April 2005 News

Special 301 Report Finds Progress and Need for Significant Improvements

The 2005 "Special 301" annual review of intellectual property protection in 90 countries was announced by USTR on April 29. A total of 14 countries were included for the "Priority Watch List", 36 for the "Watch List", and out-of-cycle reviews will be conducted for the EU, Canada, Indonesia, Philippines, Russia, Saudi Arabia and Ukraine. Ukraine remains a "Priority Foreign Country", Paraguay will be subject to continued monitoring under "Section 306 Monitoring", and China is receiving the first-ever dual designation of Priority Watch List and Section 306 Monitoring. USTR is also invoking the transparency provisions of the WTO TRIPs Agreement, which will require China to produce detailed documentation on certain aspects of IP enforcement that affects U.S. rights under the TRIPs Agreement.

View 2005 Special 301 report

Central American Trade Pact Parties Pursue Implementation

The U.S. and its partners in a proposed trade pact with Central America and the Dominican Republic--the CAFTA-DR--are meeting in Washington April 26-29 to expand efforts to implement the agreement. In an April 28 statement, USTR said the meetings continue the cooperation that began during the negotiations to create the trade pact among the U.S., the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. CAFTA-DR would create a committee on trade-capacity building -– a first for any U.S. free-trade agreement -- in recognition of the importance of such assistance in promoting economic growth, reducing poverty and taking full opportunity of liberalized trade. The committee would coordinate assistance activities to improve the benefits to small and medium-sized enterprises, facilitate rural diversification and improve customs procedures. View USIS Washington File report (includes text of USTR press release)

USITC Report on Probable Effect of Changes to U.S.-Morocco FTA

On April 28, the U.S. International Trade Commission (USITC) released its report Effect of Modifications to the U.S.-Morocco Free Trade Agreement. The USITC was asked by USTR to identify any changes to its previous advice concerning the impact of the U.S.-Morocco FTA resulting from a new effective date. The Commission’s earlier analysis found that there would not be a significant impact on U.S. imports or exports of goods accorded benefits under the FTA, and the change in the implementation date (to July 1, 2005) does not change these findings. View USITC press release

U.S., Brazil Outline Common Agenda, Regional Challenges

Secretary of State Condoleeza Rice and Brazilian Foreign Minister Celso Amorim discussed the common agenda of the two nations, as well as the challenges facing the hemisphere, during an April 26 meeting in Brazil. After their meeting, the Secretary explained that the agenda she envisions for the Western Hemisphere includes governance in accordance with the Inter-American Democratic Charter, and the pursuit of economic opportunities through free trade -- globally via the WTO, regionally through the establishment of a Free Trade Area of the Americas (FTAA), and subregionally through smaller accords. That positive agenda, she added, also includes the pursuit of sound, pro-growth economic policies and the promotion of good governance, including anti-corruption initiatives and efforts to extend health care and educational opportunities. The promotion of this agenda, Rice said, should serve to enhance the stability of the region and deter the pursuit of impractical populist policies.

View USIS Washington File report

Ninth Round of U.S.-Andean Trade Talks Paves Way for Progress

Regina Vargo, assistant U.S. trade representative for the Americas, told reporters April 26 that the ninth round of trade negotiations between the U.S. and the nations of Colombia, Ecuador and Peru yielded some progress toward a proposed U.S.-Andean free-trade agreement. Vargo stated that the latest round of trade talks was notable in terms of furthering the region's efforts to build trade capacity. The proceedings were complicated by the April 20 ouster of Ecuador's president, Lucio Gutierrez. As a result of the abrupt change of government, "the Ecuadorian delegation participated" in the Andean trade talks, "but did not have instructions that enabled them to take specific positions," Vargo said. The next round of U.S.-Andean trade negotiations will take place in June. Vargo stated that it was "premature" to say when negotiations would be completed.

