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UKRAINE

The U.S. Government withdrew benefits from Ukraine under the Generalized System of Preferences (GSP) in August 2001, and imposed $75 million worth of sanctions on Ukrainian imports on January 23, 2002, based on the repeated failure of Ukraine to comply with the June 2000 Joint Action Plan. Ukraine unfortunately enacted an unsatisfactory optical disk (OD) law in February 2002. The U.S. Government has worked with industry to develop an approach to improve the actual enforcement of copyright protection even with this inadequate OD law. To that end, the United States, in cooperation with Ukraine and industry officials, has developed a set of ten regulations to be implemented to improve the inadequate OD law. We hope to see Ukraine implement the substance of these regulations soon and follow up with strict enforcement of the current OD law. At the same time, the United States remains committed to working with Ukraine to address the remaining deficiencies in the existing OD law and thereby work toward reestablishing normal trade relations.

CHINA

The United States and China concluded bilateral agreements in 1992 and 1995 that were the basis for resolving two investigations under Section 301. The U.S. Government has been monitoring China's implementation of these agreements since they were concluded. In addition, China became a member of the World Trade Organization (WTO) in December 2001 and agreed that it would fully implement its WTO TRIPS obligations from the date it became a WTO member.

China has made progress in some aspects of intellectual property rights protection since our agreements in 1992 and 1995. In connection with its accession to the WTO, China strengthened its legal framework considerably, amending its patent law in 2000 and its trademark and copyright laws in 2001, as well as issuing judicial interpretations and other administrative regulations to make them more compliant with the TRIPS Agreement and international standards. While some implementing regulations for these laws have been issued, China needs to issue all necessary regulations. The United States has continuing concerns about the consistency of some provisions of the copyright law and current regulations with international standards. For instance, while we welcome China's efforts to address some of the issues in the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty, the U.S. Government concerned that these efforts are not yet complete.

The United States recognizes the enforcement efforts that China has made to date, but the continuing unacceptably high levels of piracy and counterfeiting require more effective and coordinated action. While export of pirated copyrighted products has largely subsided, such products are still being produced locally and imports of pirated products from other countries continue to flood the Chinese