Washington, DC -- The Office of the United States Trade Representative today released a report updating information on its Section 301 investigation of China’s acts, policies and practices related to technology transfer, intellectual property and innovation.

“We completed this update as part of this Administration’s strengthened monitoring and enforcement effort,” Ambassador Robert Lighthizer said. “This update shows that China has not fundamentally altered its unfair, unreasonable, and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation.”

USTR Releases 2018 Special 301 Report on Intellectual Property Rights

Washington, D.C. – The Office of the United States Trade Representative (USTR) today released the 2018 Special 301 Report, identifying trading partners that do not adequately or effectively protect and enforce intellectual property (IP) rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights. The Report calls on U.S. trading partners to address IP-related challenges with a special focus on the countries identified on the Watch List and Priority Watch List.

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“The ideas and creativity of American entrepreneurs fuel economic growth and employ millions of hardworking Americans,” said U.S. Trade Representative Robert Lighthizer. “This report sends a clear signal to our trading partners that the protection of Americans’ intellectual property rights is a top priority of the Trump Administration.”

According to U.S. Government estimates, IP-intensive industries directly and indirectly support 45.5 million American jobs, about 30 percent of all employment in the United States. This Report draws attention to IP-related trade barriers and the steps foreign countries can take to open their markets to IP-intensive goods—steps that help to protect U.S. jobs, create opportunities for job growth, and promote free and fair trade that benefits all Americans.

Significant elements in the 2018 Special 301 Report include the following:

USTR identified 36 countries on the Priority Watch List or Watch List. Trading partners on the Priority Watch List present the most significant concerns this year regarding inadequate or ineffective IP protection or enforcement or actions that otherwise limit market access for persons relying on IP protection.

USTR identified 12 countries—Algeria, Argentina, Canada, Chile, China, Colombia, India, Indonesia, Kuwait, Russia, Ukraine, and Venezuela—on the Priority Watch List. The IP issues in these countries will be the subject of intense bilateral engagement during the coming year.

China is on the Priority Watch List for the 14th consecutive year. Longstanding and new IP concerns merit increased attention, including China’s coercive technology transfer practices, range of impediments to effective IP enforcement, and widespread infringing activity—including trade secret theft, rampant online piracy, and counterfeit manufacturing.

India also remains on the Priority Watch List this year for longstanding challenges in its IP framework and lack of sufficient measurable improvements, particularly with respect to patents, copyrights, trade secrets, and enforcement, as well as for new issues that have negatively affected U.S. right holders over the past year.

USTR downgrades Canada from the Watch List to the Priority Watch List this year for failing to make progress on overcoming important IP enforcement challenges. Key concerns include poor border enforcement generally and, in particular, lack of customs authority to inspect or detain suspected counterfeit or pirated goods shipped through Canada, concerns about IP protections and procedures related to pharmaceuticals, deficient copyright protection, and inadequate transparency and due process regarding the protection of geographical indications.

USTR downgrades Colombia from the Watch List to the Priority Watch List for its longstanding failure to make meaningful progress in fulfilling obligations under the United States-Colombia Trade Promotion Agreement, such as obligations to amend its copyright law. USTR is also announcing an Out-of-Cycle Review of Colombia to assess its progress in addressing these and other concerns.

USTR also identified 24 trading partners on the Watch List: Barbados, Bolivia, Brazil, Costa Rica, Dominican Republic, Ecuador, Egypt, Greece, Guatemala, Jamaica, Lebanon, Mexico, Pakistan, Peru, Romania, Saudi Arabia, Switzerland, Tajikistan, Thailand, Turkey, Turkmenistan, the United Arab Emirates, Uzbekistan, and Vietnam. IP challenges in these countries also merit increased bilateral engagement in 2018-2019.

USTR places Saudi Arabia and the United Arab Emirates (UAE) on the Watch List. For Saudi Arabia, there are concerns regarding recent deteriorations in IP protection for pharmaceutical products, in addition to outstanding concerns regarding IP enforcement and the continued use of unlicensed software by the government. For the UAE, the placement on the Watch List is in response to longstanding concerns about the sale and transshipment of counterfeit goods and the establishment of collecting management organizations, as well as recent policy changes that may not provide adequate and effective IP protection for pharmaceutical products.

USTR closes the Out-of-Cycle Reviews (OCRs) for Kuwait without a change in status and Tajikistan with a downgrade to the Watch List. Kuwait has not yet brought its copyright regime in line with its international commitments and still needs to make necessary improvements to the regulations implementing its 2016 Copyright and Related Rights Law. Tajikistan failed to address unlicensed software use by government agencies during the OCR. USTR announced that it will initiate OCRs for Colombia, Kuwait, and Malaysia to promote engagement and progress on specific IP opportunities and challenges.

USTR highlights engagement with trading partners to address concerns related to IP protection and enforcement and market access barriers with respect to pharmaceuticals and medical devices so that trading partners contribute their fair share to research and development of new treatments and cures. For a fact sheet on USTR engagement on pharmaceutical and medical device issues, click here.

The Special 301 Report is an annual review of the global state of IP protection and enforcement. USTR conducts the Special 301 review annually pursuant to Section 182 of the Trade Act of 1974, as amended.

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Under Section 301 Action, USTR Releases Proposed Tariff List on Chinese Products

WASHINGTON, DC – As part of the U.S. response to China’s unfair trade practices related to the forced transfer of U.S. technology and intellectual property, the Office of the U.S. Trade Representative (USTR) today published a proposed list of products imported from China that could be subject to additional tariffs.

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Following USTR’s Section 301 investigation, President Trump announced in March that the United States will impose tariffs on approximately $50 billion worth of Chinese imports and take other actions in response to China’s policies that coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises. These policies bolster China’s stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans, such as “Made in China 2025.”

The proposed list of products is based on extensive interagency economic analysis and would target products that benefit from China’s industrial plans while minimizing the impact on the U.S. economy. Sectors subject to the proposed tariffs include industries such as aerospace, information and communication technology, robotics, and machinery.

The proposed list covers approximately 1,300 separate tariff lines and will undergo further review in a public notice and comment process, including a hearing. After completion of this process, USTR will issue a final determination on the products subject to the additional duties.

The total value of imports subject to the tariff increase is commensurate with an economic analysis of the harm caused by China’s unreasonable technology transfer policies to the U.S. economy, as covered by USTR’s Section 301 investigation.

Today’s announcement comes just days after the USTR filed a request for consultations with China at the World Trade Organization (WTO) to address China’s discriminatory technology licensing requirements. Such consultations are the first step in the WTO dispute settlement process. If the United States and China are unable to reach a solution through consultations, the United States may request the establishment of a WTO dispute settlement panel to review the matter.

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