The Special 301 Report is prepared annually by the

Office of the United States Trade Representative The Office of the United States Trade Representative (USTR) is an agency of the United States federal government responsible for developing and promoting United States foreign trade policies. Part of the Executive Office of the President, it ...

(USTR) that identifies

trade barriers Trade barriers are government-induced restrictions on international trade. According to the theory of comparative advantage, trade barriers are detrimental to the world economy and decrease overall economic efficiency. Most trade barriers work o ...

to United States companies and products due to the

intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, co ...

laws, such as

copyright A copyright is a type of intellectual property that gives its owner the exclusive legal right to copy, distribute, adapt, display, and perform a creative work, usually for a limited time. The creative work may be in a literary, artistic, ...

patents A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an sufficiency of disclosure, enabling discl ...

and

trademarks A trademark (also written trade mark or trade-mark) is a form of intellectual property that consists of a word, phrase, symbol, design, or a combination that identifies a product or service from a particular source and distinguishes it from ot ...

, in other countries. By April 30 of each year, the USTR must identify countries which do not provide "adequate and effective" protection of intellectual property rights or "fair and equitable market access to United States persons that rely upon intellectual property rights". The Special 301 Report is published pursuant to

Section 301 Section 301 of the U.S. Trade Act of 1974 (19 U.S.C.br>§ 2411 last amended March 23, 2018) authorizes the President to take all appropriate action, including tariff-based and non-tariff-based retaliation, to obtain the removal of any act, po ...

of the Trade Act of 1974 (, ) as amended by Section 1303 of the Omnibus Trade and Competitiveness Act of 1988. The Special 301 Report was first published in 1989. By statute, the annual Special 301 Report includes a list of "Priority Foreign Countries", that are judged to have inadequate intellectual property laws; these countries may be subject to sanctions. In addition, the report contains a "Priority Watch List" and a "Watch List", containing countries whose intellectual property regimes are deemed of concern.

Preparation

Special 301 Sub-Committee

The Special 301 Sub-Committee of the Trade Policy Staff Committee (TPSC) advises the United States Trade Representative on which countries to designate as "priority foreign countries" or to include in the watchlists. The Special 301 Sub-Committee is chaired by the

(USTR) and its members include the

Department of Commerce The United States Department of Commerce (DOC) is an United States federal executive departments, executive department of the Federal government of the United States, U.S. federal government. It is responsible for gathering data for business ...

, the Patent and Trademark Office, the

Department of State The United States Department of State (DOS), or simply the State Department, is an executive department of the U.S. federal government responsible for the country's foreign policy and relations. Equivalent to the ministry of foreign affairs ...

, the

Department of Health and Human Services The United States Department of Health and Human Services (HHS) is a cabinet-level executive branch department of the US federal government created to protect the health of the US people and providing essential human services. Its motto is ...

, the

Department of Agriculture An agriculture ministry (also called an agriculture department, agriculture board, agriculture council, or agriculture agency, or ministry of rural development) is a ministry charged with agriculture. The ministry is often headed by a minister f ...

, the Copyright Office, the

Council of Economic Advisers The Council of Economic Advisers (CEA) is a United States agency within the Executive Office of the President established in 1946, which advises the president of the United States on economic policy. The CEA provides much of the empirical resea ...

, and other agencies. U.S. companies provide extensive comments in the annual National Trade Estimate Report. The Special 301 Sub-Committee also takes the views of foreign governments and the views of U.S. embassies on

intellectual property rights Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, co ...

Complaints by U.S. companies

U.S. companies and

owners, including

and

, can submit complaints (i.e., a petition alleging that a country has violated an international agreement with the United States that adversely affects the company or industry) to the Trade Compliance Centre, which provides a template for such complaints, or the country or industry desk at the

International Trade Administration The International Trade Administration (ITA) is an agency in the United States Department of Commerce that promotes United States exports of nonagricultural U.S. goods and services. Duties The ITA's stated goals are to # Provide practical info ...

