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 Pakistan, Indonesia and most recently Vietnam and the Philippines. An attachment to this release, entitled:, identifies the specific progress made with these and other countries.

Significant progress has occurred in China, which has shut down 39 factories and production facilities producing CD's, CD-ROMs and VCDs since September 1996. Twenty-nine of these facilities were in Guangdong province. More than 250 people have been arrested. Prison terms of up to 15 years have been applied to IPR pirates. However, because of the serious and ongoing nature of substantial IPR piracy in China, it is designated for special "Section 306" status to demonstrate the need for continued improvement and to ensure that enhanced enforcement measures are put in place.

Barshefsky stated, "Monitoring China under Section 306 will put us in a position to move directly to trade sanctions if there is slippage in China's enforcement of its bilateral IPR agreements with the U.S." Section 306 of the Trade Act of 1974 directs the USTR to monitor agreements concluded under Section 301 and, if such monitoring reveals that satisfactory compliance with the agreement is not occurring, authorizes USTR to take appropriate action in an immediate fashion without initiating a new investigation.

A major IPR priority for the United States is full and timely implementation of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights -- also known as the TRIPS Agreement. This Agreement obligates WTO members to provide in their domestic law and to enforce minimum standards for protecting intellectual property.

The U.S. Government is dedicating substantial resources to monitoring compliance by other countries with this important agreement. In the 1996 Special 301 press release, Barshefsky stated: "We will be monitoring carefully as these obligations come into effect and will not hesitate to use the WTO's dispute settlement provisions if necessary to ensure full compliance." In carrying out this statement, the U.S. Government initiated six IPR-related WTO dispute settlement actions in 1996. Three of these actions -- protection of pre-existing sound recordings in Japan, patent term in Portugal and patent "mail-box" in Pakistan were successfully resolved through bilateral negotiations without resorting to establishment of formal WTO dispute resolution panels. Two remain under negotiation -- a discriminatory box office tax in Turkey and discriminatory trademark practices in Indonesia -- and one, a patent "mail-box" problem with India, is now before a WTO panel.

Ambassador Barshefsky takes note of the transition periods in the TRIPS Agreement which defer many TRIPS obligations on developing countries until January 2000. In the past, she has called upon these countries to accelerate implementation of these obligations before 2000. The U.S. is concerned that certain developing countries have not begun the process of reforming their laws and enforcement mechanisms so as to fully implement TRIPS obligations by January 2000. Barshefsky stated: "The five-year transition period is more than adequate for developing countries to prepare for full TRIPS implementation by 2000. I am concerned that many of these countries have not