VZCZCXYZ0002
RR RUEHWEB
DE RUEHML #0820 0940443
ZNR UUUUU ZZH
R 030443Z APR 08
FM AMEMBASSY MANILA
TO RUEHRC/USDA FAS WASHDC 1413
RUEHC/SECSTATE WASHDC 0293
RUEHGV/USMISSION GENEVA 2218
UNCLAS MANILA 000820
SIPDIS
SENSITIVE
SIPDIS
USDA/FAS/ONA/BERTSCH
USDA/FAS/OCRA/LUCHOK
STATE PASS USTR/WEISEL/EHLERS/O'CONNOR/CLARKSON
E.O. 12958: N/A
TAGS: EAGR ECON ETRD RP
SUBJECT: MEETING WITH PHILIPPINE GOVERNMENT ON MINIMUM ACCESS
VOLUMES
1. (SBU) ON APRIL 2, USTR'S KARL EHLERS, ECONOFF, AGCOUNS AND LES
MET WITH UNDERSECRETARY BERNIE FONDEVILLA OF THE PHILIPPINE
DEPARTMENT OF AGRICULTURE (DA) TO DISCUSS THE STATUS OF THE REVIEW
OF THE PHILIPPINE MINIMUM ACCESS VOLUME (MAV) GUIDELINES.
2. (SBU) FIRST, EHLERS THANKED USEC. FONDEVILLA, EXECUTIVE DIRECTOR
OF THE DA MAV SECRETARIAT, FOR THE OPPORTUNITY TO MEET. EHLERS SAID
THAT HE CAME TO MANILA TO DELIVER AN IMPORTANT MESSAGE OF CONCERN
FROM USG AND INDUSTRY. SPECIFICALLY, HE WANTED TO FOLLOW UP THE
STATUS OF THE REVIEW OF THE MAV GUIDELINES AND TO REITERATE THE
REQUEST TO COMMENT ON THE DRAFT VERSION BEFORE IMPLEMENTATION,
CONSISTENT WITH WTO OBLIGATIONS AND THE 1998 US-PHILIPPINES PORK AND
POULTRY MAV MEMORANDUM OF UNDERSTANDING. HE ALSO SAID HE HAD THE
HONOR OF SEEING SEC. ARTHUR YAP AT A BREAKFAST MEETING WITH U.S.
INDUSTRY AND USG REPRESENTATIVES IN WASHINGTON LAST MONTH. SEC. YAP
TOLD THEM THAT THE MAV REVIEW PROCESS WOULD BE COMPLETED BY THE
SECOND QUARTER OF THIS YEAR AND ASSURED THAT THE DA WOULD NOTIFY THE
USG AND THE WTO ABOUT THE CHANGES IN THE GUIDELINES.
3. (SBU) THE UNDERSECRETARY SAID THAT THE DRAFT VERSION WAS NOT YET
FINAL AND THAT THE DA CANNOT POSSIBLY NOTIFY THE WTO AND THE USG OR
CONDUCT CONSULTATIONS UNTIL THE RULES ARE COMPLETED, HOWEVER, AT THE
SAME TIME ADMITTED THAT THEY HAVE BEEN CONSULTING WITH DOMESTIC
STAKEHOLDERS. HE FURTHER REITERATED THAT THE USG AND THE WTO WOULD
BE PROPERLY NOTIFIED AND CONSULTED BETWEEN SIGNING AND
IMPLEMENTATION OF THE NEW GUIDELINES. HOWEVER, HE DID SAY THAT HE
WOULD NEED TO CHECK FIRST WITH SECRETARY YAP. HE ALSO ENCOURAGED
THE USG TO WRITE A LETTER TO SECRETARY YAP ABOUT ITS CONCERNS.
4. (SBU) EHLERS ASKED ABOUT A SUPPOSED ORDER TO SUSPEND THE ISSUANCE
OF MAV LICENSES, EFFECTIVE APRIL 1, 2008. USEC. FONDEVILLA DID NOT
CONFIRM OR DENY THIS, BUT SAID THAT HE WOULD LOOK INTO IT. ECON
STAFF SUGGESTED THE POSSIBILITY OF A TIFA VIDEO CONFERENCE WITH
USDA, USTR AND DA REPRESENTATIVES TO LOOK MORE CLOSELY AT THE REVIEW
PROCESS AND TO COMPARE NOTES.
5. (SBU) ON APRIL 3, EHLERS AND ECONOFF INFORMALLY RAISED THE MAV
ISSUE WITH STI SENIOR UNDERSECRETARY TOM AQUINO WHO WAS AWARE OF US
CONCERNS AND SAID HE WOULD FOLLOW UP WITH DEPARTMENT OF AGRICULTURE
ABOUT THE NOTIFICATIONS.
6. (SBU) COMMENTS: ACCORDING TO TRADE CONTACTS, THE DA HAS STOPPED
ISSUING MAV CERTIFICATES TO REGULAR LICENSEES EFFECTIVE APRIL 1
PENDING THE COMPLETION OF NEW RULES. THIS HAS ALSO BEEN CONFIRMED
BY CONTACTS AT THE DA'S MAV SECRETARIAT OFFICE. LOCAL TRADE GROUPS
ARE VEHEMENTLY PROTESTING THE LATEST DA MOVE AND HAVE EVEN
THREATENED TO TAKE THE DA TO COURT ON THESE CHANGES. THE LATEST
SUSPENSION IN THE ISSUANCE OF MAV CERTIFICATES IS HIGHLY TRADE
DISRUPTIVE AND IS CAUSING ANXIETY TO BOTH U.S. INDUSTRY AND LOCAL
TRADERS ABOUT THE UNCERTAINTY OF THE SITUATION AND THE INCREASED
COST OF BRINGING IN THE PRODUCTS OUTSIDE THE MAV (I.E., OUT-OF-QUOTA
TARIFFS AND SPECIAL SAFEGUARDS). IN EFFECT, WITH THIS LATEST MOVE,
THE DA HAS ALREADY BEGUN IMPLEMENTING MAV CHANGES WITHOUT PROPER
NOTIFICATION AND CONSULTATION WITH TRADING PARTNERS. IN 2007, THE
UNITED STATES EXPORTED ABOUT $20 MILLION OF POULTRY MEAT AND $14
MILLION WORTH OF PORK PRODUCTS TO THE PHILIPPINES. IT IS
RECOMMENDED THAT FAS WORK CLOSELY WITH USTR TO DRAFT THIS LETTER TO
THE DA AND TO PUSH FOR THE IMMEDIATE RESUMPTION OF TRADE UNDER THE
OLD MAV REGIME PENDING THE COMPLETION, NOTIFICATION AND
IMPLEMENTATION OF THE NEW GUIDELINES.
KARL EHLERS OF USTR HAS CLEARED THIS MESSAGE.
KENNEY