View USIS Washington File report

Global Anti-corruption Forum To Emphasize Practical Measures

David Luna, director for anti-corruption and governance initiatives in the State Department’s Bureau for International Narcotics and Law Enforcement Affairs, said that the Fourth Global Forum on Fighting Corruption and Safeguarding Integrity (GF IV), to be held in Brazil in June, should strengthen the political will to implement and eventually enforce the U.N. Convention Against Corruption (UNCAC). UNCAC has been signed by 119 countries and ratified by 21 since it was signed in 2003. Measuring whether countries are in fact making progress in their fight against corruption is important for keeping those commitments and energizing action, Luna said. Combating international corruption remains a high priority for the Bush administration. President Bush has incorporated the fight against corruption in numerous national security and foreign policy initiatives -- including the Millennium Challenge Account, the global war on terrorism, and efforts to promote reform and freedom in the Middle East, according to Luna.

View USIS Washington File report

Interim Environmental Review of Oman Free Trade Agreement

USTR, on behalf of the Trade Policy Staff Committee (TPSC), is seeking comments on the interim environmental review of the proposed U.S.-Oman Free Trade Agreement (FTA). Comments on the draft environmental review are requested no later than May 31, 2005 to inform the negotiations and the review of the final agreement. For information on making submissions, please consult the Federal Register notice.

Congress Urged To Pass Trade Agreement with Central America

In April 21 testimony before the House Ways and Means Committee, Acting U.S. Trade Representative (USTR) Peter F. Allgeier said that passage of the U.S. free-trade agreement with Central America and the Dominican Republic, or CAFTA-DR, would encourage democracy and development in the region. Allgeier recalled the extraordinary progress that Central America has made in the past 20 years and pointed out that the Dominican Republic and the nations of Central America are all democracies with elected leaders that "are embracing freedom and economic reform, fighting corruption, strengthening the rule of law and battling crime and supporting America in the war on terrorism." He explained that the U.S. and these nations envision CAFTA-DR as an opportunity to solidify their march toward democracy and free markets. Allgeier acknowledged that there is considerable U.S. congressional concern about workers' rights and labor standards in Central America and the Dominican Republic. He said that the USTR shares this interest and the common goal of "seeing the continuation of real, meaningful improvements in worker rights in the region." View USIS Washington File report (includes text of Allgeier testimony)

Chinese, U.S. Authorities Cooperate To Convict Counterfeiters

U.S. Immigration and Customs Enforcement (ICE) is hailing U.S.-Chinese cooperation on a major anti-piracy investigation that has led to the conviction and sentencing in Shanghai of two U.S. counterfeiters and two Chinese accomplices. In an April 19 news release, ICE announced the successful conclusion of "Operation Spring" and described the joint U.S.-China effort as a "landmark" that will serve as a road map for future cooperation on intellectual property rights (IPR) investigations. A Shanghai People's Court sentenced both U.S. offenders to jail terms and ordered them to pay fines for illegally selling and distributing more than $840,000 worth of pirated DVDs via the Internet to buyers in more than 20 countries, ICE said. Both of the convicted Chinese accomplices were ordered to pay fines, and one was sentenced to serve time in prison. Overall, the operation utilized the efforts of various U.S. law enforcement organizations, as well as China's Ministry of Public Security and Shanghai's Public Security Bureau, ICE said.

View USIS Washington File report

Anti-corruption Agenda Urged for Western Hemisphere Nations

In remarks to the American Bar Association, John Maisto, U.S. permanent representative to the Organization of American States (OAS), said that a vigorous anti-corruption agenda that promotes greater transparency and accountability for governments throughout the Western Hemisphere is necessary to ensure consolidation of democratic principles in the region. Maisto -- who also serves as U.S. national coordinator for the Summit of the Americas process -- explained that the U.S. is working hard to promote an agenda aimed at "strengthening good governance, the rule of law, and a culture of lawfulness, both regionally and globally." Implementation of action-oriented policies is especially important to combat corruption, he added. Maisto said three major events will take place soon in the hemisphere, "which will all touch on the subject [of corruption] in varying degrees." Those events are the Third Community of Democracies ministerial meeting, scheduled to take place April 26-30 in Santiago, Chile; the Fourth Global Forum Against Corruption, to be hosted by Brasilia, Brazil, in June; and the OAS General Assembly, also taking place in June, in Fort Lauderdale, Florida. All three events "will have a global focus, of course, but because they are being held in the region, each event will have special significance for the Western Hemisphere," Maisto stated.

