US embassy cable - 05MADRID2618

UNCLAS MADRID 002618 
 
SIPDIS 
 
STATE FOR EB/TPP/ABT 
STATE PASS TO USTR FOR MURPHY, BOMER 
DEPT OF AGRICULTURE/FAS/ITP FOR SHEIKH, DYOUNG, POMEROY 
DEPT OF AGRICULTURE/FAS/OA FOR TERPSTRA, 
DEPT OF AGRICULTURE/FAS/FAA FOR BLEGGI 
BRUSSELS PASS USEU FOR AG MINCOUNS 
EU POSTS PASS TO AGRICULTURE 
 
E.O. 12958: N/A 
TAGS: EAGR, ECON, ETRD, EU, SP, Trade Issues 
SUBJECT: U.S.-EU WINE NEGOTIATION:SPANISH CONCERNS 
 
REF: (A) BERLIN 2313 (B) STATE 127679 (C) 6/16/05 
     SCHONANDER-WILSON E-MAIL 
 
1. EconOff met with Ministry of Industry, Tourism and Trade 
Subdirector General for Agricultural Trade, Agustin Velilla 
Sanz, on 7/12/05 to discuss ref (B).  Velilla was reticent to 
spell out the Spanish position; he prefaced his remarks by 
saying there would be a common EU position, and that it was 
not "fair play" for the U.S. to seek out individual country 
positions.  Having said that, he posited that there probably 
would be an agreement, especially because the EU exports so 
much more wine to the U.S. than the U.S. exports to the EU. 
He reiterated (ref C) the Spanish view that the Title III 
Article 6 1. U.S. commitment to "seek to change the legal 
staus of the terms in Annex II" is too weak.  Spanish 
industry remains particularly concerned about the treatment 
of sherry and malaga.  Velilla noted that when Spain entered 
the EU in 1986, Spanish producers of sparkling wines were 
forced to drop the use of the semi-generic name of 
"champagne".  Sparkling wine producers call their product 
"cava" now, and they are very successful.  Velilla implied 
U.S. producers should not be afraid of similar changes. 
Velilla then went on to explain the EU position as being 
heavily influenced, not so much by commercial considerations, 
as by the EU's philosophical emphasis on geographical 
indications. 
 
2. AgCouns met with Ministry of Agriculture Director General 
Angel Luis Alvarez on 7/11/05 to discuss the wine agreement. 
According to Alvarez, Spain is still considering its position 
going into the 7/15/05 133 Committee meeting in Brussels.  He 
told AgCouns that Spain would likely support the agreement as 
currently drafted, although he would not provide a commitment 
that Spain would do so. 
AGUIRRE