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USTR Releases Annual Special 301 Report on Intellectual Property Rights

05/01/2013

Washington, D.C. – Acting U.S. Trade Representative Demetrios Marantis announced today that the Office of the United States Trade Representative (USTR) released its annual “Special 301” Report on the adequacy and effectiveness of U.S. trading partners’ protection and enforcement of intellectual property rights (IPR) and market access for persons that rely on IPR protection. Significant actions in this year’s report include the following: 

• The U.S. Trade Representative designates Ukraine a Priority Foreign Country (PFC) under the Special 301 statute due to severe deterioration of enforcement in the areas of government use of pirated software and piracy over the Internet, as well as denial of fair and equitable market access through the authorization and operation of copyright collecting societies; 

• USTR reports grave concerns about misappropriation of trade secrets in China, and incremental progress on a few of China’s many other significant IPR and market access challenges; 

• USTR adds Barbados, Bulgaria, Paraguay, and Trinidad and Tobago to the Watch List due to specific problems identified in the report; 

• USTR announces that while El Salvador and Spain are not listed in the Report, USTR will conduct out-of-cycle reviews to assess progress on IPR challenges identified in this year’s reviews of those countries; 

Canada moves from the Special 301 Priority Watch List to the Watch List in recognition of significant progress on copyright issues, while USTR continues to work with Canada to address several remaining IPR concerns; and 

Brunei Darussalam and Norway move off of the Special 301 Watch List. 

“This year’s Special 301 Report demonstrates U.S. resolve to take strong action to support critical jobs and exports in IP-intensive industries,” said Acting U.S. Trade Representative Marantis. “I regret that the Government of Ukraine has earned the first new Priority Foreign Country designation in 11 years due to its severely deteriorating climate for IPR protection and market access, and call upon that government to reverse recent backsliding and swiftly resolve the problems identified today. I am encouraged that other countries, notably Canada, have made long-awaited progress on concerns identified in past reports; I hope that Canada will sustain and build upon that progress, and that other listed countries will make similar progress.” 

“The actions reflected in this year’s report send a message to all trading partners on the Priority Watch List and the Watch List that the United States is prepared to use the Special 301 process to its full effect, both to recognize positive action and, where necessary and appropriate, to identify deterioration of the IPR protection and enforcement systems that play such a vital role in international trade.” 

BACKGROUND 

The “Special 301” Report is an annual review of the global state of IPR protection, enforcement, and market access, which USTR conducts pursuant to Section 182 of the Trade Act of 1974, as amended by the Omnibus Trade and Competitiveness Act of 1988 and the Uruguay Round Agreements Act. 

USTR reviewed 95 trading partners for this year’s Special 301 Report, and placed 41 countries on the Priority Foreign Country, Priority Watch List, or Watch List. 

USTR has designated Ukraine as a Priority Foreign Country in this year’s report as a trading partner whose onerous or egregious acts, policies, or practices have the greatest adverse impact (actual or potential) on the relevant U.S. products. In addition, Ukraine is not entering into good faith negotiations or making significant progress in bilateral or multilateral negotiations. Trading partners on the Priority Watch List present the most significant concerns regarding insufficient IPR protection or enforcement, or otherwise limited market access for persons relying on intellectual property protection. Ten countries – Algeria, Argentina, Chile, China, India, Indonesia, Pakistan, Russia, Thailand, and Venezuela – are on the Priority Watch List. USTR will seek to engage intensively with these countries, as appropriate, during the coming year. 

Thirty trading partners are on the Watch List, also meriting bilateral attention to address underlying IPR problems: Barbados, Belarus, Bolivia, Brazil, Bulgaria, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Finland, Greece, Guatemala, Israel, Italy, Jamaica, Kuwait, Lebanon, Mexico, Paraguay, Peru, Philippines, Romania, Tajikistan, Trinidad and Tobago, Turkey, Turkmenistan, Uzbekistan, and Vietnam. 

Public Engagement 

USTR continued its enhanced approach to public engagement activities in this year’s Special 301 process. USTR requested written submissions from the public through a notice published in the Federal Register on December 31, 2012. This year’s review yielded 41 comments from interested persons. The submissions received by USTR were made available to the public online at www.regulations.gov, docket number USTR-2012-0022. On February 20, 2013, USTR conducted a public hearing at which interested persons testified before the interagency Special 301 subcommittee. The hearing included testimony from 13 witnesses, including representatives from industry, non-governmental organizations and foreign governments. A transcript of the hearing is available at www.ustr.gov.