View USIS Washington File report

WTO: Russia Concludes Goods Negotiations with 29 Members

At the 27th session of its Working Party on April 13 and 15, the Russian Federation reported the completion of bilateral negotiations on goods with a total of 29 WTO members (the EC counting as one), which represents 50 percent of members of the Working Party and 87 percent of total Russian imports. The chairman of the Working Party, Ambassador Stefan Johannesson of Iceland, submitted on his own responsibility new texts for the revision of the Working Party Report that will be considered in future meetings.

View WTO news item

WTO Negotiations Aim To Reduce Procedural Barriers at Borders

During a recent interview, a U.S. trade official discussed the prospects for WTO trade facilitation, the goal of which is to alleviate customs and related barriers to trade at the border. Developing countries have come to realize, he said, that if they and their developing country neighbors all reform their antiquated customs procedures, then all sides would gain economically from more trade. He stated that the strongest U.S. allies in the negotiations are Chile and Singapore, countries that have realized the benefits of customs reform from honoring such commitments they made in negotiations of free-trade agreements with the U.S. The U.S. has submitted a number of proposals to the WTO negotiations, including one for requiring expedited customs treatment for express shipments. Negotiators held substantive sessions in February and March, with more sessions scheduled for May, June and July. The U.S. official said negotiators are trying to get all proposals on the table by July and then refine them ahead of the December WTO ministers' meeting in Hong Kong.

View USIS Washington File report

Allgeier’s Remarks on “Trade Agreements and the States”

In remarks to the National Conference of State Legislatures on April 16, Acting U.S. Trade Representative Peter Allgeier discussed the Bush Administration’s trade priorities, trade issues of particular interest to states, and how the U.S. Government consults with states in the formulation of U.S. trade policy. Regarding government procurement, Allgeier said that the USG is asking state governments to give fair, non-discriminatory treatment to foreign suppliers of goods and services so that U.S. firms receive fair treatment when selling their products and services to foreign governments.

Diplomacy Resolving Trade Disputes with China, U.S. Officials Say

During testimony at a House Ways and Means Committee hearing on U.S.-China economic relations on April 14, USTR and Council of Economic Advisors (CEA) officials defending U.S. trade policy with China met sharp criticism from members of Congress who are demanding more action. The officials cautioned that protectionist trade legislation and heightened rhetoric would only make engaging China on trade issues more difficult. Assistant U.S. Trade Representative of China Affairs Charles W. Freeman III told the committee that the U.S. is engaged in high-level diplomacy and is using the most effective tools available, including trade remedy laws, to resolve potential trade disputes with China. The administration is pressing China to adhere to its WTO obligations, especially on protecting copyrights and patents, and opening its markets to agricultural and other products, Freeman testified. Meanwhile, CEA member Kristin J. Forbes said the Bush administration is working through both bilateral and multilateral channels to encourage China to move toward exchange rate flexibility. However, committee members, Republicans as well as Democrats, stated that the administration has to take more aggressive action to halt what they view as unfair Chinese trade practices.

View USIS Washington File report

USITC Report on Probable Effect of Changes to U.S.-Morocco FTA

On April 18, the U.S. International Trade Commission (USITC) launched an investigation at the request of USTR to determine the probable effect of modifications to the U.S.-Morocco Free Trade Agreement (FTA). The modified FTA will enter into force on July 1, 2005. The USITC is seeking input for its investigation from interested parties by 5:15 p.m. on April 25, 2005. No public hearing will be held in connection with the investigation, but the Commission welcomes written submissions for the record. For information on submitting comments, please consult the USITC press release.

