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The Sound and the Fury of the USTR Special 301 Report

Cite as: Geist, Michael, “The Sound and the Fury of the USTR Special 301 Report,” KEStudies, Vol. 1 (2007).

The Sound and the Fury of the USTR Special 301 Report
Michael Geist
July 2007

The United States Trade Representative’s (USTR) Special 301 report has become a staple on the spring calendar. Toward the end of each April, the USTR issues the annual report card on intellectual property protection around the world. The report, which typically identifies 30 to 40 countries that the U.S. has targeted for legal reform, is at times reminiscent of the classic movie Casablanca, as the USTR rounds up the usual suspects and is shocked to find that their legal rules do not match those adopted in the U.S.

This year the USTR waited until the last day of April to release its report. As expected, China and Russia came in for the heaviest criticism, joined by Argentina, Chile, Egypt, India, Israel, Lebanon, Thailand, Turkey, Ukraine, and Venezuela on the Priority Watch List. A secondary “Watch List” featured another 25 countries including fellow members of the North America Free Trade Agreement, Canada and Mexico.

Inclusion on the Special 301 list invariably generates considerable consternation among the local media. For example, Pakistan, Korea, Lebanon, Kuwait, and Canada all featured prominent stories on the issuance of the report. The Bangkok Post expressed concerns that “the change of status of Thailand in the eyes of the USTR office will add a lot more pressure on the government, which is already struggling to put its economic affairs together.” In the Philippines, a director of intellectual property assured the media that “the objective is still to remove the Philippines from the ordinary watch list. We have a two-year plan for that, but that is secondary to our plan to improve the investment climate of the country through stricter IPR enforcement.”

In fact, even countries not included in report found their exclusion noteworthy. Malta Media News featured a story titled “Malta not included in USA piracy watch list”, which acknowledged that “piracy of copyrighted material is relatively common in the island, with Police often seizing counterfeit CDs, DVDs and videogames among other material.”

Notwithstanding the media hysteria, the report should be kept in proper perspective. First, U.S. dissatisfaction with intellectual property protection typically bears little relation to whether the country actually meets international standards. Indeed, this is by design, as the Special 301 framework was amended in the Uruguay Round Agreements Act to clarify that a country can be found offside on its intellectual property protection even if it is compliant with its international trade and copyright obligations. For example, the U.S. has claimed for years that Canada has neglected to address critical issues and suggested that it is rapidly emerging as a piracy haven, despite the fact that Canada meets its international copyright obligations.

Second, differences between the U.S. economy and the economies of many countries in the report - the U.S. is a major exporter of cultural products and has unsurprisingly, therefore, made stronger copyright protection a core element of its trade strategy, while many other countries are net importers of cultural products – means that U.S.-backed reforms may do more harm than good.

Consider three issues that frequently generate criticism in the Special 301 report: ratification of the World Intellectual Property Organization’s Internet treaties, extension of the term of copyright from life of the author plus 50 years to life plus 70 years, and the introduction of anti-camcording legislation designed to stem movie piracy.

Notwithstanding the pressure on many countries to act on these issues, even one-time U.S. supporters are beginning to admit that these policies are open to doubt. Earlier this year, Bruce Lehman, who served as the Assistant Secretary of Commerce in the Clinton Administration where he was the chief architect of the WIPO Internet treaties, acknowledged that "our Clinton administration policies didn't work out very well." Meanwhile, Marybeth Peters, the U.S. Registrar of Copyrights has noted that the U.S. extension of copyright was a “big mistake,” and the President of the U.S. National Theater Owners Association has advised his members that, regardless of the introduction of anti-camcording laws, unauthorized camcording in the U.S. is on the rise.

Third, not only are the policies suspect, but the USTR report should be seen for what it is: a biased analysis of foreign law supported by a well-orchestrated lobby effort. Since the mid-1990s, the USTR has placed intellectual property protection at the very top of its priority list. As a result, dozens of countries have entered into trade agreements with the U.S. in which they undertake to implement U.S.-style intellectual property protections.

Over the past decade, the U.S. has concluded trade agreements with countries in every corner of the globe, including Australia, Singapore, Morocco, Chile, Jordan, and a handful of Central American countries. The latest example is the free trade agreement between the U.S. and South Korea. As part of that deal, the U.S. demanded that South Korea extend the term of copyright, ratify the WIPO Internet treaties, decrease Korean content requirements, and open Korean broadcast and telecommunications companies to total U.S. ownership.

Even those countries with trade agreements in place - the North American Free Trade Agreement pre-dates the shift in USTR priorities - have not been spared intense U.S. lobbying. For example, in recent months U.S. Ambassador to Canada David Wilkins has publicly called on Canada to introduce copyright reform, characterizing its laws as the weakest in the G7 (conveniently overlooking the fact that the G7 no longer exists and references to the G8, which includes Russia, would not be accurate), while U.S. Senators Dianne Feinstein and John Cornyn have written a public letter to Prime Minister Stephen Harper demanding anti-camcording legislation.

While the USTR report and its supporters seek to paint many countries as laggards on copyright, this rhetoric ignores the fact that many of those same countries are compliant with their international obligations. In fact, of the three highlighted issues (WIPO ratification, copyright extension, and camcording), only three of 192 United Nations members – the U.S., Singapore, and the Czech Republic – have completed all three reforms.

Indeed, once the sound and fury behind the Special 301 report are stripped away, it becomes apparent that few countries respond directly to the U.S. lobby effort, recognizing that no country should be in a rush to become the fourth country on that list. The USTR may dole out many failing grades, but the real failure lies with countries that cave in to such bullying by enacting laws that are not in their national interest.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

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