VZCZCXRO3526
PP RUEHRG
DE RUEHBR #1648 2411809
ZNR UUUUU ZZH
P 291809Z AUG 07
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 9836
INFO RUEHSO/AMCONSUL SAO PAULO 0679
RUEHRI/AMCONSUL RIO DE JANEIRO 5010
RUEHRG/AMCONSUL RECIFE 7076
RUCPDOC/USDOC WASHDC

UNCLAS BRASILIA 001648 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EB/TPP/IPE JENNIFER BOGER AND JOELLEN URBAN 
DEPT FOR EB/TPP/MTA/IPC RACHEL WALLACE 
DEPT PASS USTR FOR CHRIS WILSON, KATHERINE DUCKWORTH AND JENNIFER 
CHOE GROVES 
DEPT PASS USPTO 
USDOC FOR ITA/MAC/OIPR CASSIE PETERS 
USDOC FOR ITA/MAC/WH/OLAC/MCAMPOS 
 
E.O. 12958: N/A 
TAGS: KIPR ETRD ECON BR
SUBJECT:  BRAZIL: GOB THREAT TO SUSPEND IPR OF US CITIZENS 
 
 
¶1. (SBU) Summary:  Otavio Brandelli, Chief of the Division of 
Intellectual Property Rights at the Ministry of External Relations 
told EconOff on August 27 that the media exaggerated some elements 
of an August 24 report announcing GoB plans to "cross-retaliate" 
over a WTO finding against U.S. cotton subsidies by suspending the 
intellectual property rights of U.S. citizens and businesses.  He 
noted that the GoB has not yet asked the WTO for authorization to 
"cross-retaliate" in this manner and was only laying the legal 
groundwork to retaliate should the WTO authorize such action - which 
he thought would be over a year away if it did occur. 
Characterizing legislation being introduced by Deputy Paulo Teixeira 
(PT-SP - Workers Party, Sao Paulo State) as too broad, he said GIPI, 
the GoB inter-ministerial council, planned to form a subcommittee to 
draft alternative legislation.  Separately, Sao Paulo industry 
contacts told Sao Paulo EconOff that they were not aware of the 
specifics of this proposal, but considered the issue significant and 
were not wholly unsympathetic to the GoB position. End Summary. 
 
¶2.  (SBU) According to Brandelli, the GoB is still studying the 
possibility of "cross-retaliation" and has not reached a decision. 
He said that a 2005 GoB request to the WTO for "cross-retaliation" 
against U.S. IPR interests in connection with its cotton case only 
applied to patents.  A new WTO request would be broader.  New 
legislation will be introduced by Deputy Paulo Teixeira (PT-SP - 
Workers Party, Sao Paulo State) the week of August 27 to provide a 
legal framework for "cross-retaliation" covering all IPR areas, 
should such action be authorized by the WTO and the GoB decide to 
retaliate.  Brandelli said he felt the language in the legislation 
the Deputy plans to introduce should be more precise.  To that end, 
he said the GoB inter-ministerial council (GIPI) was forming a 
sub-committee to draft alternative legislation.  All of which, he 
assured, would be done within WTO guidelines.  Brandelli added that 
his government would prefer a negotiated settlement to the cotton 
dispute, which he claimed was costing Brazilian industry US$ 4 
billion a year. 
 
----------------- 
Industry Reaction 
----------------- 
 
¶3.  (SBU) Sao Paulo industry and trade associations seem to have 
been left out of the federal government's decision to consider 
cross-retaliation.  When contacted by Sao Paulo EconOff, they had no 
knowledge of the details of the government's strategy.  Generally 
speaking, the contacts said the issue is clearly important and that 
they planned to discuss it at higher levels within their 
organizations.  Frederico Meira, International Negotiations 
Supervisor at the Sao Paulo Federation of Industries (FIESP), said 
any measure that breaks patents and undermines the rule of law is 
harmful; however, the GoB should work within the WTO panel's 
decision and protect Brazilian industries that may suffer from 
unfair US trade practices. 
 
¶4.  (SBU) Comment:  At this point, it appears that the GoB is 
strongly considering "cross-retaliation" against U.S. IPR interests 
if the USG does not comply with the WTO cotton case finding and 
contests the results, but has not made a final decision.  If this 
strategy proves successful, the GoB may attempt to expand it to 
combat all USG and EU agricultural subsidies in general, which would 
also encompass EU IPR interests.  Yet, planning is in its infancy 
and GIPI may well propose competing legislation to that being 
introduced by Deputy Teixeira leading to a delay in passage of any 
enabling legislation in Brazil's already lengthy legislative 
process.  End Comment. 
 
¶5. (U) This cable was coordinated with Consulate General Sao Paulo. 
 
Chicola