Commerce Official Urges China To Punish IPR Violators Forcefully

During an April 12 news conference in Beijing, Assistant Secretary of Commerce for Market Access and Compliance William Lash III stated that stronger punishments and more vigorous enforcement are necessary to stem a growing epidemic of infringement of intellectual property rights (IPR) in China. While he commended the Chinese government for its efforts at public education to drive home the importance of IPR protection, Lash said education is not enough, adding, "Pirates need jail time. Pirates don't respect rules. Pirates respect force." Chinese officials must determine for themselves what punishments will be effective deterrents and vigorously apply them, Lash said. He stated that the U.S. would not rule out any options, including WTO dispute-settlement mechanisms, in dealing with IPR violations and other trade issues involving China. However, he added, "This is a very important bilateral trade relationship. Both sides have a lot to gain by increased cooperation, increased dialogue, increased trade and commerce." Lash said the two sides continue to have constructive bilateral discussions, and continue to work on the piracy issue. View USIS Washington File report (includes transcript of press conference)

Central America Trade Pact Seen Aiding U.S., Regional Interests

During his April 13 testimony before the U.S. Senate Finance Committee, acting U.S. Trade Representative Peter Allgeier said that the proposed free trade agreement with Central America and the Dominican Republic, or CAFTA-DR, will be a partnership that spurs economic growth while strengthening regional democracy. Allgeier said that the agreement would help consolidate democratic and free-market gains throughout Central America and the Dominican Republic, thereby reinforcing the region's "progress toward economic, political and social reform." From the U.S. perspective, Allgeier said that CAFTA is attractive because Central America and the Dominican Republic are large export markets for the U.S. In response to skeptics who claim that CAFTA's benefits are likely to be one-sided, Allgeier pointed out that the agreement "will create new opportunities for U.S. workers and manufacturers," since under CAFTA, "more than 80 percent of U.S. exports of consumer and industrial goods will become duty-free immediately, with remaining tariffs phased out over 10 years."

View text of Allgeier’s testimony

Request for Comments: WTO Dispute Settlement Proceeding on EC Selected Customs Matters

View the text of the Federal Register notice regarding: a) the non-uniform administration by the EC of laws, regulations, judicial decisions, and administrative rulings pertaining to the classification and valuation of products for customs purposes, and to requirements, restrictions or prohibitions on imports; and b) the EC’s failure to to institute judicial, arbitral or administrative tribunals or procedures for the purpose, inter alia, of the prompt review and correction of administrative action relating to customs matters. DATES: Although USTR will accept any comments received during the course of the dispute settlement proceedings, comments should be submitted on or before May 2, 2005, to be assured of timely consideration by USTR. For information on submitting comments, please consult the Federal Register notice

Request for Comments on WTO Dispute Settlement Proceeding Regarding American JOBS Creation Act of 2004

View the text of the Federal Register notice seeking public comments on the WTO Dispute Settlement proceeding regarding the American JOBS Creation Act of 2004, which has been requested by the European Communities (EC). USTR is inviting written comments from the public concerning the issues raised in this dispute. DATES: Although USTR will accept any comments received during the course of the dispute settlement proceedings, comments should be submitted on or before May 2, 2005, to be assured of timely consideration by USTR. For information on submitting comments, please consult the Federal Register notice

U.S. Advances Global Outreach To STOP! Trade In Fakes

Officials from seven federal agencies (including the Commerce Department) will travel to Hong Kong, Japan, Korea and Singapore on April 11-21 to further the Administration's Strategy Targeting Organized Piracy (STOP!). Their mission is to deepen cooperative enforcement efforts and to work toward coordinated international solutions to stop trade in fake goods that threaten livelihoods, health and safety worldwide. Outreach to Asia will be followed by visits to other regions in May. "Intellectual property rights protection is essential to the drive of America's economic future which is innovation," said Commerce Secretary Carlos Gutierrez. "The mission of STOP! is to ensure that the talents and creativity of America's brightest minds are protected from the scourge of piracy and counterfeiting.” On each leg of the trip, U.S. officials will meet with their government counterparts and representatives of the private sector to learn about their successful enforcement programs and to share proposals designed to make it easier for businesses to register and protect their brands in overseas markets. The delegation will include Steve Pinkos, Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the U.S. Patent and Trademark Office and Stephen Jacobs, Deputy Assistant Secretary of Commerce for Trade Agreements and Compliance.

