IPTango: Search results for WTO sanctions

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Monday, 30 November 2009

Brazilian Government Tailors a Bill on Trade Sanctions

José Carlos Vaz e Dias November 30, 2009 No comments:

The Brazilian government is under strong internal pressure as the World Trade Organization (WTO) has recently upheld the Brazilian complaint against the United States due to the subsidies granted to cotton producers.

The concern has been the lack of a local law dealing with the applicability of commercial sanctions when Brazil wins complaints in WTO Settlement Disputes. A specific law in this regard has been recognized as of great use, since it will provide the weapons and the criteria to implement the sanctions.

As a result, the government concluded in a rush a draft of proposed law and delivered it to the Parliament on November 23, 2009. In a nutshell, the Bill establishes the weapons that may be used by the government. Among them is the intellectual property rights, which encompasses the suspension of royalty remittances derived from technology transfer and licensing agreement, the grant of compulsory licenses and the importation allowances of drugs and generic drugs still under local patent protection.

To secure the enforcement of the US$350 million in sanctions against the United States, recently issued by the WTO against the subsidies of cotton producers, the government is pressing hard the Parliament for approval of the Bill by Christmas. If Mr Lula feels that it will not get sufficient support in Parliament, he intends to immediately issue a Provisional Measure to make the contents of the Bill immediately enforceable.

For the general knowledge, a Provisional Measure is a type of law coming from an act of the President issued in case of urgency or extreme importance. The publication makes the Provisional Measure immediately effective for a period of 45 days (http://www.v-brazil.com/government/laws/laws.html).

The government is studying the options set by the Bill that may impact the most the American government. The identified preferences of the Brazilian government are as follows: (a) 1st Option – Suspension of intellectual property rights of American companies during the period of the sanction (until the American government phases out the condemned subsidies); (b) 2nd Option – Application of an additional tax or duty to royalty remittances; (c) 3rd Option – Suspension of royalty remittances and (d) 4th Option – Suspension of the internal rule that prohibits parallel importation, thereby allowing the entry of products without the prior and express authorization of the trademark/patent titleholder.

Such IP sanctions will be adopted further to the ‘normal’ commercial sanctions applicable on approximately 220 American products.

The Americans have been reacting against the Bill. They have been alleging that there is no reason for applying the sanctions, since the illegal cotton subsidies will be soon phased out. The Brazilian diplomacy has stated that such promise has been made but not fulfilled since 2005, when the WTO’s condemnation was issued for the first time.

The Bill or Provisional Measure will be posted on IP Tango soon after the final version is disposed to the press.

LIMITATION AND SUSPENSION OF PATENT RIGHTS: BRAZIL’S CROSS RETALIATION IS SET TO START. WILL THE GOVERNMENT REALLY APPLY THEM?

José Carlos Vaz e Dias February 17, 2010 No comments:

As announced earlier by IP Tango (see its contents here), the Brazilian government took a serious step forward to apply trade barriers against American products in the amount of US$ 560 million and to further impose US$ 270 million retaliatory sanctions on services and intellectual property rights, as the WTO condemned US subsidies to cotton producers.

Firstly, CAMEX (Câmara do Comércio Exterior – the Brazilian Board Trade) approved on February 9 an updated list of 220 American products that will suffer tariff increase of up 100% of the value when imported into Brazil.

One day after, the President Mr. Lula da Silva signed provisional measure or int erim measure 482 of February 10, 2010 (see full text in Portuguese https://www.planalto.gov.br/ccivil_03/_Ato2007-2010/2010/Mpv/482.htm ) allowing the suspension and limitation of IP rights of citizens or companies domiciled in countries that violate WTO’s trade rules. Such interim measure comprised the following weapons: (a) suspension and limitation of IP rights; (b) alteration of the rules and procedures that secure IP protection, mainly provided by the Brazilian Patent Office and the Ministry of Agricultural for plant variety; (c) alteration of the measures to apply the IP rights; (d) temporary prohibition of royalty remittances from licensing and technology transfer and (e) additional tax application to remuneration of IP owners.

Interim measure 482/2010 has been in force since February 11 and it needs to be reinforced by the Brazilian Parliament during the next 45 days. (see earlier IP Tango information here).

Despite the victory at the WTO, the Brazilian authorities seem to be driven by caution or, maybe, fear. You may choose the adequate feeling, but please bear the following facts. The day after interim measure 482/2010 was published, the government delivered a statement informing that the final list of retaliation products will be published on March 1, since the “list needs to pass through technical adjustments”, as informed by CAMEX’s Executive Secretary Mrs. Lytha Spíndola.

Further to that, the local authorities informed that solely patents related to medicines will be affected this time, but the final list of medicines will be delivered by the Health Ministry to CAMEX for publication on March 1.

In my viewpoint, the Brazilian government is being cautious and wise as it wants to gain time to convince the Americans to end up the subsidies. That would decrease the pressure to retaliate the maximum permitted amount: US$ 830 million. The Brazilian diplomacy is working hard in Washington and Brasilia, as one may imagine how unpleasant it is to retaliate a main trade partner.

Brazil will most probably be the first country to apply the cross-retaliation concerning IP rights, despite the fact that the WTO authorized it twice before. The first country to enjoy it was Ecuador against the European Union, but the sanctions were never applied. The second one granted to Antigua against the US, but no signs of sanction.

