USTR adds Canada, Colombia to Priority Watch List

China featured prominently in the Special 301 Report for the 14th consecutive year.    Countries tabbed by the United States as maintaining the worst intellectual property rights (IPR) regimes should consider concerns outlined in an annual U.S. report on foreign IPR practices released Friday as “grave and urgent,” an official from the Office of the U.S. Trade Representative (USTR) told reporters Friday.
   The 2018 Special 301 Report indicated Canada and Colombia were added to the Priority Watch List, the designation for countries deemed by the United States as posing the greatest IPR-related dangers to U.S. companies engaging in foreign commerce.
   This year’s report downgraded Thailand, included on the Priority Watch List in last year’s report, to the Watch List, which indicates countries posing a less severe threat to U.S. IP owners. The Watch List comprises 23 other countries.
   China continued to feature prominently in the report, being named on the Priority Watch List for the 14th consecutive year, USTR said in a statement.
   “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,” the announcement says.
   China has continued an “overhaul” of its IPR regulatory framework, applying modifications suggested by the United States to draft measures in some cases, the report says.
   But major U.S. concerns have gone “wholly unaddressed,” according to the report.
   “While the particulars vary by the measure in question, new legislation should promote IP protection and enforcement and must not create new, or accept existing, market access obstacles to U.S. persons reliant on IP protection, including in the information and communications technology (ICT), motion picture, television, music, software, video game, and book and journal publishing sectors,” the report says. “Legal reforms are not an end themselves, but must result in improved conditions in China for U.S. IP right holders.”
   USTR is recommending tariffs affecting over $50 billion worth of U.S. imports from China after finding in an investigation pursuant to section 301 of the Trade Act of 1974 that China unfairly forces U.S. companies to transfer their technology to Chinese firms as a condition for doing business in that country.
   Canada was elevated from the Watch List to the Priority Watch List because of “very longstanding frustration” by the United States with “significant” IPR protection and enforcement issues, the USTR official said during a call with reporters.
   The administration hopes Canada improves its IPR regime “by any means they can,” the official said. “We’re not particular, we just want to see things improve.”
   Concerns about Canada’s IPR regime include “poor border enforcement generally” and, in particular, a lack of customs authority to inspect or detain suspected counterfeits or pirated goods shipped through Canada, concerns about IPR protections and procedures for pharmaceuticals, “deficient” copyright protection and “inadequate” transparency and due process on protection of geographical indications, USTR’s announcement says.
   USTR is “seeking strong IP provisions” in the ongoing renegotiation of NAFTA, the agency said in a fact sheet on the 2018 Special 301 Report.