View Commerce Department press release

Korea: Intellectual Property Rights Toolkit

View the new Korea Intellectual Property Rights (IPR) Toolkit, prepared by the U.S. Commercial Service and U.S. Embassy in Seoul. This Toolkit provides an overview of Korea's IPR environment, suggestions regarding how U.S. companies can protect their IPR in the Korean market, and steps a company may want to consider if they are faced with an IPR infringement. The Korea Toolkit is the latest in a set of country-specific IPR Toolkits currently being developed for commercially significant markets. Both the Korea and China IPR Toolkits can be reached from www.StopFakes.gov, the one-stop website for U.S. Government resources for intellectual property protection.

USTR Statement on Status of U.S.-EU Large Civil Aircraft Talks

In an April 8 press release, USTR stated that the U.S. regretted the inability of the U.S. and EU to reach a comprehensive agreement to end subsidies for the production and development of large civil aircraft in the U.S. and Europe. USTR Spokesman Richard Mills said, “The United States continues to believe that such an agreement would be a useful solution to this important issue, and remains prepared to negotiate on the basis of the January 11 agreement, including the 'standstill' on subsidies.” Mills said that the U.S. “…is reviewing the situation to determine the best course of action to obtain the elimination of subsidies to Airbus… [and] will continue to monitor closely the actions of the EU and its Member States with regard to support for large civil aircraft.” Mills said that, should the EU provide additional subsidies for Airbus, “the United States will return to WTO dispute settlement."

View USTR press release

USITC Study on Impact of FTA's Under Trade Promotion Authority

The U.S. International Trade Commission (USITC) has launched an investigation on the impact of three trade agreements signed since 2002 under trade promotion authority (also known as "fast track authority"). The investigation will review and analyze the economic impact on the U.S. of the U.S.'s Free Trade Agreements with Chile, Singapore and Australia. USITC will submit the report to Congress by June 1, 2005. The Commision is seeking input for the investigation from all interested parties, and will hold a public hearing in connection with the investigation on April 27, 2005. The ITC also welcomes written submissions for the record. For more information, please consult the USITC press release.

USITC Investigation of Possible Modifications to U.S. Generalized System Of Preferences

The U.S. International Trade Commission (USITC) is seeking input for a newly initiated investigation concerning possible modifications of the Generalized System of Preferences (GSP). The USITC will provide advice as to the adverse impacts of the granting of a waiver of the competitive need limits for Indonesia for tropical plywood, HTS subheading 4412.13.40, and for contact lenses, HTS subheading 9001.30.00; and for Thailand for certain silver jewelry, HTS subheading 7113.11.50, and for electrostatic photocopying apparatus, HTS subheading 9009.12.00. The USTR will publish full article descriptions in the Federal Register. The USITC is seeking input for its new investigation from all interested parties and requests that comments be submitted no later than 5:15 p.m. on May 6, 2005. For more information on submitting comments, please consult the USITC press release.

U.S. Internet Gambling Restrictions Can Stand as U.S. Wins Key Issues in WTO Dispute

On April 7, the U.S. won an important victory when the WTO Appellate Body sided with it on key issues in a challenge to U.S. laws on internet gambling. "This win confirms what we knew from the start – WTO Members are entitled to maintain restrictions on internet gambling," said Acting U.S. Trade Representative Peter F. Allgeier. "We are pleased that the Appellate Body has agreed with our position that the U.S. gambling laws at issue here protect public order and public morals.” Allgeier added, "U.S. restrictions on internet gambling can be maintained... This report essentially says that if we clarify U.S. internet gambling restrictions in certain ways, we’ll be fine." The Appellate Body found that the concerns addressed by the three U.S. federal gambling laws at issue in this dispute "fall within the scope of ‘public morals’ and/or ‘public order’" under an exception to WTO rules for trade in services. The next step in the process is for the WTO’s Dispute Settlement Body to formally adopt the panel and Appellate Body reports within 30 days. There is no further appeal.