(ITA) of the U.S. Department of Commerce. The ITA then reviews trade-related complaints with co-operation from the Office of General Counsel and the U.S. Patent and Trademark Office. The complaint cannot be in relation to disputes between companies on

, but must be about instances where a country has violated an international agreement with the United States. Complaints can be made in relation to the intellectual property law of the country, judicial or administrative procedures that discriminate against the US company, and failure to enforce intellectual property laws, particularly in relation to trade in

counterfeit A counterfeit is a fake or unauthorized replica of a genuine product, such as money, documents, designer items, or other valuable goods. Counterfeiting generally involves creating an imitation of a genuine item that closely resembles the original ...

goods, and lately online

copyright infringement Copyright infringement (at times referred to as piracy) is the use of Copyright#Scope, works protected by copyright without permission for a usage where such permission is required, thereby infringing certain exclusive rights granted to the c ...

. Complaints do not need to reference specific international agreements or provisions that are being breached. Complaints will focus on a country's failure to protect the intellectual property rights of a US company or lack of intellectual property rights relates market access. Complaints are expected to include a description of the efforts the company has made to enforce its intellectual property rights in that country and provide estimates of economic losses resulting from the infringement of intellectual property rights in that country.Masterson (2004), p. 22 Most countries included in the ''Priority Watch List'' and ''Watch List'' between 1996 and 2000 were requested by

Pharmaceutical Research and Manufacturers of America Pharmaceutical Research and Manufacturers of America (PhRMA, pronounced ), formerly known as the Pharmaceutical Manufacturers Association, is an American trade group representing companies in the pharmaceutical industry. Founded in 1958, PhRMA ...

(PhRMA) or the

International Intellectual Property Alliance The International Intellectual Property Alliance (IIPA) is a coalition of five trade associations representing American companies that produce copyright-protected material, including computer software, films, television programs, music, books, and ...

(IIPA). According to Andres Guadamuz of the

University of Edinburgh The University of Edinburgh (, ; abbreviated as ''Edin.'' in Post-nominal letters, post-nominals) is a Public university, public research university based in Edinburgh, Scotland. Founded by the City of Edinburgh Council, town council under th ...

, the IIPA, which represents the U.S. media industry, urged the U.S. government to consider countries like

Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania, between the Indian Ocean, Indian and Pacific Ocean, Pacific oceans. Comprising over List of islands of Indonesia, 17,000 islands, including Sumatra, ...

Brazil Brazil, officially the Federative Republic of Brazil, is the largest country in South America. It is the world's List of countries and dependencies by area, fifth-largest country by area and the List of countries and dependencies by population ...

, and

India India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...

for inclusion in the Special 301 Watchlist in early 2010 because they either mandated or suggested the use of

open-source Open source is source code that is made freely available for possible modification and redistribution. Products include permission to use and view the source code, design documents, or content of the product. The open source model is a decentrali ...

software.When using open source makes you an enemy of the state
Bobbie Johnson, guardian.co.uk, 23 February 2010.

NGO submissions

In 2010, NGOs such as PhRMA,

Oxfam Oxfam is a British-founded confederation of 21 independent non-governmental organizations (NGOs), focusing on the alleviation of global poverty, founded in 1942 and led by Oxfam International. It began as the Oxford Committee for Famine Relief ...

, and MSF made submissions to the USTR.

Designations

Priority Foreign Country

A ''Priority Foreign Country'' is the worst classification given to ''"foreign countries that deny "adequate and effective" protection of

(IPR) or "fair and equitable market access" to U.S. persons relying upon IPR protection"'' under the Trade Act. On 13 March 2001, the

United States Trade Representative The Office of the United States Trade Representative (USTR) is an agency of the Federal government of the United States, United States federal government responsible for developing and promoting Foreign trade of the United States, United States ...

designated

Ukraine Ukraine is a country in Eastern Europe. It is the List of European countries by area, second-largest country in Europe after Russia, which Russia–Ukraine border, borders it to the east and northeast. Ukraine also borders Belarus to the nor ...

as a Priority Foreign Countr

citing the massive amounts of unlicensed CDs sold in Europe that originate in Ukraine. In 2011 and 2012, no countries were classified as a Priority Foreign Country; however, Paraguay was made subject to Section 306 Monitoring. In 2013, Ukraine was redesignated as a Priority Foreign Country. In 2014, the US was in talks with the WTO to designate India as a "Priority Foreign Country" especially for the pharmaceutical sector. Under the amended

of the Trade Act of 1974 the USTR must by April 30 of each year:

"identify (1) those foreign countries that (A) deny adequate and effective protection of intellectual property rights, or (B) deny fair and equitable markets access to United States persons that rely upon intellectual property protection, and (2) those foreign countries identified under paragraph (1) that are determined by the Trade Representative to be priority foreign countries".Masterson (2004), p. 18Masterson (2004), p. 19

The Act defines "priority foreign countries" as:

"those foreign countries - (A) that have the most onerous or egregious acts, policies, or practices that (i) deny adequate and effective intellectual property rights, or (ii) deny fair and equitable market access to United States persons that rely upon intellectual property protection, (B) whose acts, policies, or practices described in subparagraph (A) have the greatest adverse impact (actual or potential) on the relevant United States products, and (C) that are not (i) entering into good faith negotiations, or (ii) making significant progress in bilateral or multilateral negotiations to provide adequate and effective protection of intellectual property rights".

