[Federal Register Volume 60, Number 3 (Thursday, January 5, 1995)]
[Notices]
[Pages 1829-1843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-261]



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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. 301-92]


Extension of 301 Investigation of the People's Republic of 
China's Protection of Intellectual Property and Provision of Market 
Access to Persons Who Rely on Intellectual Property Protection; 
Proposed Determinations; Request for Public Comment; and Notice of 
Public Hearing

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of determination under section 304(a)(3)(b) of the Trade 
Act of 1974, as amended (Trade Act), 19 U.S.C. 2414(a)(3)(B), to extend 
the investigation of the acts, policies and practices of the Government 
of the People's Republic of China (China) on the enforcement of 
intellectual property rights and the provision of market access to 
persons who rely on intellectual property protection; notice of 
proposed determination pursuant to section 304(a)(1) of the Trade Act, 
19 U.S.C. 2414; request for public comment pursuant to section 304(b) 
of the Trade Act on the proposed determinations; notice of public 
hearing.

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SUMMARY: Pursuant to section 304(a)(3)(B) of the Trade Act, the United 
States Trade Representative (USTR) has determined to extend the 
investigation initiated under section 302(b)(2)(A) of the Trade Act of 
certain acts, policies and practices of China that deny adequate and 
effective protection of intellectual property rights and market access 
to person who rely on intellectual property protection. The USTR is 
seeking public comment concerning a proposed determination that certain 
acts, policies and practices of China with respect to its protection of 
intellectual property and 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 is also 
seeking public comment and will hold a public hearing on January 24 and 
25, 1995, regarding a determination on appropriate action under section 
301 being considered in response to these acts, policies and practices.

EFFECTIVE DATE: The investigation is extended, through Saturday, 
February 4, 1995. Written comments on the proposed determinations are 
due by noon Monday, January 30, 1995. Requests to testify at the 
hearing must be submitted by noon Friday, January 13, 1995; written 
testimony is due by [[Page 1830]] noon Wednesday, January 18, 1995; and 
written rebuttals are due by noon Friday, January 27, 1995.

FOR FURTHER INFORMATION CONTACT:
Questions concerning the ongoing investigation or the products under 
consideration should be directed to Deborah Lehr, Director for China 
and Mongolian Affairs (202) 395-5050, or Thomas Robertson, Assistant 
General Counsel (202) 395-6800; questions about the public hearing, 
written testimony and written comments should be directed to Sybia 
Harrison, Staff Assistant to Section 301 Committee, (202) 395-3432. All 
of the above persons are located at the Office of the United States 
Trade Representative, 600 17th Street, NW., Washington, DC 20506.

SUPPLEMENTARY INFORMATION: On June 30, 1994, pursuant to section 302(b) 
of the Trade Act, the USTR initiated an investigation of those acts, 
policies and practices of China that were the basis for identification 
of China as a priority foreign country (PFC) under section 182 of the 
Trade Act. See 59 FR 35558 (July 12 1994). China's identification as a 
PFC was primarily based on its failure to create an effective 
intellectual property enforcement regime, causing rampant copyright 
piracy and trademark infringement resulting in significant damage to 
U.S. interests. Appropriate implementation of China's new patent law 
and administrative protection program for pharmaceuticals and 
agricultural chemicals was also of concern. Particular problems with 
China's present enforcement regime include, among other things, 
internally inconsistent laws; a lack of transparency in the enforcement 
structure; a lack of protection for existing works; gaps in 
responsibility in the enforcement structure; a lack of consistent 
application of the laws throughout the central, provincial and local 
governments; a lack of funding, training and education; conflicts of 
interest; burdensome and discriminatory agency requirements that 
restrict foreign access to trademark protection; overly-broad 
compulsory licensing provisions; a failure of enforcement authorities 
to coordinate; and the absence of an effective border control 
mechanism.
    China's identification as a PFC was also based on its failure to 
provide fair and equitable market access for persons who rely on 
intellectual property protection. The most serious market access 
problems are found in the areas of audiovisual products, sound 
recordings, and published written materials. Particular concerns 
include a hidden system of internal quotas, a lack of transparency, a 
lack of consistency in application, monopoly control over the 
importation and distribution of products embodying intellectual 
property, and a prohibition on the production or distribution of 
products embodying intellectual property that is not related to the 
content of those products.

