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Report Underscores Administration’s Trade Priority for Protecting & Enforcing U.S. IP Rights
Washington, D.C. – The Office of the United States Trade Representative (USTR) today released the 2017 “Special 301” Report, reviewing global developments on trade and intellectual property (IP) and identifying trading partners with harmful records on protection, enforcement, or market access for U.S. innovators and creators. The Report calls on U.S. trading partners to address IP-related trade barriers, with a special focus on the countries identified on the Watch List and Priority Watch List.
The 2017 Special 301 Report underscores the Administration’s key trade priority of ensuring that U.S. owners of IP have full and fair opportunity to use and profit from their IP around the globe. The theft of IP has resulted in distorted markets and unfair trade practices that harm American workers, innovators, service providers, and small and large businesses.
The Administration is committed to using all possible sources of leverage to encourage other countries to open their markets to U.S. exports of goods and services and provide adequate and effective protection and enforcement of U.S. IP rights. The Report reflects the Administration’s resolve to aggressively defend Americans from harmful IP-related trade barriers.
According to U.S. Government estimates, in total, IP-intensive industries directly and indirectly support 45.5 million American jobs, about 30 percent of all employment in the United States. By identifying the IP-related trade barriers, the Report helps focus efforts towards protecting and creating U.S. jobs, and promoting free and fair trade that benefits all Americans.
Significant elements of the 2017 Special 301 Report include the following:
- USTR continues to place China on the Priority Watch List. Longstanding and new IP concerns merit attention, including with respect to coercive technology transfer requirements, structural impediments to effective IP enforcement, and widespread infringing activity – including trade secret theft, rampant online piracy and counterfeiting, and high levels of physical pirated and counterfeit exports to markets around the globe.
- India also remains on the Priority Watch List this year for lack of sufficient measurable improvements to its IP framework on longstanding challenges and new issues that have negatively affected U.S. right holders over the past year, particularly with respect to patents, copyrights, trade secrets, and enforcement.
- USTR highlights troubling trends in counterfeiting and piracy. The problem of trademark counterfeiting continues on a global scale and involves the production of and trade in a vast array of fake goods, which harms consumers, legitimate producers, and governments. Digital piracy of U.S. movies, music, books, software and other works presents unique enforcement challenges for right holders in countries around the world. In many of the countries identified in the Report, including our neighbors Canada and Mexico, USTR notes the lack of adequate authority for customs officials to seize and destroy counterfeit and pirated goods at the border.
- The Report also focuses on the negative market access effects of the European Union’s approach to the protection of geographical indications in the EU and third-country markets on U.S. producers and traders, particularly those with prior trademark rights or who rely on the use of common food names.
- USTR closes the Out-of-Cycle reviews for Pakistan and Spain who have both undertaken improvements in recent years. Pakistan has maintained positive momentum in its efforts to reform its IP regime and Spain has strengthened its criminal laws for IP infringement and demonstrated a continued commitment to tackling online piracy. USTR also announces that it will continue Out-of-Cycle reviews for Colombia and Tajikistan, and initiate an Out-of-Cycle review for Kuwait to promote engagement and progress on specific IPR opportunities and challenges identified in this year’s review.
Consistent with its statutory responsibility to develop and coordinate U.S. trade policy, USTR provides the annual Special 301 Report to Congress, in coordination with all relevant U.S. government agencies.
The “Special 301” Report is an annual review of the global state of IP protection and enforcement. USTR conducts this review pursuant to Section 182 of the Trade Act of 1974, as amended. After a review of more than 100 countries, USTR placed thirty-four (34) of them on the Priority Watch List or Watch List. Trading partners on the Priority Watch List present the most significant concerns this year regarding insufficient IP protection or enforcement or actions that otherwise limited market access for persons relying on intellectual property protection. Eleven (11) countries — Algeria, Argentina, Chile, China, India, Indonesia, Kuwait, Russia, Thailand, Ukraine, and Venezuela — are on the Priority Watch List. These countries will be the subject of intense bilateral engagement during the coming year.
Twenty-three (23) trading partners are on the Watch List, and also merit bilateral attention to address underlying IP problems: Barbados, Bolivia, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Greece, Guatemala, Jamaica, Lebanon, Mexico, Pakistan, Peru, Romania, Switzerland, Turkey, Turkmenistan, Uzbekistan, and Vietnam.
USTR also announces that it will launch several Out-of-Cycle Reviews (OCR) to enhance engagement with trading partners and encourage progress on IPR issues of concern. USTR will conduct OCRs of Watch List countries Colombia and Kuwait, as well Tajikistan, which is currently not listed. USTR may conduct additional OCRs of other trading partners as circumstances warrant or as requested by the trading partner.
USTR continued its enhanced approach to public engagement activities in this year’s Special 301 process. USTR requested written submissions from the public through a notice published in the
Federal Register on December 28, 2016. On March 8, 2017, USTR hosted a public hearing that provided the opportunity for interested persons to testify before the interagency Special 301 Subcommittee of the Trade Policy Staff Committee about issues relevant to the review. The hearing featured testimony from witnesses representing foreign governments, industry, academics, and non-governmental organizations. USTR offered a post-hearing comment period during which hearing participants and interested parties could submit additional information in support of, or in response to, hearing testimony and posted on its public website the full transcript of the Special 301 hearing (https://ustr.gov/issue-areas/intellectual-property/special-301/2017-special-301-review).
The December 2016 notice in the Federal Register — and post-hearing comment period — drew submissions from 57 interested parties, including 16 trading partner governments. The submissions that USTR received are available to the public online at www.regulations.gov, docket number USTR-2016-0026.