Initiation of Section 302 Investigation, Proposed Determinations and Action, and Request for Public Comment: Honduran Protection of Intellectual Property Rights

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. 301-116]

Initiation of Section 302 Investigation, Proposed Determinations

and Action, and Request for Public Comment: Honduran Protection of

Intellectual Property Rights

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of initiation of investigation; proposed determination

and action; request for public comment; and public hearing.

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SUMMARY: The Trade Policy Staff Committee (TPSC) has determined that

the Government of Honduras has failed to provide adequate and effective

means under its laws for foreign nationals to secure, exercise and

enforce exclusive rights in intellectual property and has recommended

that the duty-free treatment accorded Honduras under the Generalized

System of Preferences (GSP) and the Caribbean Basin Initiative (CBI)

programs be partially withdrawn. In light of the foregoing, the United

States Trade Representative (USTR) is initiating an investigation under

section 302(b) of the Trade Act of 1974, as amended (the ``Trade Act'')

with regard to acts, policies, and practices of the Government of

Honduras with respect to the protection of intellectual property

rights, and proposes to determine that these acts, policies and

practices are actionable under section 301(b) and that the appropriate

response is a partial suspension of tariff preference benefits

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accorded to Honduras under the GSP and CBI programs. The annex to this

notice sets forth a list of articles of Honduras which could be subject

to the suspension of tariff preference benefits. The USTR invites

interested persons to submit written comments and to participate in a

public hearing concerning the proposed determinations and action.

DATES: This investigation was initiated on October 31,1997. Requests to

appear at the public hearing are due November 14, 1997; written

testimony is due November 24, 1997; a public hearing will be held on

December 4, 1997; and written comments and rebuttal comments are due

December 10, 1997.

ADDRESSES: Written submissions should be sent to Sybia Harrison, Staff

Assistant to the Section 301 Committee, ATTN: Docket 301-116, Room 223,

Office of the United States Trade Representative, 600 17th Street, NW,

Washington, DC 20508. The public hearing will be held in the main

hearing room of the United States International Trade Commission, 500 E

Street, SW, Washington, DC 20436.

FOR FURTHER INFORMATION CONTACT: David Morrissy, Office of Trade and

Development, Office of the United States Trade Representative, (202)

395-6971, or William Busis, Office of the General Counsel, Office of

the United States Trade Representative, (202) 395-3150.

SUPPLEMENTARY INFORMATION: In June 1992 the Motion Picture Export

Association of America (subsequently renamed the Motion Picture

Association) filed a petition under the GSP program alleging that

Honduras had failed to provide adequate and effective copyright

protection and enforcement of rights of copyright owners. The petition

alleged wide-spread unauthorized broadcasting of pirated videos and the

rebroadcasting of U.S. satellite-carried programming. In addition to

these problems, the Government of Honduras has not provided adequate

copyright protection for books and sound recordings.

Since the receipt of the GSP petition, the United States has held

extensive consultations with the Government of Honduras regarding its

failure to provide adequate and effective protection of intellectual

property rights. As a result of these consultations, the Honduran

government has, in the past, provided assurances that enforcement of

intellectual property rights protection laws would improve.

However, the United States has seen a continuing lack of

enforcement of copyright in Honduras. In May of 1997 the TPSC

determined that the Government of Honduras had failed to provide

adequate and effective means under its laws for foreign nationals to

secure, exercise and enforce exclusive rights in intellectual property,

and recommended that the duty-free treatment accorded Honduras under

the GSP and CBI programs be partially withdrawn in four months if these

problems were not remedied. (See 62 FR 28915 of May 28, 1997.) In the

intervening period, the United States Government has consulted with the

Government of Honduras regarding this matter. Despite being notified of

continuing and serious U.S. concerns and possible action by the U.S.

Government in response, the Government of Honduras has still failed to

take sufficient action against continuing and blatant copyright piracy.

For example, recent reports indicate that three major television

stations in Honduras continue to violate the rights of U.S. copyright

owners.

Initiation of Section 302 Investigation

Section 302(b)(1) of the Trade Act (19 U.S.C. 2412(b)(1))

authorizes the USTR to initiate an investigation under Chapter 1 of

Title III of the Trade Act (commonly referred to as ``section 301'')

with respect to any matter to determine whether the matter is

actionable under this provision. Under section 301(b)(1) of the Trade

Act, matters actionable under section 301 include acts, policies, or

practices of a foreign country that are unreasonable and burden or

restrict U.S. commerce. Under section 301(d)(3)(B)(II) of the Trade

Act, unreasonable acts, policies or practices include any act, policy

or practice which denies fair and equitable provision of adequate and

effective protection of intellectual property rights.

Accordingly, the United States Trade Representative, having

consulted with the appropriate private sector advisory committees, has

determined to initiate an investigation under section 302(b)(1) of the

Trade Act to determine whether certain acts, policies, and practices of

Honduras with regard to the protection of intellectual property rights

are actionable under section 301(b)(1) of the Trade Act.

Proposed Determinations and Action

Based on the failure of the Government of Honduras to provide

adequate protection of intellectual property rights, the USTR proposes

to determine under sections 304(a)(1)(A) and 301(b) of the Trade Act

that the acts, policies, and practices of Honduras with respect to the

protection of intellectual property rights are unreasonable and burden

or restrict United States commerce, and that action by the United

States is appropriate.

