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Cablegate: 2004 Gsp Review Demarche Response

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 BRASILIA 001640

SIPDIS

STATE FOR WHA/BSC, EB/TPP/MTA/IPC SWILSON
STATE PASS TO USTR FOR SCRONIN, LYANG AND BPECK
USDOC FOR 4322/ITA/MAC/WH/OLAC/WBASTIAN/JANDERSEN
USDOC FOR 4322/ITA/MAC/WH/OLAC/DMCDOUGALL/ADRISCOLL
USDOC FOR 3134/USFCS/OIO/EOLSON/DDEVITO
TREASURY FOR OASIA/SEGAL
NCS FOR DEMPSEY

SENSITIVE

E.O. 12958: N/A
TAGS: KIPR ETRD PGOV ECON BR IPR
SUBJECT: 2004 GSP REVIEW DEMARCHE RESPONSE

Ref: State 142089

This cable is Sensitive but Unclassified, please protect
accordingly.

1. (U) Taking advantage of a previously scheduled courtesy
call, Econoff delivered reftel demarche June 29 to the new head
of the Ministry of External Relations' (MRE) Intellectual
Property Division, Otavio Brandelli. Brandelli had no
immediate reaction to news of the 90-day extension or formation
of a working group via the Bilateral Consultative Mechanism,
but told Econoff that a cable to be sent to the Embassy in
Washington was currently awaiting Minister Amorim's approval.
He asked what specific language would be published on June 30
in regard to the GSP review, warning of potentially negative
reactions. In a follow-up phone conversation after the
Minister's approval of the cable, Brandelli explained that the
GoB accepted the proposal for bilateral meetings on the issue,
but not necessarily through the existing Bilateral Consultative
Mechanism. Noting the importance of flexibility, he implied
that less formal, or less cumbersome channels of communication
exist.

2. (SBU) Offering his personal reaction, Brandelli expressed
dismay that private sector dissatisfaction with Brazil's IPR
enforcement could result in retaliatory trade sanctions.
Econoff replied that the objective of the demarche was exactly
to avoid such a situation via a mutually agreed upon plan to be
determined within the 90-day extension of the investigation.
Brandelli cautioned that there could be very negative responses
from the Brazilian Congress, especially as Congress's
Investigatory Commission (the CPI) had just released its final
report. A negative GSP announcement, he said, could be
perceived as a slap in the face by those who worked
cooperatively with the USG and associations of U.S. right
holders to document the significant problem of piracy and
enforcement in Brazil. Brandelli encouraged efforts to de-
politicize the subject.

3. (SBU) He agreed that the Piracy CPI report is a positive
development, especially given its clarification of the damages
sustained by Brazilian music, software, fashion and other
industries. Mentioning Brazil's concerns with geographical
indicators such as cachaca (Brazilian sugar-cane based spirit
supposed being made and marketed in Europe) and capuacu
(Amazonian fruit trademarked in Japan and the U.S.), Brandelli
noted that both Brazil and the U.S. want more effective
enforcement, but need to proceed toward that end in a sensible
manner, taking into account the question of resources.

4. (SBU) Econoff asked about the future of the
Interministerial Committee for Fighting Piracy (CICP), given
the CPI's recommendation that the committee be replaced.
Brandelli noted that the committee continues to function, and
told econoff that Ambassador Clodoaldo Hugueney, MRE Secretary
General for Integration, Economics and Foreign Trade, had met
with the Vice Minister of Justice in May 2004 to initiate
discussion on possible changes to the CICP, exploring options
like moving it from the Justice Minister to the National
Security Agency. Brandelli's personal recommendation is that
the Finance Ministry oversee the CICP.

5. (SBU) Explaining his involvement in the development of the
Brazilian IPR legislation of 1996, Brandelli expressed
disappointment that bilateral problems remain, even after
Brazil made the exceptional effort to produce first class
legislation. Whatever plans are made via a bilateral process,
he said, the GoB would not pass new laws or sign on to new
treaties, insisting that current legislation goes far beyond
TRIPS requirements and is more than sufficient. He asserted
that the July 2003 law (10.695/2003) toughening certain
copyright penalties and improving procedures on destruction of
seized goods is quite far-reaching, although he allowed that
more time is needed to fairly judge its application and
results. He lamented that there seemed to be little
appreciation of the significance of this legislation, implying
that Brazil does not get its due credit when it comes to the
fight against piracy. (Note: The CPI has recommended draft
legislation that goes beyond the 2003 law on minimum penalties
as well as procedures for making indictments and
storage/analysis of seized goods.)

DUDDY

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