In the News

• In a new letter, select Democrats on the Senate Foreign Relations Committee — including Chairman Bob Menendez (D-NJ) — urged Secretary of State Antony Blinken and Secretary of Energy Jennifer Granholm to bring Mexico into compliance with the United States-Mexico-Canada Agreement’s (USMCA) energy obligations. (Senate Foreign Relations Committee, 1/19)
• Walter G. Copan and Andrei Iancu — current senior advisers (non-resident) at the Center for Strategic and International Studies and former Commerce Department appointees — published a white paper on U.S. global competitiveness. They argued that lawmakers are sabotaging America’s innovation race with China by weakening U.S. intellectual property protections. (CSIS, 1/19)
• Senate Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) called on the Biden administration to use enforcement tools to realize the full potential of the U.S.-Mexico-Canada Agreement (USMCA) in a bipartisan letter to U.S. Trade Representative Katherine Tai. (Senate Finance Committee, 1/12)
• India agreed to allow U.S. pork imports into the country, lifting a barrier to U.S. agricultural trade that spanned two decades. (Reuters, 1/10)
• The United States prevailed over Canada in the first-ever dispute settlement panel proceeding brought under USMCA (check out AFTE’s statement on the case here). The proceeding found that Canada violated its USMCA commitments by applying preferential duty rates to Canadian dairy products, thereby disadvantaging U.S. exporters. Canada’s government must challenge or comply with USTR’s remedies by February 3rd. (Bloomberg, 1/4)

Alliance Announcements

• January 29th marked the two-year anniversary of the United States-Mexico-Canada Agreement being signed into law. In response, the Alliance for Trade Enforcement created a USMCA Enforcement Report Card to evaluate Mexico and Canada’s efforts to implement the trilateral agreement and remove trade barriers. You can view AFTE’s full evaluation here.
• On January 31, AFTE submitted comments to inform the United States Trade Representative’s 2022 Special 301 Report, which evaluates the global state of intellectual property rights protection and enforcement across all industries. This year, AFTE identified nonexistent or inadequate IP enforcement mechanisms in Brazil, Canada, India, Indonesia, Japan, Korea, Mexico, and South Africa as being problematic. You can read a press release announcing AFTE’s submission here and view the full comments here.

Spotlight on Enforcement

Indonesia’s patent regime continues to challenge U.S. biopharmaceutical innovators. And recent compulsory licensing activity has further compromised the certainty and predictability necessary for biopharmaceutical innovators to 1) compete successfully and 2) accelerate the launch of new medicines in the region.

Compulsory licensing refers to governments allowing domestic firms to use a patent — whether on a medicine, a software program, or any other product — without the patent holder’s consent. While The Agreement on Trade-Related Aspects of Intellectual Property Rights allows countries to issue compulsory licenses in limited circumstances, including national emergencies, obligations protecting the legitimate interests of patent holders remain.

Unfortunately, Indonesia seems to be using compulsory licenses as a means to impermissibly implement industrial policy. Indonesia’s compulsory licensing regulations are not aligned with global norms and best practices. For example, in 2020, Indonesia issued a new regulation on compulsory licensing, which was not only published without consulting stakeholders, but also contained broad and vague language facilitating the use of compulsory licenses. More recently, Indonesia has issued compulsory licenses for antiviral Covid-19 therapeutics. For one of these antiviral therapeutics, Indonesia issued a compulsory license despite entering into a voluntary licensing agreement with the right holder. More generally, Indonesia’s Patent Law continues to contain provisions authorizing compulsory licensing on vague and arbitrary grounds.

Indonesia’s lax compulsory licensing provisions make it more difficult for the United States to trade with the island nation, thereby jeopardizing the $30 billion U.S.-Indonesia economic relationship. That’s why AFTE flagged Indonesia’s burdensome patent and compulsory licensing practices in its comments to inform both USTR’s 2022 National Trade Estimate Report and its 2022 Special 301 Report and urges officials to address these trade abuses as soon as possible.