Extension of Investigation

    Numerous bilateral negotiations have been held on these issues 
since the initiation of this investigation. While China has indicated 
that it will take some actions to address U.S. concerns, significant 
movement on a majority of the U.S. issues has not been shown. These 
issues are too complex and complicated to resolve before the end of the 
six-month statutory deadline for concluding this investigation.
    In light of the need for further time for negotiations to resolve 
these remaining issues, the USTR has determined pursuant to section 
304(a)(3)(B)(i) of the Trade Act, that ``complex or complicated issues 
are involved in the investigation that require additional time.'' The 
investigation has thus been extended to Saturday, February 4, 1995.

Proposed Determinations and Action

    If the issues which are the basis of this investigation are not 
resolved, the USTR proposes to determine pursuant to section 
304(a)(1)(A)(ii) of the Trade Act that acts, policies and practices of 
the Chinese Government with respect to the enforcement of intellectual 
property rights and the provision of market access to persons that rely 
on intellectual property protection are unreasonable and constitute a 
burden or restriction on U.S. commerce.
    In the event the USTR makes such a determination, the USTR must 
determine pursuant to section 304(a)(1)(B) what action to take in 
response. The USTR proposes that, pursuant to the authority provided 
under section 301(c)(1)(B) of the Trade Act, to take the following 
action: To impose increased duties on certain products of China to be 
drawn from the list of products set forth in the Annex to this notice. 
These products represent approximately 2.5 billion dollars in U.S. 
imports of Chinese-origin goods over the last quarter of 1993 and the 
first three quarters of 1994. The decision on what specific products 
could be subject to increased tariffs will take into consideration the 
written comments provided and any written and oral testimony offered at 
the public hearing.

Public Comment on Determinations and Hearing Participation

    In accordance with section 304(b) of the Trade Act, the USTR 
invites all interested persons to provide written comments on the 
proposed determinations. With respect to the proposed trade action 
under section 301, comments may address: (1) the appropriateness of 
subjecting the products listed in the Annex to this notice to an 
increase in duties; (2) the levels at which duties on particular 
products should be set; and (3) the degree to which an increase in 
duties on particular products might have an adverse effect on U.S. 
consumers. Comments will be considered in recommending any 
determination or action under section 301 to the USTR.
    The USTR will also consider the written, oral, and rebuttal 
comments submitted in the context of public hearings held pursuant to 
section 304(b) of the Trade Act and in accordance with 15 CFR 2006.7 
through 2006.9. The hearings will commence at 10 a.m. on Tuesday, 
January 24, 1995, and continue on Wednesday, January 25, 1995, if 
necessary. The hearings will be held in the Truman Room of the White 
House Conference Center, 726 Jackson Place, NW., Washington, DC 20506.
    Request to Testify: Interested persons wishing to testify orally at 
the hearings must provide a written request to do so by noon Friday, 
January 13, 1994, to Sybia Harrison, Staff Assistant to the Section 301 
Committee, Office of the U.S. Trade Representative, 600 17th Street 
NW., Washington DC 20506. In their request, they must provide the 
following information: (1) Name, address, telephone number, and firm or 
affiliation; and (2) a brief summary of their presentation. Requests 
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. Remarks at the hearing will be limited to 5 
minutes.
    Written Testimony: In addition, persons presenting oral testimony 
must submit their complete written testimony by noon Wednesday, January 
19, 1995. In order to assure each party an opportunity to contest the 
information provided by other parties, USTR will entertain rebuttal 
briefs filed by any party by noon Friday, January 27, 1995. In 
accordance with 15 CFR 2006.8(c), rebuttal briefs should be strictly 
limited to demonstrating errors of fact or analysis not pointed out in 
the briefs or hearing and should be as concise as is 
possible. [[Page 1831]] 
    Requirements for Submissions: Written comments on the proposed 
determinations under section 304 of the Trade Act, written testimony, 
and rebuttal briefs must be filed in accordance with the requirements 
set forth in 15 CFR 2006.8(b) and are due according to the relevant 
deadlines noted above. Comments must state clearly the position taken 
and describe with particularly the supporting rationale, be in English, 
and be provided in twenty copies to: Chairman, Section 301 Committee, 
Room 223, USTR, 600 17th St., NW., Washington, DC 20506.
    Written comments, testimony, and briefs 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. 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.
Irving A. Williamson,
Chairman, Section 301 Committee.

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[FR Doc. 95-261 Filed 1-3-95; 8:45 am]
BILLING CODE 3190-01-C