Page:Special 301 Report 1996.pdf/4

 Under the "special 301" provisions of the Trade Act of 1974, as amended, Barshefsky today identified 35 trading partners that deny adequate and effective protection of intellectual property or deny fair and equitable market access to United States persons that rely upon intellectual property protection. She listed an additional 19 trading partners that will require monitoring.

In doing so, Barshefsky designated China as a "priority foreign country" under special 301 because of its failure to implement the 1995 intellectual property enforcement agreement. Economic damage to U.S. industries continues to rise as a result. Although China has made some progress in halting the retail trade in infringing goods, it has failed to stop illegal CD, video and CD-ROM production, to prevent the export of infringing goods, or to honor its promise to grant market access for legitimate audiovisual products. Because intellectual property enforcement problems in China are already the subject of an action under section 301, a new section 301 investigation will not be initiated. China's implementation of the 1995 agreement will remain subject to section 306 monitoring. Trade sanctions for noncompliance could be imposed pursuant to a decision by USTR that China is not satisfactorily implementing the 1995 agreement.

Barshefsky announced placement of eight trading partners on the special 301 "priority watch list." Two of these trading partners -- Argentina and Greece -- will be subject to review during the course of the year to evaluate progress made in the next several months. Other trading partners on the priority watch list include the European Union, India, Indonesia, Japan, Korea, and Turkey.

The USTR also announced placement of 26 trading partners on the special 301 "watch list," and that "out-of-cycle" reviews would be conducted with seven of these trading partners -- El Salvador, Italy, Paraguay, the Philippines, Russia, Saudi Arabia, and Thailand.

Finally, Ambassador Barshefsky noted growing concerns about IPR problems in five trading partners, and highlighted developments and expectations for further progress in 14 trading partners. Barshefsky will subject five of these trading partners, Bolivia, Bulgaria, South Africa, Taiwan, and Hong Kong, to review during the course of the year.

Details of Ambassador Barshefsky's special 301 decisions are provided in the attached Fact Sheet.

Ambassador Barshefsky announced the identification of Germany under the 1988 Omnibus Trade and Competitiveness Act for its failure to adequately implement obligations under the 1993 U.S.-European Union (EU) Memorandum of Understanding (MOU). In making the announcement, Ambassador Barshefsky emphasized that the United States had given Germany