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 * Paraguay was identified a Priority Foreign Country on January 16, 1998, as a result of an out-of-cycle review called for in the 1997 Special 301 announcement. In making this decision, Ambassador Barshefsky noted that in the absence of effective enforcement actions by the Government, piracy and counterfeiting have reached alarming levels in Paraguay. The United States has persistently urged the Government of Paraguay to take effective action to crack down against piracy and counterfeiting internally and especially at its borders with Argentina and Brazil. We have also urged the Government to enact adequate and effective intellectual property legislation, covering patents, copyrights and trademarks. Despite the efforts of some concerned Government officials, the enforcement actions taken to date have been insufficient to halt rampant production and export of pirate and counterfeit goods. Paraguay also remains a major transshipment point for such products to the rest of the region. Since the initiation of the section 301 investigation on February 17, Paraguay has made limited progress toward addressing U.S. concerns. Bilateral consultations in March identified some immediate actions that the Government of Paraguay needed to take and other longer-term measures that are necessary to address U.S. concerns. The GOP has made some progress toward meeting these immediate action items and we look to the government to increase its efforts in the near future. Of note, we understand that the trademark and copyright laws are now nearing passage. We also look to the Government of Paraguay to take significant and effective enforcement action, internally and at the border, toward substantially eliminating piracy and counterfeiting and to enact adequate and effective intellectual property legislation without further delay.


 * Based on the 1995 and 1996 Bilateral IPR Agreements and extensive follow-up work with Chinese officials, China now has a functioning system to protect intellectual property rights (IPR). As an integral part of this national effort, numerous laws, regulations and circulars were issued during 1997. However, we are concerned with end-user piracy of business software, continuing retail piracy, growing trademark counterfeiting and problems in obtaining administrative protection for pharmaceuticals. In addition, the trademark registration process is inconsistent, a problem exacerbated by the lack of judicial review of decisions made by the trademark office. U.S. officials will continue to work to ensure that China strengthens its enforcement against illegal importation, distribution, reproduction and sale of all illegitimate IPR products.