[Congressional Record Volume 148, Number 22 (Tuesday, March 5, 2002)]
[Senate]
[Pages S1533-S1534]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              WTO DISPUTE

  Mr. DODD. Mr. President, on February 1, 2002, the World Trade 
Organization adopted a report by its Appellate Body that concluded that 
a U.S. law known as Section 211 violates U.S. obligations to protect 
and enforce intellectual property rights under the Agreement on Trade 
Related Aspects of Intellectual Property Rights, TRIPS. The WTO urged 
the United States to take the necessary steps to bring the United 
States into compliance with its international obligations. This 
decision provides Congress with an opportunity--a chance to reaffirm 
our commitment to the protection of intellectual property rights by 
repealing Section 211 in its entirety.
  Section 211 is a special interest provision that was added into the 
FY 1999 Omnibus Appropriations Act at the behest of Bacardi, Ltd., a 
Bermuda-based corporation, just prior to enactment. It was not 
considered in conference, in any committee, or on the floor of either 
House of Congress. This ill-conceived provision triggered the WTO 
complaint against the United States and has undermined U.S. leadership 
in promoting strong protection for intellectual property rights in the 
global marketplace.
  The Appellate Body concluded that key provisions of Section 211 
violate two fundamental principles of WTO rules--national treatment and 
most-favored-nation treatment--which prohibit WTO members from 
discriminating against intellectual property right holders based on 
nationality. For over 100 years, these principles have obligated our 
trading partners to protect U.S. trademark and trade name holders from 
discrimination abroad. The Appellate Body found, however, that Section 
211 violated these longstanding U.S. obligations by imposing obstacles 
on foreign intellectual property right holders that do not exist for 
U.S. and other nationals.
  The United States cannot appeal the Appellate Body's conclusion that 
Section 211 clearly violates WTO rules. Following last week's formal 
adoption of the Appellate Body report by the WTO's Dispute Settlement 
Body, the United States has only a short time to correct its violations 
and come into compliance with WTO rules. If the United States fails to 
do so, it will have to offer compensation or face possible retaliatory 
measures against U.S. intellectual property right holders and other 
trade interests.
  Even more troubling than the threat of retaliation, however, is the 
fact that Section 211 and the Appellate Body decision may serve as a 
model for other countries that wish to make it more difficult for U.S. 
intellectual property holders to protect and enforce their rights 
abroad. While the Appellate Body concluded that Section 211 violates 
national treatment and MFN, it let stand other U.S. arguments that 
suggest that WTO members are free to deny protection to trademark right

[[Page S1534]]

holders on grounds other than those provided in the TRIPS Agreement and 
Paris Convention. In other words, in order to defend Section 211 the 
U.S. argued that TRIPS is limited in its scope. These arguments were 
not only contrary to long-established U.S. international intellectual 
property policy objectives; they could ultimately invite arbitrary 
treatment and abuse of U.S. brand names overseas.
  The only appropriate response to the WTO decision is to repeal 
Section 211 in its entirety. Repealing Section 211 will underscore that 
the United States abides by its international commitments. It will 
safeguard U.S. intellectual property rights in foreign markets, remove 
the threat of retaliation against U.S. exports, and restore U.S. 
leadership in the fight to secure strong protection and enforcement for 
intellectual property rights worldwide.
  I call on the administration to work with the Congress to quickly 
repeal Section 211 in its entirety to restore the U.S. to its rightful 
place as the world's guardian of intellectual property rights.

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