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Viewing cable 07LISBON2288, AUSTR DONNELLY DISCUSSES TRADE ISSUES WITH

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Reference ID Created Released Classification Origin
07LISBON2288 2007-09-06 14:16 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Lisbon
VZCZCXRO9929
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHLI #2288/01 2491416
ZNR UUUUU ZZH
R 061416Z SEP 07
FM AMEMBASSY LISBON
TO RUEHC/SECSTATE WASHDC 6205
INFO RUCNMEM/EU MEMBER STATES
RUCPDOC/USDOC WASHDC
UNCLAS SECTION 01 OF 02 LISBON 002288 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PLEASE PASS USTR PAUL BURKHEAD 
 
E.O. 12958: N/A 
TAGS: ECON ETRD PO
SUBJECT: AUSTR DONNELLY DISCUSSES TRADE ISSUES WITH 
PORTUGUESE EU PRESIDENCY 
 
 
SUMMARY 
------- 
1. (SBU) AUSTR for Europe and the Middle East Shaun Donnelly 
and USTR Director for European and Middle Eastern Trade 
Affairs Paul Burkhead held meetings with Portuguese trade and 
economic officials in Lisbon on August 28. They discussed 
Doha Round next steps, November 9 Transatlantic Economic 
Council (TEC) preparations, US-EU engagement on the 
Anti-Counterfeiting Trade Agreement, and Washington,s 
increasing frustration with the EU's interpretation of its 
commitments under the WTO  Information Technology Agreement. 
 
2. (SBU) Donnelly, Burkhead and Acting Pol-Econ Counselor 
held a joint meeting with Vitor Escaria, the Prime Minister's 
Economic Adviser, and Rui Macieira, the MFA's Deputy 
Director-General (DG) for European Affairs.  They also met 
separately with Nuno Lucio, the Ministry of Economy's Deputy 
DG for Economic Activities. End Summary. 
 
DOHA NEGOTIATIONS 
----------------- 
 
3. (SBU) AUSTR Donnelly and Escaria both underscored the 
importance of successfully concluding the Doha round 
negotiations before the end of the year. Although the U.S. 
and EU positions were similar, Donnelly said, both sides 
needed to pursue an ambitious negotiating stance rather than 
settle for a lowest-common-denominator result. Escaria agreed 
with Donnelly that Argentina, Brazil, China, India, Korea and 
the ASEAN countries needed to put "real" market access on the 
negotiating table, and that Brazil * perhaps more than India 
* was eager to conclude the round. However, Brazil still had 
to be careful not to appear to sell out the Argentines, 
Macieira commented. He noted that the EU-Mercosul interest in 
negotiating a Free Trade Agreement was added EU impetus for 
quickly concluding the Doha negotiations, as neither side 
thought the FTA would advance absent an agreement. Lucio 
suggested that the key to finding a resolution on Doha was to 
strike a balance between tariffs and trade gains based on 
greater market access and a level playing field. He also 
noted the importance of demonstrating market access gains and 
improving standards of living to garner public support for 
globalization. 
 
TRANSATLANTIC ECONOMIC COUNCIL (TEC) 
------------------------------------- 
 
4. (SBU) The Portuguese identified the TEC * along with Doha 
* as a Portuguese EU Presidency priority. Donnelly commented 
that what made the TEC different from the previous attempts 
at transatlantic economic dialogue was the TEC's hands-on 
involvement from political levels. Escaria agreed that high 
level political backing was crucial to accelerate US-EU trade 
cooperation, adding that Lisbon was "very keen" on having a 
successful November 9 meeting to show that the new forum 
could deliver results.  The Portuguese confirmed that Economy 
Minister Manuel Pinho plans to attend. 
 
ANTI-COUNTERFEITING TRADE AGREEMENT (ACTA) 
------------------------------------------ 
 
5. (SBU) Donnelly raised the Anti-Counterfeiting Trade 
Agreement (ACTA) and mentioned the Italian government's view 
that member-states should be directly involved in ACTA 
negotiations.  He underscored Washington's desire to avoid 
getting in the middle of a debate on EU member-state 
competencies while noting that the topic was a complex one 
involving not only trade, but also intellectual property 
rights, customs, law enforcement, and judicial issues. 
Escaria said the Portuguese government was aware of the 
debate and noted that Lisbon was happy with the leadership of 
the Commission on the issue.  Macieira agreed, but emphasized 
that, as discussions progressed, member-states would have to 
be brought into the dialogue.  Lucio stressed that the work 
covered by ACTA is very important and should be tackled in a 
high-profile way to help give visibility to the issue. 
 
INFORMATION TECHNOLOGY AGREEMENT (ITA) 
-------------------------------------- 
 
6. (SBU) Donnelly also discussed Washington's increasing 
frustration with the EU's interpretation of its ITA 
commitments. Specifically, he expressed concern that as 
certain IT products have evolved, with new features or 
capabilities being added, the Commission has sought to 
reclassify these items as new products not covered under the 
ITA, and thus not entitled to preferential tariff treatment. 
Donnelly told his Portuguese interlocutors that Washington 
 
LISBON 00002288  002 OF 002 
 
 
"feels like we are being blackmailed" and expressed concern 
that this issue could become the next big U.S.-EU trade 
dispute, possibly during Portugal's EU presidency.  Escaria 
suggested that the disagreement could be dealt with in a 
discussion on enhancing the ITA and said that the agreement's 
scope needed to be formally articulated.  Burkhead 
acknowledged that the Commission had suggested dealing with 
USTR's concerns through negotiations on ITA expansion, and 
added that Washington was happy to discuss the issue of 
expanding ITA coverage but did not want to renegotiate what 
had already been agreed.  Both Escaria and Macieira said that 
Lisbon was ready to discuss the issue. 
 
TWO SEPARATE ITEMS ) IRAN AND GEOGRAPHIC INDICATIONS 
-------------------------------- 
7. (SBU) Macieira raised two separate subjects of interest to 
the Portuguese government ) Iran and the EU/US wine 
agreement(s).  He noted that the GOP was very concerned that 
the US might impose unilateral sanctions on Iran. He 
emphasized that Lisbon would be more troubled with the 
unilateral nature of such sanctions rather than on whether 
the sanctions were merited.  Donnelly indicated that USTR did 
not have the lead role on the issue but that he would gladly 
relay Lisbon's concerns to Washington. Macieira also 
expressed interest in an expedited resolution on the Part II 
of the U.S.)EU Wine agreement and noted that the EU was 
encouraged by the recent US Supreme Court ruling on Napa 
Valley wines. Portuguese also noted the importance they and 
the EU ascribed to the geographic indications (GI) issue. 
Donnelly explained USG views on GIs, in Doha context and more 
generally. 
 
 
AUSTR Donnellly has cleared this cable. 
 
Hoffman