US embassy cable - 02ROME3422

UNCLAS ROME 003422 
 
SIPDIS 
 
SECSTATE FOR EB/TPP/AND EUR 
USDA FOR FAS/ITP/EAMED AND CMP/GFD 
DEPT PLEASE PASS TO USTR 
 
E.O. 12958: N/A 
TAGS: EAGR, ETRD, IT, EUN 
SUBJECT: USG OPPOSITION TO EU PROPOSAL TO 
MODIFY GRAIN IMPORT REGIME DISCUSSED WITH 
BELGIAN TRADE MINISTRY 
 
 
1.  ITALY'S AGMIN PARTICIPANT IN THE 133 
COMMITTEE MEETING AND SUBSEQUENT SPECIAL 
                       UNCLASSIFIED 
 
PAGE 02        ROME  03422  111258Z 
COMMITTEE ON AGRICULTURE REPORTS THAT THE 
COMMISSION'S PROPOSAL TO RECTIFY THE MARGIN 
OF PREFERENCE FOR GRAINS WAS SOLIDLY 
REJECTED BY MOST, IF NOT ALL DELEGATIONS, 
ALBEIT FOR DIFFERENT REASONS.  ITALY EXPECTS 
THAT THE COMMISSION WILL HAVE TO GO BACK TO 
THE DRAWING BOARD. 
 
2.  ITALY PREFERS TO MAINTAIN THE CURRENT 
MARGIN OF PREFERENCE SYSTEM WHILE TAKING 
SEPARATE ACTION AGAINST GRAIN IMPORTS FROM 
THE BLACK SEA REGION.  ITALY SEES THIS AS AN 
EXPEDIENT AND VIABLE OPTION GIVEN NEITHER 
UKRAINE NOR RUSSIA ARE WTO MEMBERS.  TARIFF 
RATE QUOTAS ARE NOT THE ANSWER ACCORDING TO 
OUR CONTACT.  THIS IS CONSISTENT WITH 
ITALY'S STATUS AS A LARGE NET IMPORTER OF 
HIGH-QUALITY WHEAT. 
 
3.  WITH RESPECT TO RICE, ITALY BELIEVES THE 
EU MADE A MISTAKE AT THE END OF THE URUGUAY 
ROUND WHEN IT CALCULATED THE IMPORT DUTY FOR 
RICE ON A PADDY BASIS RATHER THAN ON A ROUGH 
BASIS, AND THAT THIS ERROR SHOULD BE 
CORRECTED.  THAT SAID, ITALY TOLD THE 133 
COMMITTEE THAT RECTIFICATION OF THE RICE 
DUTY SHOULD NOT BE TIED TO ACTION ON THE MOP 
FOR GRAINS.   SEMBLER 
 
                       UNCLASSIFIED 
 
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 2002ROME03422 - Classification: UNCLASSIFIED