View USTR press release

Trade Pact Would Solidify Gains in Central America, Officials Say

The remarkable progress toward democracy achieved in Central America over the past 10 to 15 years could be reversed if economic conditions are allowed to deteriorate, Deputy Secretary of State Robert Zoellick told representatives of Central American and Dominican Republic communities in the United States (CENDRUSA). The proposed free-trade agreement between the United States, the nations of Central America and the Dominican Republic is vital to the economic well-being of the participating countries but its implications reach far beyond the realm of commerce, Christopher Padilla, assistant U.S. trade representative for intergovernmental affairs said at the State Department-hosted dialogue on the potential benefits of the accord April 6. Assistant Secretary of State for Western Hemisphere Affairs Roger Noriega told meeting participants that ratification of the agreement would be a major step forward in deepening U.S. ties with the region, and would stimulate broad-based economic growth as well as positive structural change in Central America and the Caribbean. Assistant U.S. Trade Representative for the Americas Regina Vargo said that, apart from the potential to enhance the enforcement of labor laws in the region, increasing the integration and competitiveness of the participants' textile and apparel sectors is the "most demonstrable example of the mutual benefit we derive" from the CAFTA-DR.

CITA Announces Self-Initiation of China Safeguard Proceedings

On April 4, the Committee for the Implementation of Textile Agreements (CITA) announced its decision to initiate safeguard proceedings to determine whether imports of certain Chinese origin textile and apparel products are contributing to the disruption of the U.S. market. “This decision is the first step in a process to determine whether the U.S. market for these products is being disrupted and whether China is playing a role in that disruption,” said Commerce Secretary Carlos Gutierrez. The U.S. is permitted, under the provisions of China’s WTO Accession Agreement, to apply safeguards on textile products from China in instances where those criteria are met. The decision was made to initiate this review based on substantial increases in imports of these products from China over the first quarter of this year, following the removal of textile quotas under the WTO as of January 1. In accordance with its published procedures, CITA will shortly publish in the Federal Register notices seeking public comments regarding each product subject to safeguard proceedings, providing relevant information, and specifying the date by which comments must be received.

View Commerce press release

U.S. Pleased by Meetings with Cairns Group

The U.S. has reached a "very satisfying conclusion" to its March 31 meetings with the Cairns Group global coalition of 17 agricultural exporting nations, says U.S. Secretary of Agriculture Mike Johanns. In a statement released that day, Johanns said the meetings, held in Cartagena, Colombia, gave the U.S. an opportunity to make progress in advancing global free trade. The meetings were held during the Cairns Group’s ministerial meeting, where the participants discussed, inter alia, the CAFTA-DR. Johanns said he and other USDA officials talked with the Cairns Group about ways to work together "in making progress in the Doha Development Agenda of the World Trade Organization." The objectives of the U.S. and Cairns Group on advancing free trade have often coincided, Johanns indicated. He added that while in Cartagena, U.S. officials discussed with their Colombian hosts the Andean Free Trade Agreement.

View USIS Washington File report

USTR Announces Continued Review of Brazil GSP Benefits

On April 4, USTR announced that it will continue to review a petition submitted by the International Intellectual Property Alliance (IIPA) to remove Generalized System of Preferences (GSP) benefits from Brazil for inadequate protection of intellectual property rights. The extension of the review is a result of some initial positive steps taken by the Brazilian Government, as well as USTR consultations with U.S. copyright stakeholders. Because the U.S. and Brazil expect to continue working together and monitoring the progress made in combating copyright piracy, the GSP review has been formally extended to September 30, 2005, in order to allow time for Brazil’s new National Action Plan to become effective in enforcing copyrights and reducing piracy. The Administration attaches a high priority to obtaining substantial improvement in the protection of U.S. intellectual property rights in Brazil, and will continue to work closely with U.S. copyright interests to that end.

View USTR press release