US embassy cable - 04ROME3530

UNCLAS ROME 003530 
 
SIPDIS 
 
 
STATE FOR EB/TPP/BTA/EWH 
STATE FOR EB/TRA 
STATE FOR EB/CBA 
STATE FOR EUR/ERA 
STATE FOR EUR/WE 
STATE PASS USTR 
 
E.O. 12958: N/A 
TAGS: EAIR, ECON, EIND, ETRD, IT, EUN, FAA, AVIATION 
SUBJECT: ITALY ON LARGE AIRCRAFT SUBSIDIES TALKS WITH EU 
 
REF: STATE 193990 
 
 1.  On September 13, Economic Minister Counselor presented 
the demarche on large commercial aircraft subsidies to 
Foreign Ministry Director General for Multilateral Economic 
and Financial Cooperation, Giandomenico Magliano, and Office 
Director Diego Ungaro.  EcMin also conveyed the demarche 
separately to Gabrielle Checchia, Diplomatic Advisor to 
Minister of Productive Activities (MPA) Marzano. 
 
2. Magliano said that the MFA and MPA were in the process of 
discussing the U.S. initiative to arrive at an Italian 
government position.  Nevertheless, the DG stated clearly 
that he believed it is "reasonable to update" the 1992 
U.S.-EU agreement on large civil aircraft and noted that 
while subsidies were important in the past, market-based 
forces play a bigger role today. 
 
3. Magliano stated that the U.S. and EU should keep this 
issue from becoming a high profile, controversial 
transatlantic issue.  In this context, he welcomed the 
forward-looking, constructive tone of the demarche.  Magliano 
also promised to share our demarche with the Foreign Ministry 
Office of EU Integration, both in Rome and in Brussels. 
 
4. Ungaro asked if Washington was making a similar demarche 
to Japan, given Japanese government assistance for aerospace 
development.  Economic Minister Counselor indicated that this 
demarche was for EU member states only, but agreed to convey 
Ungaro's point to Washington. 
 
5. Magliano also offered his view that the U.S. and EU had 
taken different tracks to support their respective aerospace 
industries.  The EU chose concessional loans, while the U.S. 
provided grants for research and development (R&D).  He asked 
if support for R&D would be included in the proposed talks. 
 
6.  Comment: Our conversation with the MFA's senior economic 
official left us with the distinct impression that, in 
intra-EU discussions, Italy will be broadly supportive of the 
reopening and updating the 1992 agreement.  End Comment. 
 
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SEMBLER 
 
 
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	2004ROME03530 - Classification: UNCLASSIFIED