What does the Special 301 really reveal?

This week the United States Trade Representative (USTR) released the annual Special 301 Report. For those of you who are not aware of this report, it assesses the standard to which America’s international trading partners “uphold intellectual property rights protection and enforcement”. Of the ninety five countries assessed, forty one have then been put into the report itself. The report consists of  a series of watch lists, of countries that to a greater or lesser degree fail to meet the standards desired by the USTR.

How effective an indicator of intellectual property rights protection does this survey really offer? The situation in most countries is unlikely to be as black and white as it comes across in a report of this nature. To take the report’s treatment of Canada as an example, the USTR praises “important developments” in Canada’s IPR policies, yet keeps Canada on its basic level watch list due to “heightened utility requirements for patents that Canadian courts have been adopting recently”.  What would Canada have to do to get off the list? The degree of submission to USTR instructions necessary to leave the watchlist is illustrated by Spain, which has imposed highly controversial and unpopular regulations on its citizens in order to get delisted.

Perhaps the best way to understand what this report has to offer is through the understanding that the USTR, while wearing an official, government hat, actually represents the interests of a very specific group of American companies. Many of the report’s observations highlight not the state of the countries being discussed but the fear which those companies represented by the USTR have of rival economies there. In many ways, the Special 301 report is actually illustrative of a conflict within the USA itself. Economies such as Ukraine — newly vilified in this year’s report — are popular destinations for outsourcing from the USA, powering the disruptive American businesses challenging the dominance of the companies which grew huge in the last century.

There’s no doubt that being listed in the Special 301 report is a diplomatic issue. One has to wonder how appropriate it is to the new meshed economy, though.

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