US embassy cable - 04BRASILIA1640

UNCLAS SECTION 01 OF 02 BRASILIA 001640 
 
SIPDIS 
 
STATE FOR WHA/BSC, EB/TPP/MTA/IPC SWILSON 
STATE PASS TO USTR FOR SCRONIN, LYANG AND BPECK 
USDOC FOR 4322/ITA/MAC/WH/OLAC/WBASTIAN/JANDERSEN 
USDOC FOR 4322/ITA/MAC/WH/OLAC/DMCDOUGALL/ADRISCOLL 
USDOC FOR 3134/USFCS/OIO/EOLSON/DDEVITO 
TREASURY FOR OASIA/SEGAL 
NCS FOR DEMPSEY 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: KIPR, ETRD, PGOV, ECON, BR, IPR & Biotech 
SUBJECT: 2004 GSP REVIEW DEMARCHE RESPONSE 
 
Ref: State 142089 
 
This cable is Sensitive but Unclassified, please protect 
accordingly. 
 
1. (U) Taking advantage of a previously scheduled courtesy 
call, Econoff delivered reftel demarche June 29 to the new head 
of the Ministry of External Relations' (MRE) Intellectual 
Property Division, Otavio Brandelli.  Brandelli had no 
immediate reaction to news of the 90-day extension or formation 
of a working group via the Bilateral Consultative Mechanism, 
but told Econoff that a cable to be sent to the Embassy in 
Washington was currently awaiting Minister Amorim's approval. 
He asked what specific language would be published on June 30 
in regard to the GSP review, warning of potentially negative 
reactions.  In a follow-up phone conversation after the 
Minister's approval of the cable, Brandelli explained that the 
GoB accepted the proposal for bilateral meetings on the issue, 
but not necessarily through the existing Bilateral Consultative 
Mechanism.  Noting the importance of flexibility, he implied 
that less formal, or less cumbersome channels of communication 
exist. 
 
2. (SBU) Offering his personal reaction, Brandelli expressed 
dismay that private sector dissatisfaction with Brazil's IPR 
enforcement could result in retaliatory trade sanctions. 
Econoff replied that the objective of the demarche was exactly 
to avoid such a situation via a mutually agreed upon plan to be 
determined within the 90-day extension of the investigation. 
Brandelli cautioned that there could be very negative responses 
from the Brazilian Congress, especially as Congress's 
Investigatory Commission (the CPI) had just released its final 
report.  A negative GSP announcement, he said, could be 
perceived as a slap in the face by those who worked 
cooperatively with the USG and associations of U.S. right 
holders to document the significant problem of piracy and 
enforcement in Brazil.  Brandelli encouraged efforts to de- 
politicize the subject. 
 
3.  (SBU) He agreed that the Piracy CPI report is a positive 
development, especially given its clarification of the damages 
sustained by Brazilian music, software, fashion and other 
industries.  Mentioning Brazil's concerns with geographical 
indicators such as cachaca (Brazilian sugar-cane based spirit 
supposed being made and marketed in Europe) and capuacu 
(Amazonian fruit trademarked in Japan and the U.S.), Brandelli 
noted that both Brazil and the U.S. want more effective 
enforcement, but need to proceed toward that end in a sensible 
manner, taking into account the question of resources. 
 
4.  (SBU)  Econoff asked about the future of the 
Interministerial Committee for Fighting Piracy (CICP), given 
the CPI's recommendation that the committee be replaced. 
Brandelli noted that the committee continues to function, and 
told econoff that Ambassador Clodoaldo Hugueney, MRE Secretary 
General for Integration, Economics and Foreign Trade, had met 
with the Vice Minister of Justice in May 2004 to initiate 
discussion on possible changes to the CICP, exploring options 
like moving it from the Justice Minister to the National 
Security Agency.  Brandelli's personal recommendation is that 
the Finance Ministry oversee the CICP. 
 
5.  (SBU)  Explaining his involvement in the development of the 
Brazilian IPR legislation of 1996, Brandelli expressed 
disappointment that bilateral problems remain, even after 
Brazil made the exceptional effort to produce first class 
legislation.  Whatever plans are made via a bilateral process, 
he said, the GoB would not pass new laws or sign on to new 
treaties, insisting that current legislation goes far beyond 
TRIPS requirements and is more than sufficient. He asserted 
that the July 2003 law (10.695/2003) toughening certain 
copyright penalties and improving procedures on destruction of 
seized goods is quite far-reaching, although he allowed that 
more time is needed to fairly judge its application and 
results.  He lamented that there seemed to be little 
appreciation of the significance of this legislation, implying 
that Brazil does not get its due credit when it comes to the 
fight against piracy.  (Note:  The CPI has recommended draft 
legislation that goes beyond the 2003 law on minimum penalties 
as well as procedures for making indictments and 
storage/analysis of seized goods.) 
 
DUDDY