Termination of Section 301 Investigation and Action Regarding the People's Republic of China's Protection of Intellectual Property and Provision and Market Access to Persons Who Rely on Intellectual Property Protection

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. 301-92]

Termination of Section 301 Investigation and Action Regarding the

People's Republic of China's Protection of Intellectual Property and

Provision and Market Access to Persons Who Rely on Intellectual

Property Protection

AGENCY: Office of the United States Trade Representative.

ACTION: Termination of investigation of certain acts, policies and

practices of the Peoples' Republic of China (China) initiated under

section 302 of the Trade Act of 1974, as amended (Trade Act);

termination of action pursuant to section 301 of the Trade Act;

monitoring of trade agreement under section 306 of the Trade Act;

revocation of priority foreign country identification under section

182(c)(1)(B) of the Trade Act; and requests for public comment.

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SUMMARY: On February 4, 1995, the United States Trade Representative

(USTR) determined pursuant to section 304(a)(1)(A) of the Trade Act

that certain acts, policies and practices of China with respect to the

enforcement of intellectual property rights and the provision of market

access to persons who rely on intellectual property protection are

unreasonable and constitute a burden or restriction on U.S. commerce.

The USTR also determined pursuant to section 304(a)(1)(B) and 301(b)

that action in the form of increasing duties on certain products of

China to 100 percent ad valorem was appropriate. 60 FR 7230 (February

7, 1995). Having reached a satisfactory resolution of the issues under

investigation, the USTR has determined to: (1) Terminate this section

301 investigation; (2) monitor implementation of the agreement under

section 306 of the Trade Act; (3) terminate the action ordered pursuant

to section 301 with respect to raising tariffs on certain products

originating in China; and (4) revoke China's identification as a

priority foreign country under section 182 of the Trade Act. Public

comments will be accepted on the decision to terminate the action

ordered pursuant to section 301.

EFFECTIVE DATE: The modification of the Harmonized Tariff Schedule of

the United States (HTS) described below is effective with respect to

imports entered, or withdrawn from warehouse for consumption, on or

after February 26, 1995. The determinations to terminate the action

taken under section 301 and revoke China's status as a priority foreign

country were made by the USTR on February 26, 1995. Written comments

from interested persons are due by noon on Friday, March 10, 1995.

ADDRESSES: Section 301 Committee, Office of the United States Trade

Representative, Room 223, 600 17th Street, NW., Washington, D.C. 20506.

FOR FURTHER INFORMATION CONTACT:

Deborah Lehr, Director for China and Mongolian Affairs (202) 395-5050,

or Thomas Robertson, Assistant General Counsel (202) 395-6800.

SUPPLEMENTARY INFORMATION: On June 30, 1994, China was identified as a

priority foreign country under the ``special 301'' provisions of the

Trade Act for its failure to enforce intellectual property rights or to

provide fair and equitable market access to persons who rely on

intellectual property protection. On the same day, the USTR initiated

an investigation of those acts, policies and practices of China that

were the basis for its identification as a priority foreign country

(PFC) under section 182(c)(1)(B) of the Trade Act. 59 FR 35558 (July

12, 1994).

On December 31, 1994, the USTR extended the investigation until

February 4, 1995, and sought public comment on proposed determinations

under section 304(a)(1). 60 FR 1829 (January 5, 1995). On February 4,

1995, the USTR determined that the acts, policies and practices of the

Chinese government at issue in the investigation are unreasonable and

constitute a burden or restriction on U.S. commerce. The USTR also

determined that the appropriate action in response was to impose duties

of 100 percent ad valorem on certain Chinese-origin products that were

entered, or withdrawn from warehouse for consumption, on or after

February 26, 1995. 60 FR 7230 (February 7, 1995).

After extensive negotiations, the United States and China entered

into an exchange of letters (including an Action Plan for the Effective

Protection and Enforcement of Intellectual Property Rights) by which

China will address the issues raised by the United States in the

negotiations. Under the agreement, China will, among other things,

establish a system at the central, provincial and local levels to

provide strong, transparent and responsive enforcement of intellectual

property rights; initiate a special enforcement period during which

enhanced resources will be allocated to the enforcement of intellectual

property rights; establish an effective border enforcement regime;

ensure the transparency of its legal regime, [[Page 12583]] including

the publication of all laws and regulations concerning intellectual

property protection; and provide U.S. right holders with enhanced

access to the Chinese market. The United States and China will consult

regularly on China's implementation of the agreement.

On the basis of the measures that China has agreed to undertake in

the agreement, the USTR has decided that the action taken pursuant to

section 301(b) (the increase in tariffs on certain products from China)

is no longer appropriate and should be terminated. The United States

Custom Service has been notified of this determination. Pursuant to

section 182(c)(1)(A) of the Trade Act, the USTR has also decided to

revoke China's designation as a priority foreign country.

Section 307(a)(1)(C) of the Trade Act authorizes the USTR to

terminate any action, subject to the specific direction, if any, of the

President, if, inter alia, the USTR determines that the action being

taken under section 301(b) of the Trade Act is no longer appropriate.

Prior to terminating this 301 action, the USTR consulted with the

domestic industries concerned regarding the modification and

termination of the existing action. An opportunity for public comment

prior to this action was not possible in view of the need for

expeditious action. Immediate termination of the 301 action was

required so that U.S. intellectual property right holders could

immediately start to receive the benefits of the agreement entered into

with China. However, interested members of the public are now invited

to submit comments to USTR regarding this action in accordance with the

directions provided below. USTR will review these comments upon

receipt.

Pursuant to section 306 of the Trade Act, the USTR will monitor

China's implementation of the agreement. If, on the basis of this

monitoring, the USTR considers that China is not satisfactorily

implementing the terms of the agreement, the USTR will decide what

further action to take under section 301(a) of the Trade Act.

Public Comments

Comments must be filed in accordance with the requirements set

forth in 15 CFR 2006.8(b) and are due no later than noon, Friday, March

10, 1995. Comments must be in English and be provided in twenty copies

to: Chairman, section 301 Committee, Room 223, USTR, 600 17th Street,

N.W., Washington, D.C. 20506.

Comments will be placed in a file [Docket 301-92] open to public

inspection pursuant to 15 CFR 2006.13, except confidential business

information exempt from public inspection in accordance with 15 CFR

2006.15. Confidential business information submitted in accordance with

15 CFR 2006.15 must be clearly marked ``Business Confidential'' in a

contrasting color ink at the top of each page (on each of the 20

copies), and must be accompanied by a nonconfidential summary of the

confidential information. The nonconfidential summary shall be placed

in the docket open to public inspection.

Modification of the Harmonized Tariff Schedule of the United States

(HTS)

Accordingly, the HTS is hereby modified by deleting subheadings

9903.50.01 through 9903.50.33, inclusive, and the superior text

immediately preceding such subheadings, effective February 26, 1995.

Irving A. Williamson,

Chairman, Section 301 Committee.

[FR Doc. 95-5664 Filed 3-6-95; 8:45 am]

BILLING CODE 3190-01-M