The Uruguay Round Agreement Act furthermore states that countries may be identified under Special 301 "taking into account the history of intellectual property laws and practices of the foreign country, including any previous identifications" and "the history of efforts of the United States, and the response of the foreign country, to achieve adequate and effective protection and enforcement of intellectual property rights". It also states that compliance with the

World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization headquartered in Geneva, Switzerland that regulates and facilitates international trade. Governments use the organization to establish, revise, and enforce the rules that g ...

Agreement on Trade-Related Aspects of Intellectual Property Rights The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement, international legal agreement between all the member nations of the World Trade Organization (WTO). It establishes minimum standards f ...

(TRIPS) does not preclude a country from being identified as denying "adequate and effective protection of intellectual property rights". The USTR acts on the information available at the time and can identify new "priority foreign countries" on an annual basis. The Special 301 Sub-Committee conducts additional reviews throughout the year for countries that "merit additional monitoring". The Trade Act of 1974 requires that the USTR to start investigations within 30 days of a country being identified as "priority foreign country", unless the USTR concludes that such an investigation "would be detrimental to United States economic interests". Unless the "priority foreign country" is regarded as being in breach of a trade agreement, including the

(TRIPS), investigations must conclude within six months, with the possibility of a three-month extension. Reasons for extension include "substantial progress in drafting or implementing legislative or administrative measures that will provide adequate and effective protection of intellectual property rights" by the "priority foreign country".Masterson (2004), p. 20 If the USTR believes that a trade agreement is being breached the USTR must conclude the investigation within 18 months, or within 30 days after the "dispute settlement procedure" has finished. If the USTR concludes that a trade agreement is being breached, "retaliation actions" may be taken under Section 301 of the Trade Act of 1974.

Priority Watch List and Watch List Countries

Two non-statutory categories have been created in addition to the statutory category of "priority foreign country", which once identified as such needs to be investigated and if found in breach with a trade agreement is subject to possible "retaliation actions" under

of the Trade Act of 1974. "Priority Watch List" and "Watch List" countries are identified by the annual Special 301 Report. "Priority Watchlist countries" are judged by the USTR as having "serious intellectual property rights deficiencies" that require increased USTR attention. "Watch List" countries have been identified by the USTR as having "serious intellectual property rights deficiencies" but are not yet placed on the "Priority Watchlist". The USTR can move countries from one list to the other, or remove them from the lists, throughout the year.

Historical designations

The

keeps these . * PFC: Priority Foreign Country * PWL: Priority Watch List * WL: Watch list * Monitoring: Section 306 Monitoring * Pending: Status Pending * *: Indicates a change in categorisation

Consequences

In response to countries being included on the Special 301 Report Watchlists the U.S. government may initiate dispute settlement proceedings at the

(WTO) or other relevant trade agreement, including the

North American Free Trade Agreement The North American Free Trade Agreement (, TLCAN; , ALÉNA), referred to colloquially in the Anglosphere as NAFTA, ( ) was an agreement signed by Canada, Mexico, and the United States that created a trilateral trade bloc in North America. The ...

(NAFTA). The U.S. government can also eliminate tariff preferences unilaterally granted, such as the

Generalized System of Preferences The Generalized System of Preferences, or GSP, is a preferential tariff system which provides tariff reduction on various products. The concept of GSP is very different from the concept of " most favored nation" (MFN). MFN status provides equal tr ...

