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 Government of Paraguay, in coordination with industry, seized and destroyed two multi-million dollar pirate CD factories and made several important reforms to its legal regime for the protection of intellectual property. However, Paraguay continues to be a regional center for piracy, especially of optical media, as well as for counterfeiting, and continues to serve as a transshipment point for an alarming volume of infringing products from Asia to the larger markets bordering Paraguay, particularly Brazil. In addition, Paraguay has failed to implement its obligation under the WTO TRIPS Agreement and the bilateral MOU to enact a modern patent law, among other reforms. Of particular concern are growing indications that the current Paraguayan Administration no longer attaches high priority to the protection of intellectual property rights and implementation of its international obligations in this area. Failure to aggressively prosecute known pirates, such as one high-profile case in which a pirate was twice released on bail despite substantial evidence, is a worrisome sign that further progress toward correcting Paraguay's role as a haven for piracy and counterfeiting is threatened. Therefore, the United States has requested consultations under the MOU which will be held in the coming months. If further results are not forthcoming, the United States may consider other options for resolving concerns regarding protection for intellectual property in Paraguay.


 * Argentina's patent regime denies adequate and effective protection to U.S. right holders. USTR initiated WTO dispute settlement proceedings in April 1999 to address concerns in this area. Today Ambassador Barshefsky announced initiation of a second WTO dispute settlement case to address additional concerns that have arisen as a result of Argentina's failure to implement obligations that came due on January 1, 2000. Argentina's level of intellectual property protection, including for pharmaceutical and agricultural chemicals, has steadily deteriorated over the past two years. Argentina's regime fails to comply with the obligations set forth in the WTO TRIPS Agreement, not only those obligations that came into force most recently on January 1, 2000 but also those obligations that have been in effect since January 1, 1996. Overall, Argentina's patent law fails to grant exclusive marketing rights as required by the TRIPS Agreement for pharmaceuticals and fails to protect confidential test data submitted to government regulatory authorities for pharmaceuticals and agricultural chemicals. Other deficiencies in Argentina's patent law include – among other things – the denial of certain exclusive rights for patents, such as the protection of products produced by patented processes and the right of importation; the failure to provide prompt and effective provisional measures for purposes of preventing infringements of patent rights from occurring; and the improper exclusion of micro-organisms from patentability. The United States continues to urge the Argentine Government to bring its intellectual property regime into compliance with its WTO obligations. We also look forward to implementation of full patent protection in Argentina in November of this year. In contrast to the lack of protection in other areas, Argentina's copyright regime has continued to improve over the past two years with Argentina's enactment of legislation in 1999 to ratify the WIPO Copyright Treaty and Performance and Phonograms Treaty. Regrettably, enforcement against copyright piracy and trademark counterfeiting remains significantly below