US embassy cable - 05MADRID453

UNCLAS SECTION 01 OF 02 MADRID 000453 
 
SIPDIS 
 
DEPT FOR EB/IPC (WILSON), EB/TPP/ABT (MALAC) 
DEPT PLEASE PASS USTR (PECK, MOLNAR,) 
 
E.O. 12958: N/A 
TAGS: EAGR, ETRD, TBIO, KIPR, SP, Trade Issues 
SUBJECT: CHARGE MEETING WITH SECRETARY OF STATE FOR TOURISM 
AND TRADE 
 
REF: (A) STATE 19814 (B) MADRID 00187 
 
1. Summary: Charge reviewed outstanding trade issues with 
Spain's number two trade official, Pedro Mejia Gomez, on 
2/2/05.  Charge pressed for progress on rice talks, airbus 
negotiations, biotechnology, intellectual property rights, 
and wine.  Mejia urged U.S. support for Pascal Lamy's WTO 
candidacy and said he was puzzled by the strong U.S. 
opposition to EU "automaticity" on the Foreign Sales 
Corporation (FSC).  End Summary 
 
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PARTICIPANTS 
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2. Mejia was accompanied by Secretary General for External 
Trade Alfredo Bonet Baiget and a staff person.  Charge was 
accompanied by EconOff. 
 
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RICE 
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3. Spain is the number two rice producer in the EU so it 
clearly has a stake on this topic.          Reftel A 
clarifying the USG position that tariff reductions would come 
from bound, not applied, rates had not arrived by the time 
Charge met with Mejia.  However, it was clear from the 
Spaniards that they are interested in the Commission arriving 
at an agreement with the U.S.  Mejia and Bonet complained 
that the U.S. retaliation list was unfairly tilted towards 
Mediterranean countries and Spain in particular.  They were 
concerned about clementines, saffron, and peaches.  They were 
not so concerned about olives, saying withdrawal of U.S. 
concessions would mostly affect Greek producers. 
 
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AIRBUS 
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4. Charge argued that the EU had to be willing to engage 
substantively on what constitutes an indirect subsidy and 
make an attempt to quantify their value for Large Civil 
Aircraft (LCA) production.  Bonet noted that it was easy to 
quantify launch aid, but that it was in any case repaid with 
interest.  In response to Charge's point that launch aid was 
nonetheless never granted by commercial lending institutions, 
Bonet conceded that nobody was "without sin".  We got very 
little sense from Mejia and Bonet whether the GOS was willing 
to press the Commission to present genuinely substantive 
ideas on indirect aid. 
 
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BIOTECHNOLOGY 
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5. Spain's trade policy officials typically do not engage on 
agricultural biotechnoloy.  However, because Bonet represents 
his Ministry on the Inter-Ministerial Council on Transgenic 
Products, he was aware that the GOS has abstained four times 
on Commission biotechnology liberalization proposals, instead 
of voting in favor as the previous Aznar government would 
likely have done.  Charge said the U.S. had noted the GOS's 
change in position.  Charge also said that we were following 
with concern the GOS's proposals for a new co-existence law. 
He urged the GOS to conduct science-based determinations on 
approval applications and encouraged Spanish trade officials 
to take an interest in Cartagena Protocol on Biosafety 
issues.  Bonet was clearly aware of at least some of our 
concerns but emphasized that the Ministries of Environment 
and Agiculture had the lead on these matters. 
 
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INTELLECTUAL PROPERTY RIGHTS 
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6. Mejia and Bonet were aware of the Special 301 process and 
expressed appreciation for the fact that Spain is not on a 
watchlist.  They said enforcement was the key here.  Charge 
agreed but also noted the importance of Spain's transposing 
into national law the EU Copyright Directive because this 
would effectively make Spain's signature of the World 
Intellectual Property Organization's (WIPO) "internet 
treaties" legally meaningful in Spain.  Both Mejia and Bonet 
understood that one of the major purposes of the "internet 
treaties" is to make sure that internet service providers 
protect intellectual property.  Bonet immediately caught on 
to the fact that in the Spanish context, this largely means 
Telefonica.  Mejia and Bonet noted that their Ministry does 
not have the lead in transposing the EU Directive (the 
Culture Ministry does), but they understood the trade policy 
significance of action in this area. 
 
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WINE 
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7. The discussion on this topic was not so fruitful as Bonet 
immediately went into a discussion on geographical 
indications, rather than traditional expressions.  Mejia and 
Bonet were unaware of the U.S. compromise proposal. 
 
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GOS CONCERNS 
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8. Mejia made a strong case for Pascal Lamy.  Charge 
responded that the USG had not made a decision yet on whom to 
support, and that our main concern for now was to continue 
the substantive work associated with the Doha Round.  Mejia 
also said that he could not understand why the U.S. was so 
upset over the "automaticity" provision in the EU Foreign 
Sales Corporation (FSC) directive.  Charge went over once 
again points that have been made repeatedly on FSC demarches 
(Ref B).  However, Mejia and Bonet evinced little 
understanding for U.S. congressional sensitivities on this 
topic. 
MANZANARES