VZCZCXRO3908
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHRO #2214/01 2920952
ZNR UUUUU ZZH
P 190952Z OCT 07
FM AMEMBASSY ROME
TO RUEHC/SECSTATE WASHDC PRIORITY 9277
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUEHBS/USEU BRUSSELS PRIORITY 4572

UNCLAS SECTION 01 OF 02 ROME 002214 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR USTR - SHAUN DONNELLY 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KIPR PREL IT
SUBJECT: AUTSR DONNELLY ENGAGES GOI ON DOHA, IPR/ACTA, AND 
IMPORT SAFETY ISSUES 
 
REF: STATE 114788 
 
¶1.  (U) Summary.  In a September 26 meeting, GOI trade 
official Leonardo Schiavo told Assistant USTR Shaun Donnelly 
the GOI is committed to the success of the Doha Round, at the 
same time making clear that geographic indications are a key 
issue for the GOI.  Schiavo characterized Italy as "one of 
the main victims of IPR crime," and criticized Italy's 
inclusion on the Special 301 Watch List.  In a separate 
meeting with GOI IPR officials, Donnelly pressed them to 
establish a GOI "Action Plan" on IPR enforcement and to take 
steps to strengthen GOI IPR enforcement efforts.  Schiavo 
expressed reservations about the shipping container 
inspection legislation recently passed by Congress, but 
expressed willingness to work with USG officials to establish 
mechanisms for the inspection of containers being shipped 
from Italian ports to the U.S.  End summary. 
 
WTO and the Doha Round 
---------------------- 
 
¶2.  (U) Schiavo, Chief of Staff to Italian Trade Minister 
Emma Bonino, opened the meeting by noting the GOI is 
concerned the Doha Round of trade talks is not proceeding "at 
an adequate speed for a breakthrough" and that the "overall 
context is not encouraging."  Donnelly and Schiavo agreed 
that whatever agreement comes out of the Doha Round will not 
completely satisfy all of the parties, and that it is 
essential to keep pressure on the newly industrialized 
countries to make concessions on services and NAMA access. 
Schiavo identified geographic indications (GIs) as the "key 
issue" for the GOI in the WTO negotiations, and argued that 
GI protections are necessary for Italy to protect its 
position as a "quality product exporter." 
 
¶3.  (U) Schiavo expressed concern about "how an agreement 
that is fair to emerging economies will be received by 
Congress," and how Congress will react to possible cuts in 
farm subsidies.  Donnelly noted USTR Schwab believes a good 
Doha package can get a Congressional majority, and that 
Schiavo's concerns highlight the need to maintain a high 
level of ambition for the ongoing round of negotiations. 
Ambitious negotiations that result in a "solid package" with 
meaningful market access will facilitate renewal of the 
President's Trade Promotion Authority (TPA) and Congressional 
approval of a Doha Trade agreement.  Donnelly concluded that 
in order for the Doha Round to be successful, India and 
Brazil need to provide meaningful market access, especially 
to exports from developing economies. 
 
IPR, Special 301, and ACTA 
-------------------------- 
 
¶4.  (U) Schiavo commented that Italian companies are among 
the leading victims of IPR crimes and outlined steps taken by 
the GOI to crack down on IPR violators, including setting up 
14 "Anti-counterfeiting Desks" in Italian embassies.  He 
lambasted the Special 301 process as "patronizing," and said 
the GOI "should not be criticized because some Moroccan sells 
fake CDs on the street."  Schiavo argued that USG IPR 
protection efforts should focus on China and Russia, which he 
alleged are the source of the majority of counterfeit goods 
sold in Italy.  Donnelly replied that in order for Italy to 
be removed from the Special 301 Watch List, the GOI needs to 
"establish a record of actual arrests and convictions," and 
that without concrete actions on the ground, removal from the 
list is not likely.  Donnelly also urged Schiavo to broaden 
the focus of GOI IPR enforcement efforts to include 
protection of software, music, and film copyrights, and noted 
that the future of the Italian economy is in intellectual 
property-based products, not trademarked luxury goods. 
(Note: The GOI tends to view IPR protection as a trademark 
issue.  End note.) 
 
¶5.  (U) Schiavo next shifted his focus to the proposed 
Anti-Counterfieting Treaty Agreement (ACTA).  He told 
Donnelly that within the EU, competency over ACTA issues is 
mixed.  While the EU is responsible for ACTA-related trade 
issues, member states are responsible for the enforcement of 
the relevant laws and regulations.  Schiavo, who is on detail 
from the EU to the Italian government, expressed confidence 
that this mix of competencies would not pose a problem in 
implementing ACTA. 
 