Section 301(b)(2) of the Trade Act authorizes the USTR to take all

appropriate and feasible action authorized under section 301(c) to

obtain the elimination of the actionable acts, policies, or practices.

Section 301(c)(1)(C) provides that in a case in which the act, policy,

or practice also fails to meet the eligibility requirements for duty-

free treatment under the GSP program or CBI program, the USTR may

withdraw, limit or suspend such treatment under the GSP or CBI

programs.

The GSP program includes an eligibility requirement concerning the

extent to which the foreign country provides adequate and effective

protection of intellectual property rights (section 502(c)(5) of the

Trade Act (19 U.S.C. 2462(c)(5))). The CBI program also includes

eligibility requirements concerning the extent to which the foreign

country provides under its laws adequate and effective means for

foreign nationals to secure, exercise, and enforce exclusive rights in

intellectual property, and the extent to which the foreign country

prohibits its nationals from engaging in the broadcast of copyrighted

material belonging to United States copyright owners without their

express consent (section 212(c)(9) and (10) of the Caribbean Basin

Economic Recovery Act, as amended (19 U.S.C. 2712(c)(9) and (10)).

Based on the failure of the Government of Honduras to provide adequate

protection of intellectual property rights, the USTR proposes to

determine that Honduras fails to meet these eligibility requirements of

the CBI and GSP programs.

Accordingly, under section 304(a)(1)(B) and 301(c)(1)(C) of the

Trade Act, the USTR proposes to suspend duty-free treatment accorded

certain products from Honduras under the GSP and CBI programs. In

particular, the USTR is proposing to suspend GSP and CBI duty-free

benefits for certain articles of Honduras, to be chosen from among the

articles listed in the annex to this notice. After considering comments

received and the testimony presented, the USTR will decide which of the

articles listed in the annex will be subject to suspension of duty-free

treatment under the GSP and CBI programs.

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Written Comments and Public Hearing Regarding Proposed Determinations

and Action

In accordance with section 304(b) of the Trade Act, the USTR

invites interested persons to provide written comments on the matters

under investigation and the proposed determinations. With respect to

the proposed action under section 301, comments may address: (1) the

appropriateness of a suspension of GSP and CBI benefits with respect to

articles of Honduras listed in the annex to this notice; (2) the

specific articles from the list in the annex which should be subject to

suspension of GSP and CBI duty-free treatment; and (3) the degree to

which such suspension of duty-free treatment on particular articles of

Honduras might have an adverse effect on U.S. consumers. Written

comments are due by December 10, 1997.

A public hearing addressed to these same issues will be held on

December 4, 1997, in the main hearing room of the United States

International Trade Commission, 500 E Street, SW, Washington, DC 20436.

Interested persons wishing to testify orally at the hearings must

provide a written request by November 14, 1997, to Sybia Harrison,

Staff Assistant to the Section 301 Committee, Office of the U.S. Trade

Representative, 600 17th Street NW, Washington, DC 20508. Requests to

testify must include the following information: (1) name, address,

telephone number, fax number, and firm or affiliation of the person

wishing to testify; and (2) a brief summary of the comments to be

presented. Requests to testify must conform to the requirements of 15

CFR 2006.8(a). After the Chairman of the Section 301 Committee

considers the request to present oral testimony, Ms. Harrison will

notify the applicant of the time of his or her testimony. In addition,

persons presenting oral testimony must submit their complete written

testimony by November 24, 1997.

In order to allow each interested party an opportunity to contest

the information provided by other parties at the hearing, USTR will

accept written rebuttal comments, which must be filed by December 10,

1997. In accordance with 15 CFR 2006.8(c), rebuttal comments should be

limited to demonstrating errors of fact or analysis not pointed out in

the briefs or hearing and should be as concise as possible.

Written comments, written testimony, and rebuttal comments must be

filed in accordance with the requirements set forth in 15 CFR

2006.8(b). Comments must state clearly the position taken, describe

with particularity the supporting rationale, be in English, and be

provided in twenty copies to: Sybia Harrison, Staff Assistant to the

Section 301 Committee, ATTN: Docket 301-116, Room 223, Office of the

United States Trade Representative, 600 17th Street, NW, Washington, DC

20508.

All written submissions will be placed in a file (Docket 301-116)

open to public inspection pursuant to 15 CFR 2006.13, except for

confidential business information exempt from public inspection in

accordance with 15 CFR 2006.15. Persons wishing to submit confidential

business information must certify in writing that such information is

confidential in accordance with 15 CFR 2006.15(b), and such information

must be clearly marked ``Business Confidential'' in a contrasting color

ink at the top of each page on each of the twenty copies and must be

accompanied by a nonconfidential summary of the confidential

information. The nonconfidential summary will be placed in the Docket

open to public inspection. An appointment to review the docket may be

made by calling Brenda Webb at (202) 395-6186. The USTR Reading Room is

open to the public from 9:30 a.m. to 12 noon and 1:00 p.m. to 4:00

p.m., Monday through Friday, and is located in Room 101, Office of the

United States Trade Representative, 600 17th Street, NW, Washington, DC

20508.

Irving A. Williamson,

Chairman, Section 301 Committee.

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[FR Doc. 97-29502 Filed 11-4-97; 3:25 pm]

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