In an earlier posting, I mentioned the preliminary WTO ruling on the Brazil-US cotton dispute. In that case, the WTO authorized Brazil to impose retaliatory sanctions ("countermeasures") on services and intellectual property. In other words, Brazil could violate US intellectual property rights with WTO blessing. This followed an earlier WTO ruling that Antigua could use intellectual property rights as a retaliatory sanction in a dispute with the US over Internet gambling.
Monday the WTO issued it's "Decision by the Arbitrator" as to exactly what sanctions Brazil may impose -- and they backed off a bit. The arbitrator awarded Brazil a much lower total amount subject to retaliatory sanctions. Brazil wanted $2.5 billion in sanctions; US said $30million; arbitrator awarded $295 million. (See stories in the Wall Street Journal, the New York Times, and Business Week).
More importantly, the arbitrator did not give Brazil the right to impose countermeasures involving intellectual property rights. This victory, however, should not be taken as an signal that IP is off limits in the trade wars. The arbitrator did not rule that IPR is inappropriate as a sanction. They merely ruled that the size of the damages were not large enough to justify using IPR as a sanction -- that there was no reason to go beyond sanctions on trade in goods.
So the concept of using a "relaxation" of intellectual property rights as countermeasure is still in force. But it is a target of second resort -- to be looked at only when "the suspension of concessions in the goods sector is not practicable or effective."
Monday the WTO issued it's "Decision by the Arbitrator" as to exactly what sanctions Brazil may impose -- and they backed off a bit. The arbitrator awarded Brazil a much lower total amount subject to retaliatory sanctions. Brazil wanted $2.5 billion in sanctions; US said $30million; arbitrator awarded $295 million. (See stories in the Wall Street Journal, the New York Times, and Business Week).
More importantly, the arbitrator did not give Brazil the right to impose countermeasures involving intellectual property rights. This victory, however, should not be taken as an signal that IP is off limits in the trade wars. The arbitrator did not rule that IPR is inappropriate as a sanction. They merely ruled that the size of the damages were not large enough to justify using IPR as a sanction -- that there was no reason to go beyond sanctions on trade in goods.
So the concept of using a "relaxation" of intellectual property rights as countermeasure is still in force. But it is a target of second resort -- to be looked at only when "the suspension of concessions in the goods sector is not practicable or effective."
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