WASHINGTON – The Office of the United States Trade Representative (USTR) announced today its decision to improve Indonesia’s standing on the Special 301 Watch List after completion of an “Out-of-Cycle” review (OCR).  This review, which was announced last spring, examined in detail the adequacy and effectiveness of intellectual property rights (IPR) protection in Indonesia. 

“We are encouraged by the steps that Indonesia has taken to improve enforcement of intellectual property rights,” said U.S. Trade Representative Susan C. Schwab.  “The United States urges Indonesia to build upon the foundation it has laid to make further progress on the protection of IPR, in order to achieve its objective of attracting high-quality foreign investment and providing more jobs and economic growth opportunities.”

The OCR concluded that throughout 2006, Indonesia bolstered implementation of its regulations designed to stop illegal production of pirated optical discs such as CDs and DVDs by controlling the licensing of factories and conducting raids against pirate optical disc production facilities.  Indonesia’s authorities also conducted numerous raids on retail outlets selling pirated goods.  During this period, the Indonesian Government activated its minister-level National Intellectual Property Task Force and its working groups to coordinate IPR enforcement strategy among agencies as well as to conduct public awareness campaigns.  Indonesia also passed a new Customs Law that clarifies the authority for Customs officers to seize goods that infringe on IPR.

While recognizing the progress Indonesia has made, the U.S. Government review also concluded that sustained efforts and continued progress on key IPR issues will be essential to avoid a future return to the Priority Watch List.  In addition, the review noted that Indonesia’s efforts to address other critical IPR issues will be essential to demonstrate that Indonesia is serious in creating and sustaining an effective IPR enforcement regime.  The United States will monitor closely the Indonesian Government’s efforts.

Background

The United States has in recent years worked to deepen cooperation with Indonesia under our bilateral Trade and Investment Framework Agreement (TIFA).  Indonesia had been on the Special 301 Priority Watch List since 2001.  In 2005, the United States conducted an OCR with respect to Indonesia, which resulted in Indonesia’s retention on the Priority Watch List.  In recognition of progress made during the 2005 OCR period, the United States elected to conduct a second consecutive OCR in 2006, which resulted in the decision to lower Indonesia to the Watch List based on improvements in its enforcement of IPR, though additional work remains.  

Pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act (enacted in 1994), under Special 301 provisions, USTR must identify those countries that deny adequate and effective protection for IPR or deny fair and equitable market access for persons that rely on intellectual property protection.  Countries that have the most onerous or egregious acts, policies, or practices and whose acts, policies, or practices have the greatest adverse impact (actual or potential) on relevant U.S. products must be designated as “Priority Foreign Countries.”

USTR created a “Priority Watch List” and a “Watch List” under the Special 301 provisions.   Placement of a trading partner on the Priority Watch List or the Watch List indicates that particular problems exist in that country with respect to IPR protection, enforcement, or market access for persons relying on intellectual property.  Countries placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem areas.