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
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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