US embassy cable - 05MADRID754

UNCLAS SECTION 01 OF 02 MADRID 000754 
 
SIPDIS 
 
STATE FOR EB/IPC SWILSON/JURBAN 
DEPT PLEASE PASS TO USTR, BPECK, DOC ESCWHARZ, USPTO 
DLASHLEY-JOHNSON 
COMMERCE FOR 4000/ITA/MAC/AS 
COMMERCE FOR 4200/ITA/MAC/EUR 
COMMERCE FOR 6000/ITA/USFCS/AC 
COMMERCE FOR 6950/ITA/MS/AERO 
 
E.O. 12958: N/A 
TAGS: ETRD, KIPR, BEXP, OVIP, SP, Trade Issues 
SUBJECT: COMMERCE ASSISTANT SECRETARY WILLIAM LASH FEBRUARY 
17 VISIT TO MADRID 
 
REF: MADRID 0696 
 
1.  SUMMARY - Commerce Assistant Secretary William Lash and 
DAS for Europe Eric Stewart conducted a full day of business 
meetings in Madrid on February 17.  The key meetings for 
Boeing advocacy were sessions with Ministry of Industry, 
Tourism and Trade Secretary General for Foreign Trade Alfredo 
Bonet; Boeing CEO Harry Stonecipher with resident Boeing rep; 
and U.S. Charge d'Affaires Bob Manzanares.  Lash and Stewart 
also held four IPR-related meetings.  The GOS accepted in 
principle Lash's proposal to hold a U.S.-Spain IPR seminar. 
 
BOEING-RELATED ADVOCACY 
----------------------- 
 
2.  In their session with Foreign Trade Secretary Bonet, A/S 
Lash raised the Iberia  Airlines fleet procurement issue 
after a broad discussion of trade and IPR matters of mutual 
interest.  He gave the senior GOS official a letter from 
Secretary Gutierrez for delivery to Industry Secretary Jose 
 
SIPDIS 
Montilla.  Monet responded that he had just come  from a 
meeting with the Minister and Secretary of State for Trade 
Pedro Mejia.  The Gutierrez-Montilla call was discussed.  The 
Ministry also sees the initial communication  between the two 
as very positive.  Bonet assured the senior USG visitor that 
the Iberia procurement decision would be made on the basis of 
commercial and technical merits of the two proposals. 
 
3.  The Madrid meeting with the Boeing CEO took place after 
the Bonet meeting and after the Boeing officials had met with 
Minister Montilla.  The company officials were disappointed 
with their meeting with the Industry Minister.  Montilla had 
reportedly asked Boeing what its plans were for industrial 
cooperation.  Without specifically saying that commercial 
offsets would be required, Montilla wanted to hear what 
Boeing would offer if selected.  CEO Stonecipher's 
description of their Madrid R&D Center investment and the 
announcement earlier in the day that Spanish firm Gamesa 
would be a supplier of engineering in the new B787 project 
did not appear to satisfy the Minister.  Boeing  intends to 
seek clarification from Iberia on how industrial cooperation 
fits into this competition.  U.S. company reps felt, however, 
further industrial cooperation discussions could delay the 
Iberia board selection decision for some additional weeks. 
 
IPR-RELATED MEETINGS 
-------------------- 
 
4.  INDUSTRY MEETINGS:  Lash, Stewart, Charge, EconCouns and 
EconOff met with representatives from the Business Software 
Alliance (BSA), the local music industry association 
(PROMUSICAE), the Federation for the Protection of 
Audiovisual Intellectual Property, the local movie industry 
association, and FEDICINE.  The representatives described 
Spain's IPR problems (see reftel for more detailed 
description of the issues).  Industry representatives lauded 
the government's anti-piracy initiative, and they were 
working with the government to improve it.  Nonetheless, they 
were skeptical whether it would have results in the fight 
against piracy.  They said it was not clear who was actually 
in charge of the initiative and advocated the appointment of 
a single coordinator.  Several representatives advocated 
including Spanish on the 301 watchlist.  A/S asked whether 
the idea of holding a U.S.-Spain IPR roundtable would 
contribute to improving the IPR climate, and the participants 
agreed that it would. 
 
5.  MINISTRY OF INDUSTRY SECRETARY GENERAL ALFREDO BONET 
MEETING:  Bonet noted that Spain  was "lucky" to be off the 
301 watchlist.  He said Spain had extensive IPR problems 
itself and noted that a Spanish elevator manufacturer had 
found counterfeit elevators from China.  Bonet noted that 
Spanish trade officers in Beijing and Shanghai  had been 
instructed to work on IPR-related issues.  Lash suggested 
that it might be useful to conduct joint IPR-related 
approaches to China and Bonet was receptive.  Bonet noted 
that his Ministry participates in the Culture Ministry's 
anti-piracy initiative, although it was not in the lead.  He 
said his Ministry would be willing to  participate in a 
U.S.-Spain IPR roundtable, although again, under the Culture 
Ministry's lead.  Bonet will be traveling to Washington this 
year.  Mission will work with him to ensure he gets the 
appropriate meeting in Washington. 
 
6.  MINISTRY OF CULTURE UNDER SECRETARY ANTONIO HIDALGO 
MEETING:  The Under Secretary and his staff described the 
government's anti-piracy  initiative, which is still being 
developed in consultation with stakeholders.  The Under 
Secretary noted that it involved 11 ministries, and that the 
 
SIPDIS 
only reason all the ministries  had agreed to participate was 
because President (Prime Minister) Zapatero was personally 
interested in the subject.  Regulatory and legislative 
problems were discussed reftel).  The Ministry is committed 
to finding a way for content companies to be able to provide 
Internet Service Providers (ISPs) with "effective knowledge" 
(the standard required by Spanish law to compel an ISP to act 
against subscribers trafficking in pirated material) via an 
administrative route.  This is essential to curbing internet 
piracy in Spain.  Hidalgo was receptive to Lash's suggestion 
to conduct and IPR roundtable, albeit one confined to 
"technical issues."  (Note:  EconOff will confer with Culture 
Ministry staff the week of  March 1 Re:  timing and content 
of a Roundtable.) 
 
 
7.  MEETING WITH THE COMMISSIONER OF THE JUDICIAL POLICE JUAN 
ANTONIO GONZALEZ GARCIA:  Lash and Stewart received an 
enthusiastic reception from Gonzalez and several of his staff 
members.  There is clearly a lot counterfeit and copied 
material in Spain, some of it representing a health hazard. 
For instance, the police spoke of copied exploding 
cellphones.  The police explained that they went on frequent 
raids and arrested numerous people.  However, convictions 
were rare and companies sometimes settled prematurely 
according to the judicial police.  The police 
representatives were pleased to participate in a U.S.-Spain 
roundtable under Culture Ministry leadership. 
MANZANARES