Brazil, US Signed Memorandum On Cotton Dispute 23/04/2010 by Intellectual Property Watch 2 Comments Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)On 20 April, Brazil and the United States signed a memorandum of understanding (MOU) establishing a fund that “will transfer resources to benefit the cotton sector in Brazil,” according to a Brazilian government press release. The MOU is “part of the path forward for the cotton dispute that the United States and Brazil reached earlier this month,” said an Office of the US Trade Representative (USTR) press release ( IPW, IP Burble, 7 April 2010). The US made two other commitments: they “agreed to make some near term modifications to the operation of the GSM-102 Export Credit Guarantee Program [which is an export incentive programme for agricultural products], and to engage with the government of Brazil in technical discussions regarding further operation or the program,” as well as the publication of a proposed rule to recognise the state of Santa Catarina as free of several animal diseases, according to USTR. This is “an essential step for the official recognition that Brazilian meat exports are disease-free,” said the Brazilian release. Others were a claim on US marketing loan and countercyclical payments, and a claim to suspend IP rights obligations under the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the General Agreement on Trade in Services (GATS). Brazil was allowed to take trade countermeasures by a WTO dispute settlement ruling that found US cotton subsidies in non-compliance with international trade rules. The decision gave Brazil the authorisation to suspend its obligations on US goods including IP rights. However, Brazil suspended its countermeasures for the next 60 days during which the US and the Brazilian should continue negotiations. “Brazil believes that the agreement reached between the two governments constitutes positive progress and hopes that the next few steps in the negotiations lead to the full implementation of the WTO rulings,” the country said. Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Related "Brazil, US Signed Memorandum On Cotton Dispute" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
ks says 24/04/2010 at 4:17 pm it’s not clear what the transfer of resources to benefit the Brazilian cotton sector will — or, importantly, can — consist of, since there are strong restrictions in US law against using foreign agricultural assistance in ways that can create competition for US exporters in world markets. If anyone has more news on what the transfer of resources entails and how it will be delivered, please post. Reply
Nuno Pires de Carvalho says 25/04/2010 at 5:39 pm As one leading commentator on international trade law wrote once, applying trade-related sanctions to imported goods is the same as going to the harbor and throw stones at the incoming ships. Yes, indeed trade-related sanctions do not only harm the foreign exporters: they also harm national importers, hence national consumers. That is why the imposition of sanctions in a WTO scenario is a loss-loss situation. However, when it comes to IP, the situation may be different in theory. For a consumer of imported goods, the alleviation of an “IP burden” in the price of the imported good may represent a reduction in prices in the short term. This would be, then, a win-loss situation (a win for the country that imposes sanctions; a loss for the other). However, the real picture is much less clear than that. First, the respect of IP rights of foreigners, even without reciprocity, represents legal security in transactions involving the importation of technology. A country that suspends the patents of foreigners ceases to buy or license those patents: instead, it will buy or license know-how, the certainty of which is highly elusive (hence, those transactions become more costly). Second, IP is entangled with a maize of international agreements as well as regional and national provisions that protect private property rights. Suspending the rights of foreigners may impinge on WIPO Treaties – the suspension of which no WTO panel can approve – and necessarily creates a serious vulnerability as regards acquired rights. Moreover, it is practically impossible to distinguish among the owners of the rights suspended. Indeed, who can ensure that a US patent is owned by US citizens only? Would a patent owned by Pfizer be necessarily affected by the suspension of national treatment? What about the rights of those Brazilian citizens who may be shareholders of Pfizer? The threats of litigation would be enormous and imposing those sort of sanctions might prove counterproductive. As Brazilian lawyers say, a bad deal is always better than a good lawsuit. Reply