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Wednesday, July 25, 2012

The Proposed Anti-Counterfeiting Trade Agreement: Background and Key Issues

Shayerah Ilias
Analyst in International Trade and Finance

The proposed Anti-Counterfeiting Trade Agreement (ACTA) is a new agreement for combating intellectual property rights (IPR) infringement. The ACTA negotiation concluded in October 2010, nearly three years after it began, and negotiating parties released a final text of the agreement in May 2011. Negotiated by the United States, Australia, Canada, the European Union and its 27 member states, Japan, South Korea, Mexico, Morocco, New Zealand, Singapore, and Switzerland, the ACTA is intended to build on the IPR protection and enforcement obligations set forth in the 1995 World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). It also is intended to address emerging IPR issues believed to be not addressed adequately in the TRIPS Agreement, such as IPR infringement in the digital environment. The ACTA, which was negotiated outside of the WTO, focuses primarily on trademark and copyright enforcement. It establishes a legal framework for IPR enforcement, which contains provisions on civil enforcement, border measures, criminal enforcement in cases of willful trademark counterfeiting or copyright piracy on a commercial scale, and enforcement in the digital environment for infringement of copyrights or related rights. It also provides for enhanced enforcement best practices and increased international cooperation.

The ratification (“formal approval”) of the ACTA is in a state of uncertainty, despite the fact that most negotiating parties (Australia, Canada, the EU and 22 of its member states, Japan, South Korea, Mexico, Morocco, New Zealand, Singapore, and the United States) have signed the proposed agreement. Following months of controversy over the ACTA in the EU, on July 4, 2011, the European Parliament voted against the ACTA, meaning that neither the EU nor its individual member states can join the agreement in its current form. The ACTA would enter into force after the sixth instrument of ratification, acceptance, or approval is deposited by ACTA negotiating parties. No party has submitted a formal instrument of approval to date.

The Bush Administration began, and the Obama Administration continued, negotiation of the ACTA as an executive agreement, meaning that the ACTA would not be subject to congressional approval, unless it were to require statutory changes to U.S. law. The U.S. Trade Representative maintains that the ACTA is consistent with existing U.S. law and does not require the enactment of implementing legislation. Congress could play an oversight role in the implementation of the agreement. Some Members and other groups have debated whether implementation of the ACTA without congressional approval would raise constitutionality issues.

The U.S. government has made the enforcement of IPR a top priority in its trade policy, due to the importance of IPR to the U.S. economy and the potentially negative commercial, health and safety, and security consequences associated with counterfeiting and piracy. Policymakers face a challenge of finding an appropriate balance between protecting private rights and promoting broader economic and social welfare. The ACTA negotiation has spurred various policy debates. While governments involved in the negotiation and IPR-based industries have voiced strong support for the ACTA, other groups have expressed concern about the ACTA’s potential impact on trade in legitimate goods, consumer privacy, the free flow of information, and public health. There also have been concerns about the negotiation’s scope, transparency, and inclusiveness. Some have questioned the rationale behind creating a new IPR agreement and have advocated, instead, for better enforcement of existing agreements, such as the WTO TRIPS Agreement.

Date of Report: July 13, 2012
Number of Pages: 27
Order Number: R41107
Price: $29.95

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