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  At the conclusion of the 1999 Special 301 review, the United States initiated a WTO dispute settlement case against the EU, based on the apparent TRIPS deficiencies in EU Regulation 2081/92, which governs the protection of geographical indications (GIs) for agricultural products and foodstuffs in the EU. The Regulation denies national treatment to foreign GIs. According to the plain language of the Regulation, only domestic GIs may be protected in the EU. Foreign GIs cannot be registered in the EU, and thus are not eligible for protection, in the EU. In addition, although the Regulation permits EU nationals to oppose or cancel GIs, non-EU nationals are prohibited from raising any objections. With respect to trademarks, the Regulation permits dilution and even cancellation of trademarks when a GI is created later in time. The United States requested consultations regarding this matter on June 1, 1999, and numerous consultations have been held since then. At the most recent consultations, held in February 2001, the EU indicated that it would consider amending certain articles of Regulation 2081/92 by May 2001, in order to bring those articles into compliance with the requirements of the TRIPS Agreement. The United States looks forward to reviewing the adequacy of these amendments, and will consider the next steps of this dispute accordingly.

 The 2000 Special 301 report announced U.S. initiation of a WTO dispute against Brazil over a longstanding issue between the two countries regarding Article 68 of Brazil's patent law, which requires all patent owners to manufacture their patented products in Brazil or else be subject to the compulsory licensing of their patents. This appears to be in violation of TRIPS Article 27.1, which prohibits Members of the WTO from requiring the local production of the patented invention as a condition for enjoying exclusive patent rights. This issue has been unresolved for more than five years, therefore, the United States decided to resort to WTO dispute settlement procedures. Despite numerous consultations, a mutually acceptable resolution could not be reached. On February 1, 2001, a WTO panel was established. Since the establishment of this panel, however, Brazil has asserted that the U.S. case will threaten Brazil's widely-praised anti-AIDS program, and will prevent Brazil from addressing its national health crisis. Nothing could be further from the truth. For example, should Brazil choose to compulsory license anti-retroviral AIDS drugs, it could do so under Article 71 of its patent law, which authorizes compulsory licensing to address a national health emergency, consistent with TRIPS, and which the United States is not challenging. In contrast, Article 68 -- the provision under dispute -- may require the compulsory licensing of any patented product, from bicycles to automobile components to golf clubs. Article 68 is unrelated to health or access to drugs, but instead is discriminating against all imported products in favor of locally produced products. In short, Article 68 is a protectionist measure intended to create jobs for Brazilian nationals.

Potential Dispute Settlement Cases

No new dispute settlement proceedings are being announced at this time. However, the United States is actively considering the initiation of new WTO cases for later this year or early next year against certain WTO Members that appear not to be in compliance with their TRIPS