One of the big surprises in this year's USTR Special 301 Report was the decision to keep Canada at the lowest level of priority (the Watch List) rather than elevate it to the Priority Watch List. Indeed, all the political signs pointed to an elevation – all the major U.S. lobby groups recommended it, the USTR conducted a special review of Canadian IP enforcement, and there has been growing criticism of Canadian IP law by U.S. officials. Yet, despite those signals, Canada remains on the Watch List and the U.S. lobby groups are left to criticize the USTR. Immediately following its release, the MPAA registered specific disappointment with the USTR decision on Canada, while the RIAA also responded that it had proposed elevating Canada to the priority watch list.
Why the change of heart? While it would be nice to think that perhaps the U.S. is recognizing the Canada is already compliant with its international copyright obligations or that it appreciates the fact that we haven't addressed DRM interoperability (an issue that received specific mention in the report with the warning that interoperability mandates may harm both DRM makers and works locked by DRM), the RIAA hints at the more likely reason. It notes that "we hope that its [Canada's] recent engagement on trying to advance the protection of intellectual property in global markets reflects the government's intention to address these matters at home as well." In other words, joining the WTO IP complaint against China may have bought Canada considerable goodwill on the IP front with the United States.