USTR IPR Report 2012 - Some thoughts

The USTR publishes every year an annual review of the state of Intellectual Property Rights (IPRs) protection and enforcement in trading partners around the world popularly known as the Special 301 Report. The Report for 2012 can be found here. While I am not dwelling into many controversial aspects of the country "watch lists" and the like, two sections caught my attention:

1. Implementation of the WTO TRIPS Agreement

2. WTO Dispute Settlement

The report alluded to the state of TRIPs compliance as perceived by the United States today:

"The TRIPS Agreement, one of the most significant achievements of the Uruguay Round, requires all WTO members to provide certain minimum standards of IPR protection and enforcement.  The TRIPS Agreement is the first broadly-subscribed multilateral IPR agreement that is subject to mandatory dispute settlement provisions.

Developed country members were required to implement the TRIPS Agreement fully as of January 1, 1996.  Developing countries were given a transition period for many obligations until January 1, 2000, and in some cases, until January 1, 2005.  Nevertheless, certain members are still in the process of finalizing implementing legislation, and many are still engaged in establishing adequate and effective IPR enforcement mechanisms. 

Recognizing the particular challenges faced by least-developed countries (LDCs), in 2005 the United States worked closely with them and other WTO members to extend the implementation date for these countries from January 2006 to July 2013.  The LDC members in turn pledged to preserve the progress that some have already made toward TRIPS Agreement implementation. Additionally, the LDC members have until 2016 to implement their TRIPS Agreement obligations for patent and data protection for pharmaceutical products, as proposed by the United States at the Doha Ministerial Conference of the WTO.  

In December 2011, WTO Ministers decided to invite the TRIPS Council to give full consideration to a duly motivated request from LDC members for an extension of the TRIPS Agreement transition period.  The U.S. supports this decision and looks forward to continuing to work with LDCs and other WTO members in this regard.     

The United States participates actively in the WTO TRIPS Council’s scheduled reviews of WTO members’ implementation of the TRIPS Agreement and also uses the WTO’s Trade Policy Review mechanism to pose questions and seek constructive engagement on issues related to TRIPS Agreement implementation.  Furthermore, the United States continues to work with other WTO members to encourage a discussion within the WTO TRIPS Council on implementation of the enforcement-related provisions of the TRIPS Agreement.  The United States hopes that the TRIPS Council can generate a useful sharing of experiences related to IPR enforcement to ensure effective implementation of enforcement obligations."

On the Dispute Settlement mechanism it referred to specific cases it had brought against China and EU and had this to say:

" The United States will continue pursuing the resolution of WTO-related disputes announced in previous Special 301 reviews and determinations.  The most efficient and preferred manner of resolving concerns is through bilateral dialogue.  Where these efforts are unsuccessful, the United States will not hesitate to use the dispute settlement procedures, as appropriate."

The reliance on WTO dispute settlement procedures to further one's domestic national interests is portrayed in the Report which is a sharp contrast to some voices in the US to abandon the WTO process after the adverse rulings of the Panel/AB in COOL, Cloves Cigarettes and Tuna cases. It is evident from the para relating to implementation of the TRIPS that the US actively engages the multilateral trade rules to further its national interests. It is often argued that the WTO and multilateral trade rules are a hindrance to national sovereignty. However, it is worthwhile to analyse how one can engage with the multilateral system in its various fora (including Dispute resolution) to further one's legitimate trade interests. While every dispute settlement need not be viewed as a trade war, developing countries should develop the capacity to effectively engage with the dispute settlement process to protect what they perceive as domestic interests be it producers, consumers or the economy as a whole.Engaging with the WTO can be done at two levels - one, using the existing provisions (exceptions) to further one's domestic policies and two, seeking remedies under the Agreements to ensure market access and unfair restrictions on trade are not imposed. However the engagement comes at a cost - and that is one needs to accept the multilateral trading system as a rule based, fair system as well as being a credible player in terms of compliance and action. With domestic compulsions and realities these are tough tightrope walks - but globalised governance and its impact was never going to be a simple cakewalk.