sean at podiumThe 2015 Special 301 Report continues a trend, beginning last year, of scrubbing a lot of language that long graced previous reports threatening other countries about WTO TRIPS and other international treaty violations. (See Special 301, A Historical Primer). This could be seen as an acknowledgment that such threats violate the World Trade Organization dispute settlement understanding. The WTO clearly states:

“Members shall not make a determination to the effect that a violation has occurred . . . except through recourse to . . . this understanding.”[1]

It should also be noted, however, that threatening Special 301 sanctions for so called “TRIPS-plus” standards not directly covered by the WTO also violate the WTO. The U.S. cannot threaten revoking general system of preferences benefits for TRIPs-plus demands because such criteria would not meet the standard of the WTO EC Tariffs case. That case clarified that GSP criteria must to be tailored to the needs of developing countries, and held that such needs may not be “based merely on an assertion to that effect by . . . a preference-granting country.” Rather, the basis for GSP criteria must be an “objective . . . [b]road-based recognition of a particular need,” such as those “set out in the WTO Agreement or in multilateral instruments adopted by international organizations.”[5]

This holding puts the 301 program into a legal Catch 22. USTR can’t unilaterally adjudicate TRIPS. But it also can’t unilaterally withhold GSP benefits for IP standards not contained in TRIPS or some equivalent multilateral instrument, which by definition TRIPS-plus standards are not.

At bottom, the Special 301 list is just that — a list. All bark and no bite.