Sunday, May 5, 2013

Hope and Change and Intellectual Property Rights

How's that hopey, changey thing working out for ya"--Sarah Palin, February 6, 2010
by David Trumbull -- May 5, 2013

On the first of this month the Office of the United States Trade Representative ("USTR") released its annual "Special 301" Report on the adequacy and effectiveness of US trading partners' protection and enforcement of intellectual property rights ("IPR") and market access for persons that rely on IPR protection. With US manufacturers finding it difficult to match foreign competition on price, they increasingly have turned to substantial investments in copyrighted designs, patented processes, and trademarked brands -- in order words, intellectual property -- in order to compete at home and abroad. Therefore, our trading partners' enforcement of intellectual property rights ought to be a high priority for our government, just as it is for America companies that lose billions of dollars annually due to pirated "knock-offs" of their products.

For decades, US participation in the World Trade Organization ("WTO") and in bilateral and regional free trade agreements ("FTAs") has been justified by making a commitment to protecting intellectual property a condition of joining the WTO or the FTA. So how well has this work?

This year's report identifies Ukraine as a "Priority Foreign Country" judged to have inadequate intellectual property laws and that may justly be subjected to US sanctions. Next week Ukraine will celebrate five years as a member of the WTO. For five years Ukraine has enjoyed the benefits of WTO membership, but has failed to live up to its obligation to enforce property rights.

The report also contains a "Priority Watch List" and a "Watch List", containing countries whose intellectual property regimes are deemed of concern. Forty countries are on a list. All but three (Algeria, Turkmenistan, and Uzbekistan) are WTO members. So much for WTO as a tool to make countries crack down on piracy of intellectual property.

On the Watch List are US FTA partners Canada, Colombia, Costa Rica, Dominican Republic, Guatemala, Israel, Mexico, and Peru. The nations of Canada, Mexico, and Peru are also members of the Trans-Pacific Partnership, as is Vietnam, another nation on the Watch List. Other nations on the Watch List are: Barbados, Belarus, Bolivia, Brazil, Bulgaria, Ecuador, Egypt, Finland, Greece, Italy (member of the European Union, with which the U.S. is negotiating an FTA), Jamaica, Kuwait, Lebanon, Paraguay, Philippines, Romania, Tajikistan, Trinidad and Tobago, Turkey, Turkmenistan, Uzbekistan.

The "Priority Watch List" includes Chile. According to the report, "The United States continues to have serious concerns regarding outstanding IPR issues under the United States-Chile Free Trade Agreement." In addition to the U.S.-Chile FTA, which has been in effect since January 1, 2004, Chile is member of the Trans-Pacific Partnership currently negotiating a large regional FTA.

On the Priority Watch List is notorious source of online piracy, Russia. In supporting Russia's bid to join the WTO, President Barack Obama, on November 10, 2011 expressed his hope that, once in the WTO, Russia would change it's outlaw ways, saying:

"From day one of its membership in the WTO, Russia will be required to comply with WTO rules on the protection and enforcement of intellectual property rights, including with respect to key rights relied on by US creative and innovative industries."

Other nations on the Priority Watch List are: Algeria, Argentina, China, India, Indonesia, Pakistan, Thailand, and Venezuela.

[David Trumbull consults to the textile and apparel trade. Contact him by telephone at (617) 237-6008 in Boston or (202) 657-6008 in Washington or send him an email message at]

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