To the surprise of absolutely no one, the U.S. has again placed Canada on its Special 301 Priority Watch List , implausibly claiming that Canada’s intellectual property laws are seriously deficient and on par with countries such as China and Russia. The U.S. “analysis” is short and to the point:

Canada remains on the Priority Watch List. The United States continues to urge Canada to implement its previous commitments to improve its legal framework for IPR protection and enforcement. Unfortunately, Canadian efforts in 2010 to enact long-awaited copyright legislation were unsuccessful. The United States encourages Canada to make the enactment of copyright legislation that addresses the challenges of piracy over the Internet, including by fully implementing the WIPO Internet Treaties, a priority for its new government. The United States encourages Canada to provide for deterrent-level sentences to be imposed for IPR violations, as well as to strengthen enforcement efforts, including at the border. Canada should provide its Customs officials with ex officio authority to effectively stop the transit of counterfeit and pirated products through its territory. U.S. stakeholders have also expressed strong concerns about Canada’s administrative process for reviewing the regulatory approval of pharmaceutical products, as well as limitations in Canada’s trademark regime. The United States appreciates the high level of cooperation between the Canadian and U.S. Governments, and looks forward to continuing engagement on these important issues.

So Canada – a country with intellectual property protections that have been ranked ahead of the U.S., has many copyright rules more restrictive than the U.S., and digital markets growing faster than the U.S. – is once again placed by the U.S. on the watch list while other countries with similar laws are not.

This year’s inclusion is somewhat different, however. The Canadian position on the validity of the list no doubt remains the same as Canadian officials have consistently rejected the entire process as an industry-driven analysis without merit. In fact, according to records I recently obtained under the Access to Information Act, Canadian officials prepared a full defence of Canadian law for submission to the Special 301 process in 2009 but ultimately decided against submitting it.

More telling are the U.S. cables released by Wikileaks that conclusively demonstrate how the entire process is nothing more than a calculated guess at how much pressure can constructively be brought on foreign governments. The placement on the list ultimately says little about the strength of a country’s laws. Rather, it is about the strength of the national government and the likelihood that it will cave to U.S. pressure by inclusion on Special 301.

In 2007, the U.S. embassy in Ottawa concluded:

Despite optimism after the Conservative Party took power in early 2006, Canada’s track record on strengthening IPR protection has remained disappointing. With one notable exception regarding pharmaceutical data protection, the GOC has made no discernable progress towards addressing USG concerns stated in last year’s Special 301 report. These include updating Canada’s out-of-date copyright laws, ratifying and implementing the WIPO Internet Treaties that it signed in 1997, and improving lackluster IPR enforcement. In addition, despite growing awareness that Canada has become a major international source for pirated DVD movies from U.S. studios, the GOC appears disinclined towards criminalizing the act of camcording in theaters. In essence, there have been numerous meetings, numerous Canadian promises, and seemingly no substantive action on the part of the GOC. Therefore, the Embassy recommends that unless there is substantial progress by the GOC in the next few weeks, Canada should be elevated to the Special 301 Priority Watch list.

The advice was rejected – Canadian remained on the Watch List and was not elevated.

A year later, the Embassy again recommended elevation to the Priority Watch List:

We believe that the minority Conservative government is committed to improving the protection and enforcement of intellectual property rights. However, given the GOC’s failure so far to introduce a copyright reform bill in Parliament – and the lack of significant steps to strengthen IPR enforcement and protection on the border – the Embassy reluctantly recommends that Canada be elevated to Special 301 Priority Watch List. We would strongly recommend retaining Canada on the Watch List if the government introduces its copyright bill into the House of Commons before the end of April. (Comment: Elevation of Canada to the Priority Watch List could adversely affect prospects for the introduction and passage of a copyright bill in Parliament. End comment)

Once again, that advice was rejected. In 2009, the Embassy acknowledged progress but still sought inclusion on the list, seemingly suggesting that Canada stay at the Watch list level.

Although there has been no legislative change since last year when Mission Canada recommended that Canada be elevated to the Special 301 Priority Watch List, given Canada’s good faith efforts to address IPR protection, Mission Canada recommends that Canada remain on the Special 301 Watch List.

Instead, the U.S. elevated Canada to the Priority Watch List. In other words, the U.S. Embassy was three for three – each time its recommendations were rejected in Washington, which presumably factored in its own political calculus.

What is left is a “name and shame” approach that brings shame primarily on the U.S. as the bully tactics have little correlation to a factual analysis of the state of Canadian intellectual property protection. The lesson for Canada is clear. With a majority government in power, it should have the strength to address copyright laws in the national interest, even when that means saying no to some U.S. demands. Indeed, the history of the Special 301 list shows that no matter what Canada does, the U.S. will always come back demanding more.