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 international standards of most developed countries. Specifically, we encourage Canada to join the strong international consensus by adopting copyright legislation that provides comprehensive protection to copyrighted works in the digital environment, by outlawing trafficking in devices to circumvent technological protection measures, and by establishing a "notice-and-takedown" system to encourage cooperation by ISPs in combating online infringements. It also is imperative that Canada improve its enforcement system so that it can stop the extensive trade in counterfeit and pirated products, as well as curb the amount of transshipped and transiting goods in Canada. The United States also urges Canada to enact legislation that would provide a stronger border enforcement system by giving its customs officers greater authority to seize products suspected of being pirated or counterfeit. We also encourage greater cooperation between Customs and the Royal Canadian Mounted Police in enforcement matters, and encourage Canada to provide additional resources and training to its customs officers and domestic law enforcement personnel. Canada's border measures continue to be a serious concern for IP owners. With respect to data protection, we recognize that Canada has taken positive steps to improve its data protection regime. The U.S. pharmaceutical industry is concerned about certain aspects of the proposed regulations. The United States will use the out-of-cycle review to monitor Canada's progress in providing an adequate and effective IPR protection regime that is consistent with its international obligations and advanced level of economic development, including improved border enforcement and full implementation of data protection.

CHILE Chile will remain on the Watch List in 2005. We note Chile's efforts to bring its IPR regime into compliance with the TRIPS Agreement and the U.S.-Chile Free Trade Agreement (FTA). Chile's Congress approved in December 2003 legislation intended to bring the country into compliance with a number of TRIPS commitments. Chile still needs significant reforms, however, in a number of areas. Copyright and trademark enforcement must be improved, including the imposition of deterrent penalties. Copyright piracy is still a serious problem in Chile, and the U.S. copyright industry indicates that digital piracy has contributed to a dramatic rise in piracy in Chile. Concerns remain over pending additional copyright legislation introduced in 2004 which, while making some improvements in enforcement mechanisms, appears to fall short of providing deterrent penalties. Regarding protection for pharmaceutical products, we are concerned that Chile has yet to implement effective regimes to protect test data against unfair commercial use, as well as provide coordination between its health authorities and patent office to prevent marketing registrations of patent-infringing products. We hope that these issues will be resolved through Chile's full implementation of the FTA and we will monitor Chile's progress in meeting its commitments.

COLOMBIA Despite Colombia's progress in certain areas toward strengthening its IPR regime, Colombia still needs to make further improvements and therefore will remain on the Watch List for 2005. Colombia is the only Andean country to provide a full five years of data protection for pharmaceuticals. In the copyright context, Colombia has increased criminal penalties for copyright infringement and has established a specialized IPR unit in the Prosecutor General's office. Notwithstanding these improvements, however, high levels of piracy continue to dominate the Colombian market. The U.S. copyright industry estimates its losses in 2004 due to music piracy alone at $51 million in Colombia, and reports that 71 percent of the music sold in