U.S. and Hong Kong (1998)

16 January 1998

USTR ANNOUNCES RESULTS OF REVIEW OF IPR PRACTICES

Following is the text of the January 16 USTR press release on the announcement:

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USTR BARSHEFSKY ANNOUNCES RESULTS OF SPECIAL 301 "OUT-OF-CYCLE" REVIEWS

United States Trade Representative Charlene Barshefsky today announced "out-of-cycle" review decisions with respect to Paraguay, Bulgaria, Turkey, Brazil, and Hong Kong under the U.S. Government's special 301 program, designed to advance the protection of intellectual property rights.

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-- Brazil and Hong Kong will be maintained on the watch list but must make additional progress on issues of concern by the April review.

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Today's decision again demonstrates the Administration's continued resolve to press other countries throughout the year to improve intellectual property protection and enforcement. "We will continue to monitor developments and take appropriate actions wherever warranted to boost enforcement against piracy. In country after country a basic test is whether the laws, enforcement tools, and compliance meet international standards," said Barshefsky. On October 27, 1997, Ambassador Barshefsky announced other out-of-cycle review decisions with respect to Italy, Thailand, Panama, Ecuador and Luxembourg.

The Clinton Administration has an unparalleled record of IPR enforcement. As the result of actions that Ambassador Barshefsky announced in the 1997 special 301 review, the Administration has initiated or reached positive settlements in WTO dispute settlement actions against Denmark, Sweden, and Ireland. This brings to nine the number of IPR-related WTO cases initiated by the United States since 1996. In December 1997, Ambassador Barshefsky announced the WTO had ruled in favor of the United States in its case against India on protection of pharmaceuticals and agricultural chemicals. This was the first intellectual property rights dispute decided by the WTO Appellate Body and represents a significant victory that will benefit U.S. pharmaceutical and agricultural chemical companies' interests in several developing countries.

In April 1997, at the time of the last special 301 annual review, Barshefsky placed Paraguay and Turkey on the "priority watch list", and placed Bulgaria, Brazil, and Hong Kong on the "watch list." In addition, she announced that she would conduct out-of-cycle reviews regarding the situation in these countries prior to the April 1998 annual review.

These out-of-cycle reviews have led to the following determinations:

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Hong Kong will be maintained on the watch list.

We are encouraged by steps taken by Hong Kong authorities since the April 1997 review toward addressing U.S. concerns regarding piracy. These include more intense and frequent raids on retail centers; the first-ever raids on pirate CD production facilities in Hong Kong; as well as legislative improvements, notably the enactment of a new Copyright Ordinance, initiation of its licensing regime for imported CD production equipment, and the drafting of laws to license and regulate the operation of optical disc production facilities. Despite these initiatives, the piracy situation in Hong Kong has not improved. Many major pirate retail centers remain in full operation and overcapacity for CD production continues to rise. In the April review, we will closely examine Hong Kong's implementation of pending legislative proposals, including additional measures aimed at strengthening Hong Kong's enforcement regime, as well as the extent to which enforcement activity has reduced overall rates of piracy.

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