VZCZCXYZ0008
RR RUEHWEB

DE RUEHSG #0055 0121203
ZNR UUUUU ZZH
R 121203Z JAN 07
FM AMEMBASSY SANTIAGO
TO RUEHC/SECSTATE WASHDC 0695
INFO RUEHPE/AMEMBASSY LIMA 4879
RUEHQT/AMEMBASSY QUITO 1637
RUEHBO/AMEMBASSY BOGOTA 1614

UNCLAS SANTIAGO 000055 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR IIP/G/WHA, INR/R/MR, WHA/BSC, WHA/PDA, INR/IAA 
 
E.O. 12958: N/A 
TAGS: OPRC KMDR KPAO KIPR ECON PGOV PREL VE CI
SUBJECT: MEDIA REACTION - CHILE AND THE PRIORITY WATCH LIST 
 
¶1.  Summary:  Adding Chile to the "Priority Watch List" on January 8 
for its deteriorating protection of intellectual property received 
widespread media coverage.  The GOC expressed disappointment and 
frustration with Chile's placement on the list, claiming that Chile 
has gone to great lengths to implement their IPR commitments under 
the bilateral Free Trade Agreement.  The local pharmaceutical 
industry called the USTR action "unilateral," noting that there are 
no formal complaints in the judiciary over the marketing of drugs. 
AmCham and the U.S.-affiliated pharmaceutical association (CIF) 
expressed grave concern over the announcement, stating that it 
affects Chile's prestige.  End Summary. 
 
¶2.  On January 10, in remarks to conservative, influential 
newspaper-of-record "El Mercurio" (circ. 129,000), Minister of 
Economy Alejandro Ferreiro voiced the GOC's displeasure: "The (U.S.) 
decision is disappointing because the Government has carried out 
clear efforts that we believe are convincing and, in our judgment, 
are sufficient to fully comply with what was required of us in the 
Free Trade Agreement (FTA) with the United States....  We will 
continue our contacts with U.S. officials, demonstrating that we are 
doing what is necessary, consistent, and what the FTA, in our 
judgment, requires....  There is a certain frustration because we do 
not believe that it (the USTR's decision) is consistent with what we 
have done...." 
 
¶3.  The Director of the Foreign Ministry's International Economic 
Relations General Directorate (DIRECON), Carlos Furche, minimized 
the damage of such a classification.  He claimed that any sanctions 
would be a violation of the FTA without going through the dispute 
resolution process first.  Furche doubted that there would be any 
commercial impact or a negative affect on Chile's image as a result 
of USTR's announcement.  In "El Mercurio" on January 11 Fuche 
stated:  "There is a difference of interpretation with the United 
States over the commitments assumed by our country regarding 
intellectual property...." 
 
¶4.  The recording industry ("Federacion Internacional de la 
Industria Fongrafica") estimated its members lost $220 million to 
piracy in the past year.  It stated that the GOC lacks the political 
will to stop piracy.  Critical of USTR, the local pharmaceutical 
industry called the U.S. action "unilateral."  The AmCham and the 
U.S.-affiliated pharmaceutical association (CIF) expressed grave 
concern over USTR's announcement, stating that it affects Chile's. 
 
¶5.  On January 11, conservative, independent Santiago daily "La 
Tercera" (circ. 101,000) carried an editorial column entitled 
"Intellectual and Industrial Property:  Pending Obligations:" 
 
¶6.  "On few occasions had such a measure (Priority Watch List) been 
preceded by so many signs....  Therefore all of the responsibility 
for not implementing the necessary corrections on time falls on the 
Chilean State....  For Chile the consequences are ill-fated.  Not 
only does the country's international reputation suffer, but it 
discourages foreign and domestic research and development in areas 
that are critical to the creation of wealth that does not depend 
uniquely on the selling of commodities.  If forceful legislative, 
executive, and administrative actions are not adopted, the latest 
USTR measure might not be the last, or even the most serious, 
affecting Chile on this matter." 
 
KELLY