Gazeta Mercantil (Notebook A - Page 6), 05/04/2005

Washington, April 5, 2005 - The United States yesterday announced the postponement, until September, of its decision on whether or not to derive tariff benefits from Brazil valued at millions of dollars because of the piracy of American products made in that country.

"The extension of the review is the result of some initial positive steps taken by the Brazilian government, in addition to consultations by the Office of Foreign Trade (USTR, in English) with copyright owners," the office said in a statement.

The United States classified as "a promising change" the measures taken by Brazil since September to combat the illegal copying of computer programs, films, CDs and books, among other articles. As they said, "a new phase of greater cooperation with the private sector" is now beginning.

In 2003, 14% of Brazilian exports to the United States, valued at US $ 2,5 billion, entered the country without paying tariffs, which is why the decision to suspend all or part of these benefits in the so-called General System of Tariff Preferences (GSP) it would have been a serious blow to the Brazilian industry.

Among the products that take advantage of this system are vehicle parts - part of them made by American companies in Brazil -, copper and wooden articles, as well as rocks and other types of stones.

Although the tone of the statement was positive, the USTR said that so far the measures adopted by Brazil “have been insufficient to significantly increase the number of trials and convictions for copyright violations, which is a key element in reducing levels of piracy successfully ”.

In 2004, American companies lost nearly $ 932 million due to illegal copying of their products, 24,5 million more than in the previous year, according to the International Intellectual Property Alliance, which is the association that asked in 2001 for the opening of the USTR lawsuit against Brazil.

The alliance pointed out in a recent report that Brasília continues to lack “adequate and efficient protection for the United States' copyright, as required by the GSP program”. However, the USTR statement adopted a more encouraging tone.

The USTR took note of the police actions that Brazil carried out against piracy, which resulted in a record 2004 seizure of 1,2 million computer programs and games, according to the Brazilian Software Association last month.

The USA also pointed out that the National Council for the Defense of Intellectual Property and Combating Piracy in Brazil, which includes representatives of American companies, adopted on March 17 a National Action Plan to combat this problem. "The review was formally extended until September 30, 2005 to allow time for the National Action Plan to start taking effect," said the statement. The USTR said it expects Brazil to increase its trials against offenders in the coming months.

To avoid US sanctions, government and business representatives from Brazil have met in Washington in recent months with senior officials from that Office.

On March 8, Clodoaldo Hugueney, undersecretary general for Economic Affairs of the Ministry of Foreign Affairs of Brazil, met with the US Interim Representative for Foreign Trade, Peter Allegeier.

This week the president of the Federation of Industries of the State of São Paulo (Fiesp), Paulo Skaf, said that piracy is also a problem for Brazilian companies and that his country is determined to fight it.

The postponement was the way found by the USTR to serve US companies that require greater oversight over Brazil and, at the same time, keep the country within the SGP. International trade analysts estimate that the system is the only legal way the United States has to pressure Brazil with regard to combating piracy. Another problem would also be North American companies with Brazilian branches and that use SGP to export to the headquarters.

Americans praise decision

Defenders of Property Rights yesterday praised the USTR's decision to postpone a final decision on Brazil's preferential trade status with the United States until September 30, 2005, PRNewswire reported. In January 2001, USTR placed Brazil on Special Observation List 301, where it will remain during the review of the extension of rights.

"The USTR sent a clear signal to Brazil," said Nancie Marzulla, president of the Defenders. “Brazil must see this as an opportunity to correct its practices. They are by no means free from the consequences. ”

kicker: Deadline extension is the result of some positive initial steps taken by the Brazilian government