U.S. Reiterates Call for China to Strengthen IP Safeguards

(Bloomberg) -- China has failed to bolster protections for intellectual property and open its market to more foreign companies, despite Beijing’s promises to reform, the Trump administration said.

The U.S. kept China on a “priority watch list” of nations that don’t adequately protect IP rights, according to the annual report of the U.S. Trade Representative’s office on IP practices around the world.

“Despite a broad government reorganization, including of intellectual-property responsibilities among government agencies, and proposed revisions to IP laws and regulations, China failed to make fundamental structural changes to strengthen IP protection and enforcement, open China’s market to foreign investment, allow the market a decisive role in allocating resources, and refrain from government interference in private sector technology transfer decisions,” USTR said Thursday.

There’s an “urgent need” for China to strengthen its IP safeguards, such as by preventing the theft of trade secrets, online piracy, and the “high-volume manufacture and export of counterfeit goods,” the trade agency said.

The U.S. and China are locked in intense negotiations to end a trade war that broke out last year when the Trump administration slapped tariffs on Chinese imports, after USTR found that the Asian nation engaged in widespread abuse of American IP rights. In those talks, the U.S. is pressing China to overhaul its technology strategy, including Beijing’s plan to dominate emerging sectors such as robotics by 2025.

The U.S. added Saudi Arabia to the priority watch list, noting a deterioration in its protections on IP for pharmaceutical products, as well as “longstanding concerns” regarding counterfeit and pirated goods, USTR said. The other countries on the list are Algeria, Argentina, Chile, India, Indonesia, Kuwait, Russia, Ukraine and Venezuela.

The administration moved Canada and Colombia to a lower-priority watch list.

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