VZCZCXRO7057
RR RUEHCHI RUEHDT RUEHHM
DE RUEHML #2185/01 1450710
ZNR UUUUU ZZH
R 250710Z MAY 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC 1136
INFO RUEHZS/ASEAN COLLECTIVE

UNCLAS SECTION 01 OF 02 MANILA 002185 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/MTS AND FOR EB/TPP/IPE CARRIE LACROSSE 
STATE PASS TO USTR FOR BWEISEL AND DKATZ 
STATE PASS USAID FOR CDOWNEY 
USDOC FOR 4430/ITA/MAC/SBERLINGUETTE 
USDOC PASS TO USPTO FOR PETER FOWLER 
BANGKOK FOR CHRIS SONDERBY 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EINV KIPR WTRO RP
SUBJECT:  ASSISTANT USTR WEISEL'S MEETING WITH SENATOR 
ROXAS: PHARMACEUTICALS, WTO, INVESTMENT ISSUES 
 
SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET 
DISTRIBUTION - PROTECT ACCORDINGLY 
 
REF:  STATE 65243 
 
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SUMMARY 
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¶1.  (SBU) In a meeting with Assistant USTR for Asia 
Pacific and Pharmaceutical Policy on May 16, Senator 
Roxas agreed to work with the USG to address specific 
concerns regarding Senate Bill 2139, which includes 
provisions to expand parallel importation for 
pharmaceuticals.  On WTO Doha Round negotiations, Roxas 
highlighted the GRP position which continues to be 
resistance to further reduction of applied tariff rates 
for non-agricultural market access (NAMA), as well as 
the need to maintain protectionism for certain 
agricultural products.  With respect to legislation to 
restore tax incentives to businesses in the Clark 
Special Economic Zone, Roxas said that the Senate 
unanimously agrees that the legislation should be 
passed.  The legislation is still in Committee, but may 
emerge in a broader piece of legislation dealing with 
other incentive issues, which could slow down its 
passage.  END SUMMARY. 
 
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ROXAS ON WTO DOHA ROUND 
----------------------- 
 
¶2.  (SBU) AUSTR Weisel, accompanied by Econ Counselor, 
Commercial Counselor, and Econoff,  requested that 
Senator Roxas, as Chair of the Senate Committees on 
Economic Affairs and  on Trade and Commerce, support 
the US in the WTO Doha Round negotiations.  Roxas said 
that the GRP still has problems with the NAMA formula, 
which requires more aggressive tariff cuts than the 
Philippines is willing to make.  Roxas argued that the 
RP's average applied tariff rates are low compared to 
the rest of the region.  "We are not getting any credit 
for that.  We are starting from a lower base with no 
room to readjust."  Roxas said that the GRP also has 
issues with the agricultural provisions since the RP 
does have limited products that it wants to protect. 
He cynically concluded that in the end, "We are 
background noise.  Chances are that we will end up 
going along to get along and then suffer the 
consequences." 
 
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SENATE UNANIMOUS ON NEED FOR LEGISLATION ON CLARK 
--------------------------------------------- ---- 
 
¶3.  (SBU) On legislation to restore Clark tax 
incentives, Roxas said that he knows that it is 
sensitive for investors.  Despite unanimous agreement 
within the Senate to address the problem, members 
disagree over how it should be done.  The Chair of the 
Ways and Means Committee, Senator Ralph Recto, wants to 
incorporate language restoring Clark tax incentives 
into a broader piece of legislation that addresses a 
range of incentive issues, he said.  As it stands, the 
Senate is ready to pass legislation on Clark, but if it 
gets linked to other incentive issues, Roxas predicted 
that disagreements could slow it down.  Roxas added 
that the Senate can work on the legislation only after 
it comes out of the Ways and Means Committee, so he 
said he hoped that Recto will keep the Clark 
legislation separate from other incentive proposals. 
 
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ROXAS WILLING TO COMPLY WITH TRIPS 
---------------------------------- 
 
¶4.  (SBU) Weisel raised concerns about Senate Bill 2139 
(SB2139), known as the "Roxas Bill," which proposes to 
amend the Intellectual Property Code of the Philippines 
in order to expand the RP's parallel importation 
program for pharmaceuticals to include patented 
medicines.  Roxas said that he wrote the legislation in 
order to make medicines more affordable to the average 
Filipino.  He said, "The real goal is to try and create 
more competition in the domestic market.  There are 85 
 
MANILA 00002185  002 OF 002 
 
 
million people here, but the actual purchasing power of 
that population is much smaller." 
 
¶5.  (SBU) Weisel suggested alternative means to address 
the issue, including tariff and excise tax reductions 
on pharmaceutical products.  Roxas commented that this 
was a "fair point" and that he "really appreciated the 
exchange."  He said that he sees SB2139 as one way to 
address the problem, but recognizes that there are 
other things the GRP should be doing.  Weisel said that 
countermeasures for counterfeit medicines also deserve 
attention as new policies and legislation are 
considered. 
 
¶6.  (SBU) In response to the USG's request for 
clarification on certain provisions that pose possible 
compliance issues with respect to Trade Related Aspects 
of Intellectual Property Rights Agreement (TRIPs) 
(reftel), Roxas said that the legislation has already 
been reworked.  The Intellectual Property Office (IPO) 
recommended changes in order to ensure TRIPs 
compliance, which have been accepted verbatim.  Roxas 
said that he would send the Embassy a copy of the 
updated bill.  He expressed interest in working with 
the USG to resolve potential TRIPs issues. 
 
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COMMENT 
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¶7.  (SBU) The meeting was positive and focused on 
constructive ways to ensure that SB2139 is TRIPs 
compliant.  The draft legislation has met with 
increasing support from local interest groups but harsh 
criticism from the pharmaceutical industry.  Being able 
to raise TRIPs-related concerns about specific 
provisions (reftel) contributed to the positive tone of 
the meeting.  In previous meetings, Roxas had asked us 
to identify specific issues so that he could work with 
us to address them.  Now that the USG has done that, he 
seemed willing to follow through.  Ultimately, he will 
be responsible to his constituents and their demands 
for cheaper medicines, but there is now an opportunity 
to collaborate and ensure that new legislation 
addresses USG concerns.