The Office of the United States Trade Representatives releases special 301 report on Intellectual Property Rights.

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On April 27th, The Office of the United States Trade Representative (USTR) today released their 2018 Special 301 report listing trading partners that do not “adequately or effectively protect and enforce intellectual property (IP) rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights”.

The Report singles out several US trading partners to address IP-related issues and places certain countries on a “Watch List” and “Priority Watch List”.

As you may be aware, Section 301 of the U.S. Trade Act of 1974 authorizes the President to take all appropriate action, including retaliation, to obtain the removal of any act, policy, or practice of a foreign government that violates an international trade agreement or is unjustified, unreasonable, or discriminatory, and that burdens or restricts US commerce. Section 301 actions are unique in that they do not require authorization from the World Trade Organization (TWO) to take enforcement action.

The US Government estimates the Intellectual Property industries directly and indirectly support 30% of all employment in the United States (or about 45.5 million American jobs).

Some highlights of the 2018 Special 301 Report include:

1. The following 12 countries are on the “Priority Watch List” – Algeria, Argentina, Canada, Chile, China, Colombia, India, Indonesia, Kuwait, Russia, Ukraine, and Venezuela.

2. China is included on the “Priority Watch List” for the 14th year in a row and claims China’s technology transfer practices, trade secret theft, counterfeit manufacturing etc.

3. India is also included on the “Priority Watch List” for “longstanding challenges in its IP framework and lack of sufficient measurable improvements, particularly with respect to patents, copyrights, trade secrets, and enforcement, as well as for new issues that have negatively affected U.S. right holders over the past year.”

4. Canada was surprisingly indicated on the “Priority Watch List” instead of their usual “Watch List” status. The USTR cited Customs inability to inspect or detained counterfeit or pirated good shipped through Canada and IP protections for pharmaceuticals among others.

The full Spectial 301 Report can be read here.

If you have any questions about this report, feel free to contact David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

Renegotiated KORUS FTA results in changes more favorable to US companies.

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According to the Office of the United States Trade Representative website, the Trump administration has negotiated additional favorable terms of the United States – Korea Free Trade Agreement (KORUS) that went into effect in 2012.

Fulfilling part of his campaign promises, President Trump has re-negotiated the KORUS with these (and many more) favorable changes to US companies:

1. Korea will double the number of US automobile exports to 50,000 cars per manufacturer per year.

2. US automobile exports to Korea that meet US safety standards can enter the Korean market without further modification. This lowers the cost of US cars being sold in Korea as additional testing and modifications are not needed before the US cars are sold in the marketplace.

3. Korea will recognize US standards for auto parts to service US vehicles in Korea, this reduces the labeling burden for US parts manufacturers.

4. Korea will amend their Premium Pricing Policy for Global Innovative Drugs to ensure non-discriminatory and fair treatment for US pharamceutical exports.

5. Korea imports of steel products into the US will be subject to a product-specific quota equal to 70% for the average annual import volume of such products during the years 2015-2017, resulting in reduction of Korean steel shipments to the US.

If you have any questions regarding the KORUS or other trade and customs law issues, feel free to contact David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

Trump Announces Tariffs on at Least $50 billion in Chinese Goods.

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On March 22nd, President Donald Trump signed a memorandum instructing the U.S. Trade Representative to prepare a list of goods imported from China that will be subject to tariffs.

The tariffs are in response to China’s policies of forced technology transfers, forced joint ventures, intellectual property theft and technology licensing restrictions for U.S. companies doing business in China.

Check back here for the list when it is published. It is is estimated the list will include approximately 1,300 tariff lines and the public will have 30 days to submit comments.

If you have any questions how this may affect your imports, call experienced trade and customs attorney David Hsu at 832-896-6288 or email dhsu@givensjohnston.com.