US embassy cable - 03ROME839

UNCLAS ROME 000839 
 
SIPDIS 
 
SENSITIVE 
 
SECSTATE PASS AGRICULTURE ELECTRONICALLY FOR 
FAS/ITP/EAMED; FAS/CMP/GFD; FAA/AO/WE/WILSON 
STATE PASS USTR 
STATE PASS TO ALL EUROPEAN UNION POST COLLECTIVE 
GENEVA FOR USTR 
 
E.O. 12958: N/A 
                       UNCLASSIFIED 
 
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TAGS: ETRD, EAGR, IT, USTR 
SUBJECT:  REQUEST FOR FEEDBACK ON EU PROPOSAL 
TO MODIFY RICE IMPORT REGIME 
 
REF: STATE 46808 
 
1.  ( SBU) PER REFTEL, EMBASSY ROME DELIVERED 
TALKING POINTS TO THE GOI ON THE INITIATIVE 
TO MODIFY THE MARGIN OF PREFERENCE (MOP) FOR 
RICE, AT THE MINISTRY OF AGRICULTURE AND AT 
THE MINISTRY OF PRODUCTIVE ACTIVITIES (MPA). 
MINAG EXPLAINED TO FAS AG ATTACHE AND AG 
SPECIALIST ITALY'S REASONS FOR CHANGING THE 
MOP, EXPRESSED HOPE THAT ITALY COULD SWAY 
BELGIUM TO LEAVE THE BLOCKING MAJORITY WHICH 
CURRENTLY STANDS AGAINST MODIFICATION, AND 
APPEALED TO US RICE PRODUCING INTERESTS TO 
ARGUE FOR REPLACING THE MOP WITH QUOTAS WHICH 
WOULD ENHANCE US MARKET ACCESS. 
 
2.  (SBU) FAS MET WITH MINISTRY OF 
AGRICULTURE'S ALESSANDRO DI MONACO, HEAD OF 
THE ARABLE CROPS DIVISION. HE ACKNOWLEDGED 
ITALY'S INTERESTS AS THE EU'S LARGEST 
PRODUCER OF RICE AND  HE APPEALED TO THE US 
TO CONSIDER THAT US RICE EXPORTS WOULD 
BENEFIT FROM CHANGING THE MOP TO A QUOTA 
SYSTEM, MUCH LIKE THE RECENT CHANGE TO THE 
MOP FOR OTHER GRAINS HAS BENEFITTED US WHEAT 
EXPORTS. HIS ARGUMENT IS THAT IN  RECENT 
YEARS EU IMPORTS OF RICE FROM PAKISTAN AND 
                       UNCLASSIFIED 
 
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INDIA HAVE GAINED MARKET SHARE AT DUTY 
ABATEMENT RATES, DISPLACING IMPORTS FROM 
OTHER ORIGINS, INCLUDING THE U.S. 
 
3. (U) ACCORDING TO DI MONACO IN THE MOST 
RCCENT MARKETING YEAR EU RICE IMPORTS FROM 
PAKISTAN AND INDIA HAVE REACHED OVER 300,000 
TONS (MILLED BASIS) OUT OF A TOTAL 500,000 
TONS OF IMPORTS. 
 
4.  (SBU) ECONOFF SEPARATELY RAISED U.S. 
CONCERNS WITH SANDRO FANELLA OF THE FOREIGN 
TRADE OFFICE AT THE MINISTRY OF PRODUCTIVE 
ACTIVITIES. FANELLA EMPHASIZED THAT THE GOI 
WAS ACTIVELY PUSHING THE EU TO MODIFY THE 
CURRENT RICE IMPORT REGIME. FANELLA NOTED 
THAT ITALY BELIEVED A TRQ SYSTEM WOULD 
PROVIDE A MORE TRANSPARENT PRICING SYSTEM ON 
RICE THAT WOULD ASSIST ITALIAN RICE PRODUCERS 
IN MARKETING THCIR PRODUCT. 
 
5. (SBU) MINAG CLAIMS THAT ITALIAN RICE 
PRODUCERS, UNDER THE CURRENT CONSOLIDATED 
SYSTEM LINKING THE INTERVENTION PRICE TO 
DUTIES, ARE DISADVANTAGED BY AN ERRONEOUS 
CALCULATION WHICH DOES NOT TAKE INTO ACCOUNT 
THEIR ACTUAL PROCESSING COSTS. ACCORDING TO 
MINAG THIS IS A REASON TO OPEN ARTICLE 28 
NEGOTIATIONS. 
 
6.  (SBU) MINAG CONFIRMED THAT THE COMMISSION 
                       UNCLASSIFIED 
 
PAGE 04        ROME  00839  281059Z 
HAS POSTPONED DISCUSSION OF THE MOP FOR RICE 
UNTIL 10 MARCH. DURING THE INTERIM ITALY 
HOPES TO PERSUADE BELGIUM OR ANOTHER MEMBER 
WITH A MINIMUM OF TWO VOTES TO LEAVE THE 
BLOCKING MAJORITY.  SCMBLER. 
 
NOTE: NOT PASSED TO ABOVE ADDRESSEE(S) 
 
                       UNCLASSIFIED 
 
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 2003ROME00839 - Classification: UNCLASSIFIED