¶6.  (U) Donnelly also raised ACTA in his later meetings with 
Mauro Masi, the GOI delegate to the World Intellectual 
Property Organization (WIPO), and Giovanni Kessler, the GOI 
Anti-Counterfeiting High Commissioner, pointing out the need 
to improve Italy's track record on IPR enforcement and to 
 
ROME 00002214  002 OF 002 
 
 
expand GOI enforcement efforts.  Donnelly suggested Italy 
prepare an "Action Plan" detailing GOI plans to strengthen 
IPR enforcement.  In contrast to Schiavo, both Masi and 
Kessler acknowledged Italy's IPR protection problem and 
welcomed Donnelly's input on how to address it effectively. 
Masi was less sanguine than Schiavo regarding ACTA, and noted 
a significant gap between the EU Commission views and those 
of several members states (including Italy) on how ACTA 
competencies should be allocated.  While reiterating Italy's 
support for ACTA, and predicting approval of the treaty, Masi 
frankly stated that "there is a problem" between the 
Commission and some member states, "that will take time to 
work out." 
 
¶7.  (U) Masi described the upcoming IPR conference chaired by 
Ambassador Spogli, Deputy Prime Minister D'Alema, and Justice 
Minister Mastella.  Donnelly suggested the conference could 
provide an opportunity to launch an Italian IPR Action Plan. 
He also highlighted the importance of maintaining accurate 
data on IPR enforcement activities, including arrests, 
convictions, and seizures, as part of Italian efforts to get 
off the Special 301 Watch List. (Note:  Masi is a senior 
civil servant in the GOI, and has significant experience with 
IPR issues in Italy.  In addition to his position as Italian 
IPR Delegate, he is Deputy Prime Minister D'Alema's Chief of 
Cabinet.  Kessler, a former parliamentarian, also is charged 
with coordinating Italy's IPR protection activities.  End 
Note.) 
 
Import Safety Dialogue 
---------------------- 
 
¶8.  (U) Schiavo said that Trade Minister Emma Bonino had 
wanted to meet with Donnelly but that she was in Strasbourg 
to attend a meeting on product origins.  The recent recall of 
products exported to America and Europe from China has made 
import safety an emotional issue, especially because 
children's toys were among the products recalled.  In 
Schiavo's opinion, the way the issue was portrayed in the 
press was "unfair to China," because the products were 
approved by American importers (Schiavo singled out Mattel) 
and Chinese manufacturers were simply using cheaper materials 
in response to downward price pressure.  Schiavo said he 
thought the EU reaction to the discovery of lead paint on 
Chinese-origin toys, for example, has been good, and that the 
EU has taken "correct measures" to inform consumers and 
ensure the affected products were withdrawn from the market. 
Schiavo said that within the GOI, the Trade Ministry takes 
the lead on import safety issues. 
 
Container Inspection 
-------------------- 
 
¶9.  (U) Schiavo then turned to the issue of inspecting 
incoming goods.  He noted the impossibility of inspecting 
every container coming into Italy, much less the United 
States, and criticized legislation recently passed by 
Congress which mandates universal inspections by 2012. 
Schiavo characterized the legislation as "extraterritorial 
and contrary to international law" because of the detrimental 
effect it will have on ports in countries that do not act 
aggressively to implement inspection regimes, and expressed 
interest in working with the USG to implement some form of 
container screening at major Italian ports.  "My fear is that 
the politicians won't focus on this until 2010, and by then 
it will be too late," he concluded. 
 
Comment 
------- 
 
¶10.  (U)  While Schiavo was very clear and forceful in his 
criticisms, he also left the door open to cooperation with 
the USG on a number of issues, including WTO negotiations, 
import safety, and improving Italy's IPR enforcement record. 
Masi and Kessler were rather receptive to Donnelly's input on 
how to improve Italy's standing on the 301 Watch List, and 
have expressed willingness to work with the USG on IPR issues 
in the past.  The upcoming IPR event with Ambassador Spogli 
and Ministers D'Alema and Mastella should provide a good 
opportunity for the Ministers to outline GOI plans to address 
Italy's chronic IPR problems.  End comment. 
SPOGLI