Remarks by Deputy Chief of Mission Sheila Gwaltney
at the Intellectual Property Enforcement Cooperation Group Launch
Kyiv, February 28, 2006
I am happy to join you today for the launch of the Enforcement Cooperation Group. The ECG will enhance cooperation between the U.S. Government, the Government of Ukraine, and the international copyright industry. In addition to being a way for Ukraine to ensure that its enforcement efforts are recognized, the ECG will allow for collaboration on plant inspections, forensic analysis, and other important issues. Many of these issues are on today's agenda and will appear on the future agendas for the regular meetings of the group. The launch of this group is a sign of the success of Ukraine's efforts to fix the shortcomings of the past, and a sign of its dedication to protecting intellectual property rights in the future.
I congratulate you on the January 23, 2006 restoration of Ukraine's Generalized System of Preferences (GSP) benefits and improved designation under the Special 301 provisions of U.S. trade law. After five years, Ukraine has now moved from Priority Foreign Country to Priority Watch List. This was the result of the dedicated efforts of the people in this room to improve the protection of intellectual property rights in Ukraine. I know that you are here today because you are deeply committed to continuing to strengthen those efforts. Improving protection of intellectual property rights is a continual process -- even with aggressive enforcement, there is always room for improvement. Pirates always find new ways to cheat the system.
In 2001 the Office of the U.S. Trade Representative designated Ukraine as a Priority Foreign Country as part of the Special 301 review process. At that time, there was significant illegal manufacturing in Ukraine of optical media products, such as CDs and DVDs. Ukraine has come a long way since then. I know many of you have been instrumental in that process. You improved Ukraine's legislation, closed pirate operations, and brought the sale of pirated records and music down considerably from 95 percent of the market in 2000 to 60 percent in 2005. This has reduced losses to the recording and music industry by 170 million U.S. Dollars, according to International Intellectual Property Alliance estimates. By enacting the optical disc amendments passed last July, Ukraine has taken a vital step to combat the illegal production and trade of CDs and DVDs.
Protection of property rights has been an important element of Ukraine's transition to a market economy. Progress on intellectual property rights issues has helped advance Ukraine's WTO accession negotiations. It has also meant a better future for Ukraine's highly accomplished musical talents, and helped develop the local music industry. Ukraine's industry can invest in new business and sign new artists with less concern that only the music thieves will capture all of the sales.
But, as this group acknowledges, the battle is not over. Although there is not now significant pirate production, Ukraine remains a transit country and a market for pirated goods produced elsewhere. Moreover, Ukraine will have to remain vigilant against renewed pirate production. This makes the work of the ECG extremely important.
Thank you again for your hard work and I wish you a productive meeting.