The Office of the U.S. Trade Representative (USTR) focused attention on the significant challenges that manufacturers in the United States face around the world in protecting their intellectual property (IP) today with the release of this year’s Special 301 report. IP protection is a top issue for manufacturers in the United States: innovation drives U.S. global leadership and high-paying jobs in manufacturing. Foreign governments and competitors, however, often seek to appropriate American IP or fail to protect it fully, endangering American jobs, innovation and competitiveness.
This year’s report and its accompanying press release, in keeping with language in the March 2017 Trade Policy Agenda and Executive Order on Trade Deficits, lend new urgency to the need for IP protection and enforcement. The report explicitly highlights the use of “all possible sources of leverage” to ensure that IP owners have a “full and fair opportunity to use and profit from their IP around the globe” as a key trade policy objective and states that the “theft of IP has resulted in distorted markets and unfair trade practices that harm American workers, innovators, service providers and small and large businesses.”
This year’s Special 301 report highlights specific challenges faced by manufacturers in the United States in priority markets that the NAM identified in its detailed submission, such as China, India, Indonesia, Colombia and Russia, though the list of countries ranked in the “priority watch list” and “watch list” has not changed from last year’s report. The report also analyzes global challenges, such as counterfeiting and piracy and geographical indications, as well as weak trade secret protection, counterfeiting and piracy and inadequate protection of patents in detail.
Highlights include the following:
- Priority watch list placement for four of the NAM’s “top five” priority markets (China, India, Indonesia and Russia) and watch list placement for Colombia; the NAM has written extensively about challenges in these markets in submissions to the Special 301 report, National Trade Estimate report and on digital trade barriers.
- Other troublesome markets, such as Brazil, Canada and Thailand, flagged by manufacturers in the United States for the “watch list” were also designated; other NAM-highlighted countries named in the report include Argentina, Chile, Ecuador, Mexico, Peru, Thailand and Vietnam.
- A continued out-of-cycle review for Colombia, designed to address concerns with that country’s implementation of its free trade agreement with the United States and its implementation of its National Development Plan related to patents; the USTR did not designate an out-of-cycle review for India, which the NAM and other industry groups had sought to more deeply assess recent developments in Indian IP policy and practice.
- High-level priority on key thematic issues impacting manufacturers in the United States, including inadequate border enforcement to battle counterfeits, challenges to trademark registration and protections, high levels of digital and online piracy, weak trade secrets protection, indigenous innovation and forced technology transfer, geographical indications and market access barriers for health and agricultural products.
Given the increasingly crucial role that innovation and IP play for manufacturers in the United States, the NAM will continue to work with Secretary of Commerce Wilbur Ross, USTR-designee Ambassador Robert Lighthizer and other members of the administration to tackle its promise to “use all possible sources of leverage” to improve IP protection consistent with an international rules-based system. Such leverage must include both new and existing tools, ranging from domestic legislation, such as the Trade Facilitation and Trade Enforcement Act, to market-opening trade agreement negotiations. Such work will be critical in achieving our common goal of growing manufacturing here in the United States and fighting for a level playing field abroad.
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