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 recordings and videocassettes, and virtually all audio cassettes sold are pirated copies. Despite having adopted modern copyright legislation that appears largely to be consistent with TRIPS, Brazil simply has not undertaken adequate enforcement actions against increasing rates of piracy. In particular, very few prosecutions and deterrent convictions result from raids. There have been recent efforts to move towards enforcing copyright protection in the tri-border area. We look forward to stepped up enforcement actions by the Brazilian Government in the near term. In addition, we encourage the incoming Brazilian administration to: initiate legislation that strengthens the Brazilian enforcement framework against copyright and trademark infringement; commit resources to a broad enforcement action plan that effectively coordinates the work performed by several federal and state authorities, including the police, customs authorities, tax authorities and the judiciary; and investigate and raid illegal domestic manufacturing sources, distribution channels and key distributors. We also look to Brazil to improve greatly the processing of patent applications in a manner that is consistent with its international obligations. We will continue to monitor Brazil's progress in these areas, including through the ongoing GSP review that was initiated by USTR in 2001.

EUROPEAN UNION

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 registered. With respect to trademarks, the regulation permits dilution and even cancellation of trademarks when a GI is created later in time. Our initial WTO consultation request alleged that this regulation denies national treatment to foreign geographical indications, and does not provide sufficient protection to trademarks that are similar or identical to a GI and is, therefore, in violation of the TRIPS Agreement. The United States requested consultations regarding this matter on June 1, 1999, and numerous consultations have been held since then. However, to date, we have not reached a mutually agreeable solution. While the EU has recently issued some amendments to its regulation, these amendments do not address our principal concerns with respect to full national treatment and appropriate protection for trademarks. Finally, lack of full implementation of the EU Biotech Directive by EU member states is also of concern.

INDIA

Indian intellectual property protection continues to be weak. There are some tenuous first signs that the situation may be changing, as witnessed by the passage of long-awaited patent law amendments in May 2002. However, this law still appears to contain several TRIPS inconsistencies. In addition, piracy of copyrighted works remains a problem, particularly popular fiction works and certain textbooks, and protection of foreign trademarks remains difficult. India should adopt immediately amendments to its copyright law fully and correctly May 1, 2003