Thursday, January 31, 2013

Antigua’s WTO-Authorized Retaliation Against U.S. Copyrights

. Thursday, January 31, 2013

Without getting into the details of the case at all, Antigua prevailed in a WTO case against the U.S.  The U.S. has refused to implement the WTO’s ruling.  As a result, Antigua is permitted to implement retaliatory measures.  It has threatened to do so by permitting violations of U.S. copyrights.  There have been a host of reactions to Antigua’s proposed/authorized suspension of these IP protections. 
Some have suggested that the WTO’s approach is absurd, likening “authorized retaliation” to a two-wrongs-make-a-right mentality (see, e.g., here).  First of all, though, cross-retaliation is not rare in the WTO.  Many countries, including the U.S., have resorted to WTO-sanctioned retaliation when they prevailed in a WTO suit and the other party failed to satisfactorily implement the Appellate Body’s ruling.  The U.S. itself has done it before, and will do it again.  In fact, ironically, U.S. negotiators were among those initially pushing for cross-retaliation as a potential avenue for recourse (see here).
In any case, I think the anti-retaliation point of view often doesn’t fully appreciate the role of measured retaliation.  Sure, it seems silly to “allow” one country to breach an international obligation because another has, but at least the conflict can be reasonably contained.  By letting the WTO determine the amount of retaliation that is appropriate (i.e., an economic value commensurate with the economic disruption caused by the offending measure) we are more likely to avoid having a situation where domestic forces end up creating a trade war.  I’d rather have a WTO body determine the appropriate level of retaliation than a bunch of parliamentarians.
Even if you’re on board with the principle of authorized retaliation, you might also critique Antigua’s proposal because it specifically targets IP protection.  Not surprisingly, the Int’l Intellectual Property Alliance is not a fan.  ("We are of the firm view that suspending intellectual property rights is not the right solution, and that state-sanctioned theft is an affront to any society”)  See here.  I think there are a couple arguments to make on this.   First, it has long been argued that maybe IP protection should be separated from trade policy – that is, placed outside the purview of the WTO and trade agreements.  A lot of people opposed the TRIPS agreement on these grounds.  I am sympathetic to these arguments, but don’t see how the U.S. can really take this position now.  It was, after all, the U.S. that fought so hard for IP to be part of the WTO regime in the first place.  Having won that battle, I think it'd be tough to contend that TRIPS obligations are not fair game for retaliation.  
Another argument, however, may carry some more weight.  What if Antigua’s suspension of IP protection for U.S. copyrights violates another one of Antigua’s international commitments?  Commitments outside the context of TRIPS or the WTO.  The opposition party in Antigua seems to be concerned with this (here).  The opposition leader warned that “Antigua & Barbuda has copyright obligations by binding international treaties apart from the WTO.  Among the binding obligations to respect and uphold copyright are those under the World Intellectual Property Organization.”*  That's interesting.  Should it be required that any retaliatory measure chosen be consistent with these non-WTO-obligations?  I.e., should the WTO take this into account when determining whether proposed retaliation is appropriate?
As a side note, it is also worth considering whether this particular form of retaliation is the most useful option for Antigua.  On the one hand, it wants to punish key U.S. industries to encourage compliance with the WTO decision.  On the other hand, it could probably use its victory at the WTO to get some other form of compensation from the U.S.  But, in the end, this calculation should be made by the government of Antigua.  The WTO's authorization makes this possible, and in my view that's a good thing.

*And its not like the opposition leader is some kind of U.S. apologist – it was his Labour party that brought/prosecuted the subject case before the WTO.


Antigua’s WTO-Authorized Retaliation Against U.S. Copyrights

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