Hegemony: Priority List Of China'S Continued Stay In The Special 301 Report

The United States Trade Representative Office (USTR) announced the Special 301 report in 2019 in April 25, 2019.

The Special 301 procedure is mainly implemented in accordance with the 182nd section of the Trade Act 1974. It authorizes USTR to investigate whether foreign government measures refuse to provide adequate and effective intellectual property (IPR) protection, or does not give fair and fair market access opportunities to American enterprises relying on IPR protection. Based on this, the "priority list" (PriorityWatchList) and "observation list" (WatchList) assessment report is made.

In 2018, Canada assessed the "priority list" (PriorityWatchList) in the assessment report. The main reason is that Canada has not been able to enforce the law on the border of counterfeit goods, the protection of patent rights for innovative drugs is still insufficient, the copyright protection provisions are still missing, and there are doubts about the lack of pparency and due process in the stipulation of geographical indications (GIs).

Based on this, some industry groups even asked the US government to formulate relevant action plans to provide IPR Law Enforcement Assistance to them.

However, USTR believes that after the signing of the US Mexico Canada agreement (USMCA), the aforesaid situation will be significantly improved, so it is decided to remove the Canadian country.

According to USMCA, each State Party shall give the customs wide discretion to decide whether to seize suspected counterfeit goods, which also includes "phipment goods".

On the other hand, in terms of geographical indications, USMCA requires that the common name of geographical indications be the common name of the relevant commodity, and the State Party shall set up relevant procedures to allow its objection or withdrawal.

Although USMCA's future is uncertain, Canada's signing of USMCA has been viewed by the United States as a major step forward in the enforcement of IPR.

On the other hand, China will continue to rank the priority list this year.

Because of its rampant counterfeit products, inadequate copyright law and even lax enforcement of IPR, China has been a major issue that USTR has attacked.

In particular, USTR believes that China's business environment still faces severe challenges from IPR in terms of foreign capital. Its urgent task is to carry out structural reforms on IPR basic protection and law enforcement, including opening up to foreign investment, allowing the market to decide the allocation of resources, and the government should avoid excessive intervention in the technology pfer decisions of private sector enterprises.

In addition, although China formally implemented the electronic commerce act in January 1, 2019, the law not only helped to eliminate counterfeit goods on the e-business platform, but also had complicated procedural requirements for real rights holders.

In recent years, China has actively reorganized relevant organs responsible for IPR affairs. In January 2019, it launched the "Supreme Court Intellectual Property Tribunal", and launched a trial of IPR appeal cases in March 2019. However, USTR thought it would be too early to say whether such policies would help the Chinese side to increase the level of IPR protection.

USTR warned that, as the problems mentioned in the Special 301 report mentioned above continue to deteriorate, the investigation and sanction procedure of China's "general 301 clause" under the 1974 trade law will not be excluded.