US embassy cable - 02ROME5982

UNCLAS ROME 005982 
 
SIPDIS 
 
SENSITIVE 
 
STATE PASS USTR 
GENEVA FOR USTR 
 
E.O. 12958: N/A 
TAGS: EIND, ETRD, IT, EUN 
SUBJECT: STEEL: ITALY ON UPCOMING OECD HIGH-LEVEL STEEL 
MEETING 
                       UNCLASSIFIED 
 
 
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REF: SECSTATE 252310 
 
1. (U) ON DECEMBER 13, 2002 ECONOFF SPOKE WITH GIUSEPPE 
LORENZINI, OFFICE III DIRECTOR, DIRECTORATE GENERAL FOR 
COMMERCIAL AGREEMENTS, MINISTRY OF PRODUCTIVE ACTIVITIES 
(WHICH INCLUDES THE FOREIGN TRADE SUB-MINISTRY).  OFFICE III 
HAS THE GOI LEAD ON THE ISSUE OF STEEL RESTRUCTURING. 
 
2. (SBU) LORENZINI TOLD US THAT ITALY, LIKE THE EU, WAS 
GENERALLY IN AGREEMENT WITH THE U.S. ON THE NEED TO ADDRESS 
SUBSIDIES (LORENZINI WAS IN BRUSSELS EARLIER THIS WEEK TO 
COORDINATE THE EU POSITION IN ADVANCE OF NEXT WEEK,S OECD 
MEETINGS). HOWEVER, FOLLOWING THE EU LINE, HE TOLD US HE DID 
NOT BELIEVE PROGRESS IN THE TALKS ON REDUCING OR ELIMINATING 
SUBSIDIES COULD BE ACHIEVED WITHOUT ADDRESSING OTHER ISSUES, 
PARTICULARLY TRADE REMEDIES.  LORENZINI NOTED ITALY'S CONCERN 
THAT MORE ATTENTION SHOULD BE PAID TO REGIONAL AND LOCAL 
SUBSIDIES, IN ADDITION TO THOSE AT THE NATIONAL LEVEL.  IN 
TERMS OF REDUCING CAPACITY, ITALY AGREES WITH THE GOAL, BUT 
POLITICAL REALITIES MAKE THE GOI PARTICULARLY EAGER FOR THE 
DEVELOPMENT OF A MECHANISM TO PROVIDE FINANCIAL INCENTIVES 
FOR CLOSING UNECONOMICAL FACILITIES (THOUGH LIKE MANY OF ITS 
FELLOW EU MEMBERS, GOVERNMENT BUDGET CONSTRAINTS WOULD 
INHIBIT ANY POTENTIAL GOI-FUNDED INITIATIVES). 
 
3. (SBU) THE GOI FORESEES THE OECD REMAINING THE "HOME" OF 
STEEL TALKS INTO 2003, DESPITE THE EU'S HOPE TO HAVE THE 
DECEMBER HLG MEETING THE LAST OF ITS KIND WITHIN THE OECD. 
LORENZINI WAS CAUTIOUSLY OPTIMISTIC THAT AGREEMENT (PERHAPS 
INFORMALLY) TO SOME SORT OF PROPOSAL ON STEEL SUBSIDIES COULD 
                       UNCLASSIFIED 
 
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BE DEVELOPED IN THE FIRST TWO MONTHS OF 2003, TO SUBSEQUENTLY 
BE INCORPORATED INTO WTO NEGOTIATIONS BEFORE THE CANCUN 
MINISTERIAL. 
 
4. (U) REFTEL POINTS WERE ALSO CONVEYED, ON DECEMBER 11, TO 
THE MFA,S DG FOR ECONOMIC COOPERATION, OFFICE OF 
MULTILATERAL ECONOMIC COOPERATION. 
SEMBLER 
 
                       UNCLASSIFIED 
 
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 2002ROME05982 - Classification: UNCLASSIFIED