(GSP).Masterson (2004), p. 21 If an USTR investigation concludes that a country has violated a trade agreement

allows the U.S. government to impose

unilateral __NOTOC__ Unilateralism is any doctrine or agenda that supports one-sided action. Such action may be in disregard for other parties, or as an expression of a commitment toward a direction which other parties may find disagreeable. As a word, ''un ...

trade sanctions if the country is not a member of the

(WTO) or any other trade agreement establishing dispute settlement provisions, such as free trade agreements, which are relevant to the alleged violation. Unilateral trade sanctions under section 301 were imposed on December 20, 2001, on

, which was not yet a WTO member, by imposing a prohibitive tariff on metals, footwear, and other imports because the USTR concluded that the country had failed to enact legislation to enforce copyright in relation to music

CDs CDS, CDs, Cds, etc. may refer to: Finance * Canadian Depository for Securities, Canadian post-trade financial services company * Certificate of deposit (CDs) * Counterfeit Deterrence System, developed by the Central Bank Counterfeit Deterrence ...

and their export. Section 301 was also invoked by

President Trump Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who is the 47th president of the United States. A member of the Republican Party, he served as the 45th president from 2017 to 2021. ...

in March 2018, setting off the

2018 China–United States trade dispute Eighteen or 18 may refer to: * 18 (number) * One of the years 18 BC, AD 18, 1918, 2018 Film, television and entertainment * ''18'' (film), a 1993 Taiwanese experimental film based on the short story ''God's Dice'' * ''Eighteen'' (film), a 2 ...

. According to the

(IIPA) the Special 301 Report and the Watchlists is used to pressure other nations to adopt stricter copyright laws and take a more active role in combating

WTO dispute settlement proceedings

The USTR has used the Special 301 Reports to initiate formal dispute settlement proceedings at the

(WTO) if it believes a country does not comply with the

(TRIPS). WTO dispute settlement proceedings are initiated when the country's noncompliance with TRIPS is judged to be too narrow to make the country a "priority foreign country". The countries against which the USTR intends to pursue dispute settlement proceedings are announced every April in the Special 301 Report.

Criticism

Lobbying power

Peter Drahos, a law professor at the Centre for Commercial Law Studies at

Queen Mary University of London Queen Mary University of London (QMUL, or informally QM, and formerly Queen Mary and Westfield College) is a public university, public research university in Mile End, East London, England. It is a member institution of the federal University ...

's School of Law, has called the Special 301 Report "a public law devoted to the service of private corporate interests". It protects and acts in favor of U.S.

owners, most often large corporations, against any foreign national policy or unofficial action that does not conform to the United States' position on international copyright and IP. Threat of action under Special 301 has been used to insert U.S. trade lobby backed advisers into states' domestic legislative process in order to ensure compliance with U.S. trade norms. One of the most direct examples comes from a former U.S. trade lobbyist, speaking in 1993:

"
Jamaica Jamaica is an island country in the Caribbean Sea and the West Indies. At , it is the third-largest island—after Cuba and Hispaniola—of the Greater Antilles and the Caribbean. Jamaica lies about south of Cuba, west of Hispaniola (the is ...
had no intellectual property law, but they wrote one (with our help). Similarly the Dominican Republic. I sat down with their lawyer and together we wrote their copyright law."

On the other hand, according to the

Electronic Frontier Foundation The Electronic Frontier Foundation (EFF) is an American international non-profit digital rights group based in San Francisco, California. It was founded in 1990 to promote Internet civil liberties. It provides funds for legal defense in court, ...

(EFF), concerns about foreign IP policies that are overly restrictive, such as a lack of

fair use Fair use is a Legal doctrine, doctrine in United States law that permits limited use of copyrighted material without having to first acquire permission from the copyright holder. Fair use is one of the limitations to copyright intended to bal ...

in some countries, are not included in Special 301 reports.

Trade warring

Most countries included in the ''Priority Watch List'' and ''Watch List'' between 1996 and 2000 were requested by

. For example, Finland was blacklisted in retaliation to unanimously adopted legislation requiring the tax-funded Social Insurance Institution to reimburse the cost of medications only up to the price of the cheapest generic. Intellectual property is not violated, as this affects all manufacturers equally; nevertheless, this retaliatory measure has had a negative impact on investment decisions unrelated to the pharmaceutical industry.

Bibliography

References

External links

*
Special 301 Report, 2016
published on April 30, 2016 * *{{cite web , url=http://keionline.org/ustr/special301 , title=The US Special 301 Reports, 1989-2010 , publisher=Knowledge Ecology International , work=USTR (alongside supporting documents)

1989 establishments in the United States Trade Representative United States trade law United States trade policy United States copyright law Intellectual property law Monopoly (economics)