 
STATE PASS USTR 
 
E.O. 12958:  N/A 
TAGS: EAGR, ETRD, IT, EUN 
SUBJECT:  COEXISTENCE IN ITALY, AG BIOTECH 
AND WTO:  USDA U/S PENN'S MEETING WITH AG 
MINISTER ALEMANNO 
 
 
1.  Summary:  On the margins of the FAO 
Conference's 32nd Session in Rome, 
USDA's Under Secretary J.B. Penn met with 
Minister of Agriculture Gianni Alemanno to 
discuss biotechnology in Italy, and the way 
forward in the agricultural portion of the 
Doha WTO negotiations.  The discussion with 
Alemanno broke no new ground except for his 
offer to share advance copies of 
his upcoming proposal on co-existence 
in order that the United States can have input 
into the process prior to it being submitted 
to Italy's cabinet for approval.  A separate 
conversation with MinAg's Under Secretary 
Scarpa Bonazza with FAS Administrator Terpstra 
reinforced the divergence of views on biotech 
that exist within Prime Minister Berlusconi's 
governing coalition.  Embassy is following up 
with Alemanno's staff to secure a copy of the 
proposed decree and will forward it to 
Washington as soon as available.  End summary. 
 
2.  On December 2, USDA Under Secretary Penn 
met with Italian Minister of Agriculture 
Alemanno.  Penn was accompanied by FAS 
Administrator Terpstra, DCM Skodon, Minister 
Counselor Hardy-Bass and AgAttache Murphy. 
By way of introduction, Alemanno announced 
that Italian biotech policy would undergo 
"significant change" by the end of December. 
Alemanno indicated that Italy would soon 
repeal the Amato decree (that bans four EU- 
approved corn varieties) and publish a 
decree on co-existence.  Alemanno made clear 
that the two actions would move forward 
together.  According to the Minister, the 
co-existence decree would "allow" for GM 
crops in Italy -- but with extreme 
precaution.  He went on to say that seven 
(of Italy's twenty) regions have 
already taken the position of desiring to 
prohibit biotech cultivation. 
 
3.  U/S Penn noted the overall positive 
relationship between Italy and the 
United States, in trade and pol/mil affairs, 
with one significant exception -- 
biotechnology.  U/S Penn expressed growing 
frustration with Italy and its more and more 
extreme anti-biotech position.  This 
frustration, he explained, extended to the 
Administration as well as to the Congress. 
The Under Secretary reminded Alemanno that 
the United States had a one-billion dollar 
agricultural trade deficit with Italy and 
that there would be consequences should 
Italy continue to inhibit U.S. agricultural 
exports. 
Note:  U/S Penn's statement closely 
coincides with what Ambassador Sembler has 
told Alemanno on several occasions. 
 
4.  Alemanno reiterated his intention to 
publish soon a new decree governing 
co-existence.  He maintained that his seed 
decree governing trade in conventional seeds 
(corn and soybeans) would improve access for 
U.S. seed from that of the last few years. 
Alemanno also took issue with the U.S. 
contention that U.S. seed exporters have 
lost between 40-60 million dollars/annually 
because the Ministry's actions to guarantee 
biotech-free seeds to Italian farmers.  He 
noted that the Ministry's data show that 
three American multinational companies have 
continued to enjoy over 70 percent market 
share.  (Comment:  What the Minister failed 
to account for is the proportion of those 
seeds that are no longer sourced from U.S. 
seed producers as they are perceived as too 
risky under Italy's zero tolerance for 
adventitious presence. End Comment)  The two 
parties agreed to let their technical staff 
resume the debate over the trade figures. 
 
Alemanno concluded by stating the Ministry 
would share a draft version of the co- 
existence decree prior to submitting it to 
the Council of Ministers for approval, in 
order that the U.S. and Italy could have a 
dialogue on the proposals prior to 
publication.  (Comment: We are following up 
on Alemanno's offer to get copies of the 
draft decrees ASAP.  If Italy indeed 
publishes the coexistence decree by the end 
of December, there is very little time for a 
considered evaluation of the proposals and 
dialogue.  End Comment) 
 
5.  U/S Penn thanked Alemanno for the chance 
for consultation, but warned him again of 
the seriousness of the issue and that 
negative consequences could follow if the 
future course of action is in the same 
direction taken in recent years.   He 
added that rules governing the agricultural 
sector and influencing international trade 
without a basis in sound science are against 
the rules of the WTO.  Alemanno also said 
that he has introduced a quantitative 
analysis for GM presence this year instead 
of last year's qualitative analysis, 
bolstering his claim that he is not against 
a science-based approach to biotech.  He 
expressed his often repeated position that 
Italians favor 'high quality food' implying 
that biotechnology is an anathema to 
quality agriculture.  U/S Penn repeated that 
his is a grave concern, and that if Italy 
and the U.S. cannot arrive at a solution, 
that Italy will face negative consequences. 
 
6.  Alemanno brought up a second issue: 
geographical indications (GIs). He 
mentioned this in the context of Italy's 
hopes that progress will ensue in the 
upcoming WTO meetings in Geneva.  Without 
commenting on GI's, U/S. Penn remarked that 
Alemanno's assessment was correct, that the 
EU and the U.S. narrowed their differences 
after the Montreal mini-ministerial. Penn 
mentioned a positive discussion with 
Commissioner Fischler and mutual willingness 
to make progress on Dec. 15. 
 
TERPSTRA MEETING WITH SCARPA BONAZZA 
 
7.  For a different perspective on the 
proposed coexistence law and to discuss 
CAP reform and Doha negotiations, on Dec. 3 
FAS Administrator Terpstra met with Under 
Secretary Paulo Scarpa Bonazza Buora. 
 
SIPDIS 
 
8.  Scarpa agreed with Terpstra the there is 
very little time to make much-needed 
progress in the Doha Development Round. 
Scarpa's point was that due to new Member 
State accession to the EU and October 31 
changes in the Commissioners, the present EU 
leadership has only four or five months left 
to act with its current structure.  U/S 
Scarpa's few comments about CAP reform were 
critical, characterizing Commissioner 
Fischler's actions as only addressing half 
of the equation. According to Scarpa, 
Fischler has addressed cuts to farm support 
but has not given adequate attention to how 
farmers can become competitive in a new 
"unprotected" global agricultural market. 
 
9.  According to U/S Scarpa, agricultural 
biotechnology is one of the tools for 
raising farm productivity and therefore 
increasing competitiveness. If Minister 
Alemanno succeeds in keeping it out of 
Italy, especially while other European 
Member States start using input-saving or 
output-boosting biotech seeds, Italy will 
become increasingly isolated and unable to 
 
offer competitive food exports. 
 
10.  Comment:  Under Secretary Scarpa is a 
member of PM Berlusconi's Forza Italia 
party, whereas Alemanno is an up and coming 
member of the second largest coalition 
partner, Alliance 
Nazionale.  The contrast in Alemanno and 
Scarpa's positions on biotech is striking. 
Scarpa himself owns a corn farm in the 
Veneto region and is favorably disposed 
towards technological advancement, including 
biotechnology, but he acknowledged that he 
is powerless to deliver policy change within 
the Alemanno-controlled Ministry of 
Agriculture.  Rather, Scarpa also fears that 
the Alemanno doctrine on coexistence could 
be another blow against the introduction of 
biotech in Italy.  End Comment. 
 
 
11.   Neither U/S Penn or Administrator 
Terpstra were able to review this cable 
prior to departure.  Sembler 
 
 
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 2003ROME05507 - Classification: UNCLASSIFIED