Brazil May Face Trade Sanctions if IP Negotiations Fail

Responding to testimony by Deputy US Trade Representative Peter Allgeier in the US Congress, intellectual property (IP) lobbyists have called for a tougher stance on intellectual property rights violations in Brazil. The Defenders of Property Rights group has urged that sanctions be considered if ongoing negotiations fail.

The USTR's intellectual property Watch List notes that Brazil is one of the world's largest markets for counterfeit goods, as well as also being one of the largest for legitimate products. The US has only imposed sanctions relating to IP violations on Brazil once in the recent past, in 1997. However, on April 4 the USTR set a six-month deadline for Brazil to reverse intellectual property abuses or lose its favoured trading status with the US.

The warnings of a harsher US line come in the wake of the Brazilian government's threats to break patents on HIV/AIDS drugs manufactured by three US pharmaceuticals firms. Allgeier notes that negotiations with Brazil are usually best advanced "in a cooperative mode with the pharmaceutical companies," and should consider the country's health needs rather than "some longer term commercial calculation on the part of industrial authorities in Brazil."

This statement appears to refer to Brazil's moves to expand production of so-called generics, in an attempt to create a viable and lucrative drug export industry. However, whether the US will take stronger action against Brazil is likely to depend on which patents the government and local firms choose to violate, if any.