Over the past week, I have had several posts on ACTA in the wake of the most recent leaked text, including a scorecard on the major remaining areas of disagreement, one assessing the growing rift between the U.S. and E.U., Canadian positions on ACTA, the changed U.S. position on anti-circumvention rules, and a look at geographical indications , a key issue for the EU. On top of these posts, there is additional information disclosed last weekend that Luc Devigne, the lead EU negotiator is taking on new responsibilities (though the EU says he will continue on ACTA).

Putting the pieces together, I think it may be worth considering whether the EU is prepared to walk away from ACTA altogether, leaving the U.S. with a far smaller agreement that cannot credibly claim to set a standard for the G8 or developed world.

Why raise this possibility?

1. The remarkable comments from European Commissioner Karel de Gucht sent the unmistakable signal that the EU is prepared to walk away. De Gucht told the European Parliament that without the inclusion of geographical indication and industrial designs, the EU would have to reconsider the benefits of the treaty. Moreover, he pointed the finger at the U.S. for maintaining secrecy on the treaty (which leaked a day later). The USTR acknowledged that the negotiating round did not meet its expectations. While de Gucht’s comments were taken by many as posturing for the negotiations, what if they reflect a sincerely held view that an ACTA without a broad scope of intellectual property is not worth the trouble?

2. De Gucht also poured cold water on the next round of negotiations, assuring the European Parliament that he did not expect significant new developments until September. While there were initial rumours of a Washington meeting next week, it now seems clear that will not happen. In fact, hope for a meeting in August in Washington may also be difficult to pull off given the conflict with European vacations that month. There may be urgency on the U.S. side but it is not matched by the EU.

3. Internal EU pressure against ACTA continues to mount. Over the past week, two Dutch ministers raised transparency concerns with ACTA and the EU Article 29 Working Party expressed concerns with the privacy implications of the draft agreement. Moreover, the European Parliament is inching closer toward enough signatories to pass Written Declaration 12, which would send yet another strong signal about its concerns with ACTA, its impact, and the lack of transparency.

4. Tracing the changing text from the last three rounds (Guadalajara, Wellington, Lucerne) it is clear that the U.S. is doing most of the caving in an effort to rally support for the treaty. The dropping of its three strikes language, the inclusion of de minimis, and the changes to the Internet chapter all reflect changes to language initially proposed by the U.S.

5. Most importantly, there remains the seemingly intractable problem of the scope of ACTA. The EU looks to its robust geographical indications system and sees the area it most wants to protect. The U.S., which is undoubtedly more concerned with protecting music and movies, simply can’t agree to the EU demands (which cover over a dozen provisions) without making changes to its domestic laws. That step would run counter to prior commitments that ACTA would not change domestic U.S. law and would require Congressional approval. The inverse situation arises in the context of anti-camcording rules. The U.S. looks at the anti-camcording and sees the area it most wants to protect. The EU sees an issue that would require going beyond current law that would require national approvals.

Put all of this together and the U.S. may face the choice of a major fight to get ACTA approved in Congress (with the EU on board) or the possibility of ACTA without the EU. For the EU, it faces the prospect of an agreement that does not meet its major needs and for which there is mounting internal dissension or the possibility of walking away. While there is no reason to think a breakdown of the talks is imminent – a deal is presumably still more likely than not – the possibility of an ACTA without the EU must be considered as an increasingly desperate USTR looks to save face on an ACTA largely limited to countries with which it already has a trade agreement in place.