US embassy cable - 05MANILA5800

C O N F I D E N T I A L MANILA 005800 
 
SIPDIS 
 
STATE FOR EAP/MTS, EB/TPP 
STATE PASS USDA FOR U/S PENN; FAS FOR TERPSTRA, ROBERTS, 
SHEIKH 
STATE PASS USTR FOR MURPHY, HAFEMEISTER, DKATZ 
 
E.O. 12958: DECL: 12/13/2015 
TAGS: ETRD, EAGR, ECON, RP, WTRO 
SUBJECT: MIXED SIGNALS FROM MANILA ON WTO DOHA ROUND 
 
REF: A. A) STATE 207068 
 
     B. B) 211956 
     C. C) MANILA 05505 
 
Classified By: ECON COUNSELOR ROBERT LUDAN FOR REASONS 1.4 (B) and (D) 
 
1.  (C)  SUMMARY.  President Arroyo expressed unequivocal 
support December 9 for the US position at this week's WTO 
ministerial meeting in Hong Kon (septel), but other senior 
GRP officials have told us that the Philippines will "wait 
and see" before taking a position.  We would welcome feedback 
on Philippine negotiators' position at Hong Kong.  Public 
skepticism continues here regarding the benefits of a 
successful Doha Round.  The GRP and farmer organizations 
continue to put forth the argument that developed country 
subsidies are the root cause of Filipino farmers, 
difficulties.  END SUMMARY. 
 
2.  (C)  Despite a pledge December 9 by President Arroyo of 
unequivocal support for the US proposal on trade 
liberalization and agricultural subsidies with respect to 
this week,s WTO Ministerial meeting and the Doha Round 
(septel), Thomas Aquino, Senior Undersecretary at the 
Department of Trade and Industry (DTI) and a key member of 
the GRP,s WTO delegation, told Econ Counselor on December 9 
that the GRP plans to wait and see how things play out 
between the United States and the European Union.  If the two 
cannot agree, that will essentially set the tone for the 
meeting, he noted.  Aquino said that the Philippines is not a 
major player in global markets, so the GRP expects the US and 
the EU to find a consensus, then developing nations such as 
the RP "will have something to look at." 
 
3.  (U) Aquino noted that the GRP cannot go beyond its most 
recent services offer due to constitutional limitations; the 
1986 Constitution reserves several sectors and professions 
for Filipinos, including many in the service industries.  On 
Non-Agricultural Market Access (NAMA), the GRP,s general 
position remains unchanged from previous WTO Doha meetings, 
which is essentially against any further moves to reduce 
tariffs, Aquino confirmed. 
 
4.  (SBU) Undersecretary of Agriculture for Policy and 
Planning at the Department of Agriculture Segfredo Serrano 
told AgCounselor recently that the EU proposal cannot be 
evaluated solely on the market access pillar alone, as the 
overall proposal has "fundamental problems."  He added that 
bludgeoning the EU in Hong Kong would be counterproductive, 
comparing such an approach to attacking the U.S. domestic 
support proposal as "disingenuous."  With respect to 
geographical indications, Serrano said he agrees with the 
U.S. position, considering GI not to be a mandate of the 
agricultural negotiations; rather, GI should be handled under 
the TRIPS agreement discussions.  GRP officials also 
indicated suspicion of US/EU intentions vis-a-vis the various 
support boxes, i.e., concern that domestic support in the 
US/EU will change very little because current programs will 
just be moved from amber to blue and/or even green box 
policies, or the criteria for those support programs may be 
changed. 
 
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COMMENT 
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5.  (SBU) Unless President Arroyo produces a turnaround, we 
expect the GRP to continue its cautious approach and to hide 
in the background and seek cover through its membership in 
various groups such as the G-20, G-33, and Cairns Group. 
Since each group has disparate positions on the issues, the 
GRP seems to be picking and choosing which positions it will 
support, despite President Arroyo's show of support.  The GRP 
is unwilling to press the EU like fellow Cairns Group members 
Australia and Canada because it wants to enjoy the greater 
market access sought by developing countries; joining 
Australia and Canada would be contrary to this goal.  The GRP 
seems to want a successful conclusion to the Doha Round, but 
is not willing to assume any leadership to bring it about. 
 
Jones