In its annual report on the state of intellectual property rights protection around the world, the Office of the U.S. Trade Representative fingered China and Russia as havens for rampant IPR violation but stopped short of pursuing trade sanctions against them.
The USTR “Special 301” report, issued Friday, alternately encouraged and disappointed the recording and movie industries, which had hoped the agency would seek the intervention of the World Trade Organization or seek bilateral trade sanctions.
The USTR puts countries with allegedly inadequate IPR protection on its “Watch List,” “Priority Watch List” or “Priority Foreign Country List.” This year’s report elevated China from “Watch” to “Priority Watch” for its “failure to effectively protect intellectual property rights and to meet its commitment to significantly reduce infringement levels, despite efforts by China’s senior leadership to do so,” acting USTR Peter Allgeier said in a statement. “China must take action to address rampant piracy and counterfeiting, including increasing the number of criminal IPR cases and further opening its market to legitimate copyright and other goods.”
“We will work closely with U.S. industry and other stakeholders, with an eye toward utilizing WTO procedures to bring China into compliance with its trade obligations,” Allgeier said. The USTR has never publicly evoked the possibility of an appeal to the WTO until now.
Russia, which has been a Priority Watch List country since 1997, remains a serious concern because of “high levels of piracy of CDs and DVDs and a growing problem with Internet piracy of copyrighted works” and “continuing problems with Russia’s IPR regime, including weak IPR enforcement and lack of data protection,” according to the report.
Allgeier promised to monitor Russia’s attempts to improve the situation and suggested success or failure could impact Russia’s current eligibility for favored trade status with the U.S.