A Brief Comparison of the 2008 and 2010 National Trade Estimate Reports

Lydia Grunstra
April 2, 2010

On March 31, U.S. Trade Representative Ron Kirk presented to Congress the 2010 National Trade Estimate Report on Foreign Trade Barriers (NTE), an annual survey of obstacles to U.S. trade and investment abroad. Section 181 of the Trade Act of 1974 requires the USTR to submit this report annually to the President, the Senate Finance Committee, and various committees in the House.

According to the 2010 NTE foreword:

The statute requires an inventory of the most important foreign barriers affecting U.S. exports of goods and services, foreign direct investment by U.S. persons, and protection of intellectual property rights. Such an inventory facilitates negotiations aimed at reducing or eliminating these barriers. The report also provides a valuable tool in enforcing U.S. trade laws, with the goal of expanding global trade and strengthening the rules-based trading system, which benefits all nations, and U.S. producers and consumers in particular.

The report provides, where feasible, quantitative estimates of the impact of these foreign practices on the value of U.S. exports. Information is also included on some of the actions taken to eliminate foreign trade barriers. Opening markets for American goods and services, either through negotiating trade agreements or through results-oriented enforcement actions, is this Administration’s top trade priority. This report is an important tool for identifying such trade barriers.

This year’s report cites many of the same IP-related concerns raised in the Bush administration’s last NTE (2008), including book, music, software, and movie piracy; unfair commercial use of undisclosed test data for pharmaceutical products submitted for marketing approval; lax IPR enforcement resulting in infrequent seizure of counterfeit or pirated goods; non-deterrent civil and criminal penalties; and, in some cases, failure to ratify the WIPO Internet treaties.

Below is a comparison of how selected countries were treated in the 2008 and 2010 NTEs.

Argentina

The 2010 and 2008 NTE Reports enumerated many of the same concerns about IPR protection in Argentina, including the widespread availability of pirated and counterfeit products; the failure of civil damages to act as a deterrent in IPR enforcement actions; the judiciary’s unwillingness to impose prison sentences in criminal cases; and inadequate protection of pharmaceutical test data submitted for marketing approval. No specific mention was made of Argentina’s IP protection for biotechnology crops, a subject highlighted in the 2008 Report. 

 

Brazil

While the 2010 report praised Brazil for making strides in combating audiovisual piracy, it reiterated many of the USTR’s patent-related concerns spelled out in the 2008 NTE, including nontransparency regarding Brazilian health authority ANVISA’s role in the patent application process, backlogs in Brazil’s patent office, compulsory licenses for HIV/AIDS retrovirals, and unfair commercial use of data submitted for pharmaceutical marketing approval. The report called for increased raids and seizures of pirated materials and increased actions against book and Internet piracy. It also condemned a new inter-ministerial decision (pending implementation) that would deny patents for polymorphs and second-use inventions.

 

Canada

The 2010 NTE reiterates earlier USTR concerns about weak border enforcement, customs officials’ inability to seize suspected counterfeit goods without a court order, weak copyright laws, and failure to implement the WIPO Internet Treaties. While the USTR did not expand on treaty implementation in this report, it did express hopes in the 2008 NTE that the ratifying legislation would utilize a “notice and takedown” rather than “notice and notice” model. 

 

Chile

In addition to ongoing complaints of unfair commercial use of undisclosed test data for pharmaceuticals in Chile, the USTR cited the need for Chile to enact legislation to ratify the 1991 Act of the International Convention for the Protection of New Varieties of Plants as well as the Trademark Law Treaty. The 2010 Report also focused on a recent bill amending Chilean copyright law, where the Chilean Congress had rejected President Bachelet’s proposals regarding secondary liability for ISPs.

