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 although Canada continues to make some limited progress on resolving the outstanding issue of national treatment of U.S. artists in the distribution of proceeds from Canada's private copying levy and its "neighboring rights" regime, it still does not provide full national treatment. In addition, Canada does not provide effective data exclusivity protections, and systematic inadequacies in Canadian administrative and judicial procedures allow entry of infringing generic versions of patented medicines into the marketplace. Further, this is the third consecutive year that Canada's border measures have been the target of severe criticism by IP owners, who consider Canada's border enforcement measures to be inconsistent with its TRIPS obligations.

CHILE

We look forward to seeing Chile implement the provisions of the recently negotiated intellectual property chapter of the U.S.-Chile Free Trade Agreement, which provides high levels of protection of appropriate for the digital age, including non-discriminatory treatment for U.S. software, music, text, and motion pictures. Protections for U.S. patents, trademarks and undisclosed information exceed past trade agreements (e.g. NAFTA and the U.S.-Jordan FTA), and obligate Chile to make its IP laws and enforcement practices conform to the most advanced standards. This is a good agreement for both the United States and Chile. The protection of intellectual property is important for economic development because it promotes the creation of knowledge industries and provides incentives for increased investment. The agreement includes important new protections for Chilean writers, singers, and software developers, specifically ensuring that they will continue to reap the rewards of their creativity in the digital realm. The Agreement also will make Chile an attractive location for clinical trials for pharmaceuticals.

However, to date, Chile's IPR laws are not yet fully TRIPS-consistent. Shortcomings with respect to enforcement remain and we are concerned with Chile's large backlog of pending patent applications. In addition, the United States was very disappointed with the registration of several pharmaceutical products that appear to infringe validly issued Chilean patents. We expect these issues to be resolved through Chile's implementation of the U.S.-Chile FTA and look forward to following Chile's progress with respect to meeting its commitments under this and the TRIPS agreement. Upon full implementation of the U.S. – Chile Free Trade Agreement, we would expect to re-evaluate Chile's status in the Special 301 review.

COLOMBIA

In 2002, Colombia took an important step by passing Decree 2085 to implement fully Article 39.3 of the TRIPS Agreement. The U.S. Government is monitoring implementation of this decree closely in the context of Colombia's ATPA eligibility. Piracy levels in Colombia continue to be high. The home video market is 90 percent pirate, and the U.S. industry is working hard to keep cable piracy from escalating. Pirated sound recordings can be found easily in flea markets and on streets in major cities, and the growth of illegitimate CD-R replication May 1, 2003