The government is also concerned about the side effects of the retaliation, which may range from US reaction to cost increase of industrial production. To prevent any side effects, the authorities have eliminated capital goods from the list and agreed to add a greater deal of agricultural goods, as the WTO complaint was on cotton farmers.

As to IP rights, the government has so far deviated from any allegation of illegalities, since interim measure 482/2010 gives the proper mechanisms for limiting and suspending such constitutional rights.

Nevertheless, there are important questions that have not been yet answered: Will the Brazilians be brave enough to apply any of the IP weapons? Will they be wise and sensible to measure the damage? One has to remember that retaliations at WTO are not punitive, bur rather compensatory to the losses from illegal trade practices.

These answers will be surely provided, but we shall need to await March 1, as this date seems to be the deadline set by the Brazilian government against the cotton subsidies.

Brazil gets closer to listing US IP retaliation targets

Jeremy November 18, 2009 No comments:

In "Brazil Issues Retaliation List of US Products; IP-Protected Items In Next Round", Intellectual Property Watch's Clauda Jurberg relates that Brazil has now announced the list of 222 American products that could suffer retaliation with tariff rates of more than 100 percent of the value when imported to Brazil. This list could be followed by another, including potentially hundreds of millions of dollars in non-tariff items related to intellectual property rights such as lower-priced patented pharmaceuticals. The retaliation was authorised by the World Trade Organization following the refusal of the United States to address problems raised by Brazil's complaint about US protection of its cotton crop from competition through foreign imports. According to the article,

"Cross-retaliation (retaliation in a trade area other than the one in violation) is permissible under WTO rules and could be used to lower prices on patented pharmaceuticals. According to the Camex [Câmara do Comércio Exterior -- the Brazilian Board of Trade] executive secretary, the second stage sanctions involving exceptions to patents on drugs and more tariffs in services only will occur after the implementation of the first product tariffs. And a public consultation also will be held. Exceptions to patents such as compulsory licences already are permitted under WTO rules, but could be made easier through WTO sanctions.

The National Institute of Intellectual Property ..., under the Ministry of Development, Industry and Commerce, is awaiting instructions to participate in a discussion on creation of a list of patent exceptions. The technical staff from the institute do not yet have details on retaliation in the area of intellectual property.

On 10 December, there will be a meeting of seven ministries involved with this subject and Camex. During this meeting, they will analyse the public suggestions to list. Of the content of these 222 products, the list includes food, medicine, medical equipment, cotton, appliances, cosmetics, and accessories for vehicles. According the Commerce Ministry, the total value of the list is $2.7 billion, and some products may be excluded".

The 222-item retaliation list can be read here

Earlier IP Tango post here

Brazil takes next step in bid for WTO sanctions against the US

Jeremy August 26, 2008 No comments:

PR-Inside reports that Brazil yesterday formally asked the World Trade Organization for permission to impose up to US$4 billion in annual sanctions against goods and services originating from the US in order to penalize the US for handing out illegal cotton subsidies. This June the US finally lost its appeal in the six-year-old dispute -- the first farming dispute brought by a developing country since the WTO was founded.

Brazil has already warned that it is likely to target US trade marks, patents and commercial services in retaliation. Three years ago Brazil appeared to be considering the communications, construction, engineering, finance, tourism and transport sectors.

Brazil wins WTO award, threatens US IP

Jeremy September 07, 2009 No comments:

The World Trade Organization has upheld Brazil's complaint against the United States regarding the subsidies paid to US cotton farmers (see IP Tango here), which make it difficult for a large number of countries, championed by Brazil, to export their own produce to the world's most valuable market.

The two countries are now in dispute as to the value to Brazil of its victory. According to the Brazilians, this ruling entitles the country to about US$800 million in sanctions against the United States this year, of which US$340 million would be comprised of "cross-retaliation" against US intellectual property or services. The Americans disagree, asserting that the sanctions were worth only around USS$300 million and that Brazil would be unlikely in the near future to retaliate against US intellectual property rights.

Brazil plans to plunder US patents if cotton subsidy is held unlawful

Jeremy June 19, 2008 No comments:

Carlos Caminada (Bloomberg) reports that cotton-grower Brazil is to pursue $4 billion in sanctions against US patents and business services in retaliation against subsidies paid to US cotton farmers in the event that the World Trade Organization (WTO) supports the Brazilian government's proposal. Although it might seem premature, given that no decision has yet been taken, Brazilian officials from several ministries are reportedly already deciding which patent payments to suspend.

Last year the WTO gave Antigua and Barbuda free rein to infringe US IP rights to the value of $21 million after upholding the islands' complaint against US trading policies regarding online casino websites (see here).

Brazil retaliates against the United States IPRs

Patricia Covarrubia February 15, 2010 No comments:

An interim measure was published last Thursday in the Official Gazette which retaliates against the U.S. The interim measure only deals with intellectual property and is effective immediately and must be ratified by Congress to become permanent law.

Last year, the WTO authorized Brazil to strike back against the United States because of subsidies that the U.S. government grants to producers of cotton in that country (see earlier IP tango post here). Brazil, then went on to develop a list of products that may have the import tax adjusted up to 100 per cent (see IP tango here).

With this new measure, Brazil will seek sanctions against intellectual property for an amount of up to $270 millions. So that, in addition to overtax the importation of goods from the US, Brazil may suspend and restrict the rights of intellectual property. The measure lists the possibility of retaliation on literary and artistic works, computer software, industrial design, crops and vegetables, and integrated circuits.