 

China

The 2008 NTE, while heavily critical of IPR protection in China, also exhibited some cautious optimism (“Since its accession to the WTO, China has overhauled its legal regime and put in place a comprehensive set of laws and regulations aimed at protecting the IPR of domestic and foreign entities in China”). The 2010 Report is less rosy; it details the following infractions: retail and wholesale counterfeiting; book and journal piracy; end-user piracy of business software; copyright piracy over the internet; procurement preferences for domestic over foreign IP (encouraged by the 2009 National Indigenous Innovation Product Accreditation Work); lax IPR enforcement by officials “apparently motivated by the financial crisis and the need to maintain jobs;” unfair commercial use of undisclosed test data for pharmaceuticals; and marketing approval for unauthorized copies of patented pharmaceutical products.

 

India

In keeping with concerns from previous reports, the USTR criticized India’s copyright piracy of books, software, and optical media; ineffective protection against unfair commercial use of undisclosed test data submitted for marketing approval of pharmaceuticals; and failure to enact legislation to implement the WIPO Internet Treaties. The USTR also criticized India’s weak enforcement regime at the federal level, but noted that state-level enforcement has improved due to “enhanced coordination with industry.”

 

Israel

The USTR’s 2008 and 2010 analyses of Israel’s IPR regime differ radically, thanks to an “understanding” reached by the U.S. and Israel on February 18, 2010 that “resolve[d] several longstanding issues with Israel’s intellectual property rights regime for pharmaceutical products.” The USTR under the previous administration had criticized Israel for unfair use of pharmaceutical test data and for creating bureaucratic hurdles for patent holders seeking patent term extensions.

 

Pakistan

The USTR continued to fault Pakistan for book piracy, weak trademark enforcement, and unfair commercial use of proprietary pharmaceutical test data. It also echoed earlier concerns that Pakistan serves as a conduit for infringing goods from Russia, Malaysia, Singapore, China, Bangladesh, and Sri Lanka. 

In the 2008 NTE, the USTR reported that a large crackdown in 2005 resulted in “a significant decline” in infringing products produced in and exported from Pakistan. However, the 2010 Report notes that, despite “large scale” raids by Pakistan’s Federal Investigation Agency, few prosecutions take place, and when they do, the “insignificant” prison sentences handed down have little deterrent effect on infringers.

Positive comments focused on Pakistan’s draft Plant Breeder’s Rights Law and a proposed amendment to the Seed Act of 1976, which, if passed, would “provide an environment conducive to research and development attractive to both domestic and foreign researchers and plant breeders.”

 

South Africa

The 2010 Report echoed prior USTR concerns about South Africa’s lax enforcement and “slow and cumbersome” court proceedings; commercial photocopying in universities and libraries; software and internet piracy; the proliferation of “burn to order” services; and the unwillingness of local ISPs to shut down infringing sites. 

 

Thailand

The 2010 Report lauded Thailand’s “recent high-level commitment to protect and promote IPR,” as evidenced by several “high profile” seizures of infringing goods, legislation regarding illegal camcording, and landlord liability for sale of counterfeit goods (all cited as sources of concern in the 2008 NTE). Ongoing USTR concerns included lack of progress in addressing piracy and counterfeiting, lack of sustained and coordinated enforcement efforts (especially regarding successful prosecutions for infringement), and failure to protect test data for pharmaceuticals and agricultural chemicals. 

 

Venezuela

The USTR voiced the same concerns in its 2008 and 2010 reports regarding the “deteriorating environment for the protection and enforcement of IPR in Venezuela.”  Topics included: copyright piracy of software, music, and movies; revocation of existing patents on pharmaceutical products; and unfair commercial use of undisclosed test data. One positive note mentioned the public anti-piracy campaigns conducted by SENIAT, Venezuela’s tax and customs authority.

 

The full 2008 and 2010 reports are available on the USTR website at:

 

http://www.ustr.gov/about-us/press-office/reports-and-publications/archives/2008/2008-national-trade-estimate-report-fo-0

http://www.ustr.gov/about-us/press-office/reports-and-publications/2010

 

 

 

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