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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 appears to deny national treatment to foreign GIs. According to the plain language of the Regulation, only EU GIs may be protected. Foreign GIs cannot be registered in the EU, and thus are not eligible for protection. 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. In March of this year, the EU produced proposed amendments to the Regulation. Although the proposal, as written, would address some of the deficiencies of the Regulation, it is lacking in several significant respects, including its treatment of foreign GIs. We are exploring the possibility of addressing these concerns in order to reach a satisfactory settlement with the EU. If a mutually agreeable solution can not be found, the United States may have no option but to continue to pursue resolution through WTO dispute settlement procedures.



The 2000 Special 301 report announced our initiation of a WTO dispute against Brazil over a longstanding issue between the two countries regarding Article 68(1)(I) 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 discriminating on the basis of "... whether the products are imported or locally produced." The United States continues to question whether such a requirement is consistent with Brazil's obligations under the TRIPS Agreement. In June 2001 the United States and Brazil reached an agreement to transfer our dispute to a newly formed U.S.-Brazil Bilateral Consultative Mechanism. Under the Consultative Mechanism, the United States will receive advance notice from the Government of Brazil should it decide to use Article 68(1)(I). The United States has fully reserved all of its WTO rights in this matter. The establishment of the Consultative Mechanism is a step forward in resolving this dispute with Brazil.

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 obligations.

One area that we continue to monitor closely is the protection of confidential test data. We note, in particular, that we have serious concerns with Hungary's failure to adequately protect confidential test