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 Indonesia will remain on the watch list. It has indicated that it will liberalize access for U.S. motion picture companies and has made other improvements to its intellectual property regime.

New Zealand ministers announced in December 1991 that they intended to introduce legislation to repeal the compulsory licensing provisions of the patent law.

"We welcome these efforts and look forward to removing New Zealand from the watch list when such legislation is enacted," Hills said.

The U.S. is increasingly concerned about Spain's protection of trademarks and copyrights, according to Hills. While Spain remains on the watch list, recent developments in the enforcement area, such as the NIKE case, will be closely monitored.

Finally, Hills said that while none of the republics formerly part of the Soviet Union or Yugoslavia were placed on any of the special 301 lists this year, the U.S. will monitor developments in the successor states and seek to negotiate bilateral intellectual property agreements with each of them as soon as possible.

Title VII of the 1988 Trade Act directs the Administration to identify in an annual report to Congress foreign countries that are discriminating, as defined by the statute, against U.S. goods or services in their government procurement practices.

The U.S. continued the identification of Norway under Title VII as a country in apparent violation of its GATT Government Procurement Code obligations.

Norway was first identified in 1991 for excluding U.S. and other foreign suppliers from competing for a contract on an electronic toll booth collection system. As required under Title VII, USTR requested consultations with Norway. When these consultations did not prove successful in addressing U.S. concerns within the 60-day period specified by the statute, the U.S. initiated formal dispute settlement proceedings, which are expected to conclude in the near future.

In last year's Title VII review, the U.S. committed to conducting an "early review" of the EC, France, Germany and Italy. This review was completed in February 1992 and, on February 21, President Bush identified the EC for the discriminatory provisions of its "Utilities Directive," which is scheduled to come into effect by January 1, 1993. At the