Actions by the United States Related to the Section 301 Investigation of China's Laws, Policies, Practices, or Actions Related to Technology Transfer, Intellectual Property, and Innovation

[Federal Register Volume 83, Number 59 (Tuesday, March 27, 2018)]

[Presidential Documents]

[Pages 13099-13101]

From the Federal Register Online via the Government Publishing Office [www.gpo.gov]

[FR Doc No: 2018-06304]

Presidential Documents

Federal Register / Vol. 83, No. 59 / Tuesday, March 27, 2018 /

Presidential Documents

[[Page 13099]]

Memorandum of March 22, 2018

Actions by the United States Related to the

Section 301 Investigation of China's Laws, Policies,

Practices, or Actions Related to Technology Transfer,

Intellectual Property, and Innovation

Memorandum for the Secretary of the Treasury, the

United States Trade Representative, the Senior Advisor

for Policy, the Assistant to the President for Economic

Policy, the Assistant to the President for National

Security Affairs, and the Assistant to the President

for Homeland Security and Counterterrorism

On August 14, 2017, I directed the United States Trade

Representative (Trade Representative) to determine

whether to investigate China's laws, policies,

practices, or actions that may be unreasonable or

discriminatory and that may be harming American

intellectual property rights, innovation, or technology

development. On August 18, 2017, the Trade

Representative initiated an investigation under section

301 of the Trade Act of 1974, as amended (the ``Act'')

(19 U.S.C. 2411).

may be unreasonable or

discriminatory and that may be harming American

intellectual property rights, innovation, or technology

development. On August 18, 2017, the Trade

Representative initiated an investigation under section

301 of the Trade Act of 1974, as amended (the ``Act'')

(19 U.S.C. 2411).

During its investigation, the Office of the United

States Trade Representative (USTR) consulted with

appropriate advisory committees and the interagency

section 301 Committee. The Trade Representative also

requested consultations with the Government of China,

under section 303 of the Act (19 U.S.C. 2413). The USTR

held a public hearing on October 10, 2017, and two

rounds of public written comment periods. The USTR

received approximately 70 written submissions from

academics, think tanks, law firms, trade associations,

and companies.

The Trade Representative has advised me that the

investigation supports the following findings:

First, China uses foreign ownership restrictions,

including joint venture requirements, equity

limitations, and other investment restrictions, to

require or pressure technology transfer from U.S.

companies to Chinese entities. China also uses

administrative review and licensing procedures to

require or pressure technology transfer, which, inter

alia, undermines the value of U.S. investments and

technology and weakens the global competitiveness of

U.S. firms.

e technology transfer from U.S.

companies to Chinese entities. China also uses

administrative review and licensing procedures to

require or pressure technology transfer, which, inter

alia, undermines the value of U.S. investments and

technology and weakens the global competitiveness of

U.S. firms.

Second, China imposes substantial restrictions on, and

intervenes in, U.S. firms' investments and activities,

including through restrictions on technology licensing

terms. These restrictions deprive U.S. technology

owners of the ability to bargain and set market-based

terms for technology transfer. As a result, U.S.

companies seeking to license technologies must do so on

terms that unfairly favor Chinese recipients.

Third, China directs and facilitates the systematic

investment in, and acquisition of, U.S. companies and

assets by Chinese companies to obtain cutting-edge

technologies and intellectual property and to generate

large-scale technology transfer in industries deemed

important by Chinese government industrial plans.

[[Page 13100]]

Fourth, China conducts and supports unauthorized

intrusions into, and theft from, the computer networks

of U.S. companies

ge

technologies and intellectual property and to generate

large-scale technology transfer in industries deemed

important by Chinese government industrial plans.

[[Page 13100]]

Fourth, China conducts and supports unauthorized

intrusions into, and theft from, the computer networks

of U.S. companies. These actions provide the Chinese

government with unauthorized access to intellectual

property, trade secrets, or confidential business

information, including technical data, negotiating

positions, and sensitive and proprietary internal

business communications, and they also support China's

strategic development goals, including its science and

technology advancement, military modernization, and

economic development.

It is hereby directed as follows:

Section 1. Tariffs. (a) The Trade Representative should

take all appropriate action under section 301 of the

Act (19 U.S.C. 2411) to address the acts, policies, and

practices of China that are unreasonable or

discriminatory and that burden or restrict U.S.

commerce. The Trade Representative shall consider

whether such action should include increased tariffs on

goods from China.

n under section 301 of the

Act (19 U.S.C. 2411) to address the acts, policies, and

practices of China that are unreasonable or

discriminatory and that burden or restrict U.S.

commerce. The Trade Representative shall consider

whether such action should include increased tariffs on

goods from China.

(b) To advance the purposes of subsection (a) of

this section, the Trade Representative shall publish a

proposed list of products and any intended tariff

increases within 15 days of the date of this

memorandum. After a period of notice and comment in

accordance with section 304(b) of the Act (19 U.S.C.

2414(b)), and after consultation with appropriate

agencies and committees, the Trade Representative

shall, as appropriate and consistent with law, publish

a final list of products and tariff increases, if any,

and implement any such tariffs.

Sec. 2. WTO Dispute Settlement. (a) The Trade

Representative shall, as appropriate and consistent

with law, pursue dispute settlement in the World Trade

Organization (WTO) to address China's discriminatory

licensing practices. Where appropriate and consistent

with law, the Trade Representative should pursue this

action in cooperation with other WTO members to address

China's unfair trade practices.

with law, pursue dispute settlement in the World Trade

Organization (WTO) to address China's discriminatory

licensing practices. Where appropriate and consistent

with law, the Trade Representative should pursue this

action in cooperation with other WTO members to address

China's unfair trade practices.

(b) Within 60 days of the date of this memorandum,

the Trade Representative shall report to me his

progress under subsection (a) of this section.

Sec. 3. Investment Restrictions. (a) The Secretary of

the Treasury (Secretary), in consultation with other

senior executive branch officials the Secretary deems

appropriate, shall propose executive branch action, as

appropriate and consistent with law, and using any

available statutory authority, to address concerns

about investment in the United States directed or

facilitated by China in industries or technologies

deemed important to the United States.

[[Page 13101]]

(b) Within 60 days of the date of this memorandum,

the Secretary shall report to me his progress under

subsection (a) of this section.

Sec. 4. Publication. The Trade Representative is

authorized and directed to publish this memorandum in

the Federal Register.

(Presidential Sig.)

THE WHITE HOUSE,

Washington, March 22, 2018

[FR Doc. 2018-06304

Filed 3-26-18; 8:45 am]

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