VZCZCXRO2293
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #1673/01 1420618
ZNR UUUUU ZZH
O 220618Z MAY 07
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6597
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEAWJB/USDOJ WASHDC
RUEHZS/ASEAN COLLECTIVE

UNCLAS SECTION 01 OF 02 MANILA 001673 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MTS, EAP/EP, AND EB/IFD 
DEPT FOR EB/IPC 
STATE PASS USTR FOR BWEISEL AND DKATZ 
STATE ALSO PASS USAID, OPIC, USDA 
TREASURY FOR OASIA 
USDOC FOR 4430/ITA/MAC 
USDOC PASS USPTO 
STATE ALSO PASS LOC 
 
E.O. 12958: N/A 
TAGS: KIPR ETRD ECON RP
SUBJECT:  USTR Reviews IPR Progress, Economic Openness 
 
¶1. (SBU) Summary.  AUSTR Barbara Weisel and USTR Director for 
Southeast Asia David Katz warned GRP officials that intellectual 
property rights protection must continue to improve if the country 
is to avoid a return to the Priority Watch List.  They told 
Philippine officials and businessmen that any bilateral free trade 
agreement with the United States would include chapters on 
investment, IPR, labor and the environment.  They also urged them to 
be clear on their own goals as they consider the possibility of 
negotiating a FTA.  End summary. 
 
No Free Trade Yet 
----------------- 
 
¶2. (SBU) AUSTR Barbara Weisel and USTR Director for Southeast Asia 
David Katz met with a wide variety of GRP officials and 
businesspeople during their May 8-11 visit to the Philippines.  Most 
of their interlocutors asked Weisel and Katz about the prospects for 
a U.S.-Philippines free trade agreement.  Weisel and Katz explained 
that the USG is open to eventual bilateral talks on free trade, but 
is concerned that GRP negotiators are not aware that the USG would 
seek a comprehensive agreement.  They encouraged Philippine 
businesses to form a clear idea of what their own goals were from 
free trade with the United States, and have a strategy for 
responding to U.S. proposals. 
 
¶3. (SBU) With Alberto Lim, executive director of the Makati Business 
Club (MBC), Katz pressed the view that the issues the United States 
raises in bilateral trade talks, like transparency in government and 
strong competition law, are the same ones the MBC lobbies for 
domestically.  EconCouns added that for a free trade agreement to 
work, the Philippine business sector needed to be committed to it 
and make it clear to the GRP that it was a priority.  Lim appeared 
swayed by the discussion and contacted the Embassy afterwards to 
request that Katz meet the Board of Directors on his next Manila 
visit. 
 
¶4. (SBU) Ambassador Cesar Bautista, co-chair of President Arroyo's 
Competitiveness Summit, led a discussion with a small group of 
academics and businessmen about the increased competitiveness that 
would come from opening the Philippine economy.  Ambassador Donald 
Dee, Chairman of the Philippine Chamber of Commerce and Industry, 
was very enthusiastic about the potential benefits for the local 
textile industry from free trade with the United States.  Francisco 
Buencamino of the Tuna Canners Association of the Philippines was 
enthusiastic about the opportunities in the U.S. market for his 
industry, but worried that pressure from U.S. domestic tuna 
interests would make it hard to include his sector in an agreement. 
 
 
IPR: Build on Existing Achievements 
----------------------------------- 
 
¶5. (SBU) Weisel and Katz met Adrian Cristobal, Director General of 
the Intellectual Property Office.  Cristobal said that while he was 
pleased that the Philippines had been downgraded from the Priority 
Watch List in 2006, his goal was to have the Philippines off the 
Watch List altogether within the next few years.  He described the 
IPO's expanded cooperation with the U.S. Patent and Trademark 
Office.  Katz and Weisel responded that an increase in the number of 
successful prosecutions of IPR violators would be a step toward exit 
from the Watch List.  They urged Cristobal to work with the newly 
elected Congress to pass legislation implementing the WIPO Internet 
Treaties. 
 
¶6. (SBU) Resty Meneses, executive director of the Optical Media 
Board, said that the Board's enforcement efforts had become more 
intensive during the first half of 2007.  He complained that the 
election campaign then drawing to a close had interfered with OMB's 
work, leading to pressure on the Board not to conduct raids and 
because he and Chairman Edu Manzano had not officially been 
reappointed to their positions when their terms expired last March. 
He added that they expected their reappointments to become official 
once the vote counting was over. 
 
¶7. (SBU) Noel delos Reyes, head of the Commercial Crimes division of 
the Philippine National Police, described his team's aggressive 
approach to IPR enforcement.  He has increased the pace of raids and 
seizures over the past six months, and is working more closely with 
foreign companies on filing complaints against pirates.  Delos Reyes 
warned that the policy of prosecuting mall owners after seizures is 
 
MANILA 00001673  002 OF 002 
 
 
unrealistic because the owners are too far removed from daily 
operations to be convicted of complicity in the selling of 
counterfeits.  After hearing that the PNP recently abandoned a raid 
that captured thousands of counterfeit Nike items after the 
company's lawyers abruptly declined to press charges, Katz urged 
delos Reyes not to let this deter him from building relationships 
with American companies. 
 
¶8. (SBU) During a visit to Makati Cinema Square, a notorious market 
for pirated DVD's, Katz observed that while there were fewer stalls 
selling fake discs than in previous years, the number did not seem 
to have declined over the past year, and that discs continued to be 
openly available in several different parts of the mall.  He noticed 
that the vast majority of pirated disks were of Chinese origin, but 
that there was an increased availability of illicit copies of 
Filipino movies. 
 
Kenney