U.S. Trade Representative Robert Lighthizer should leave Section 230-like protections out of future trade deals, House Consumer Protection Subcommittee Chair Jan Schakowsky, D-Ill., said during a hearing Wednesday. She wrote a letter to Lighthizer last week, joining House Commerce Committee Chairman Frank Pallone, D-N.J., and ranking member Greg Walden, R-Ore., with the same request (see 1908060064).
China and India should be removed from the Office of the U.S. Trade Representative’s priority watch list for intellectual property infringement, officials in those countries recently told USTR. Comments were due Thursday for USTR’s 2020 Special 301 Review (see 2002070032). China and India cited strong IP protections and reforms, but the U.S. Chamber of Commerce noted both continue to score poorly on the International IP Index. China’s overall score increased from 47.7% in the seventh edition to 51% in the eighth edition, the Chamber said. India’s score increased from 36% to 38.5%. The U.S. score increased from 94.8% to 95.3%. “Despite some positive -- albeit incremental -- changes in China, we continue to advocate for bold reforms that will result in meaningful changes for foreign companies,” the U.S. said. China cited a “firm attitude toward IP protection, with well-established and constantly developing IP legal system,” China said, citing what it called a fair and impartial judicial protection for IP rights. India cited “extensive initiatives taken to reinforce its IPR laws as well as to protect patents and all IP forms in the country.” SoundExchange targeted six countries denying American music performers and producers about $170 million annually in royalties: U.K., Australia, Canada, France, Japan and the Netherlands.
China, India and the EU are among the regions tech and intellectual property groups recommended the Office of the U.S. Trade Representative monitor for international IP infractions. Public comments were due Friday for USTR’s 2020 Special 301 Review (see 1902080063). USTR has a Feb. 26 hearing. The Internet Association cited the EU’s new “onerous systems of copyright liability for internet services,” specifically the copyright directive. It “directly conflicts with U.S. law and requires a broad range of U.S. consumer and enterprise firms to install filtering technologies, pay European organizations for activities that are entirely lawful under the U.S. copyright framework, and face direct liability for third-party content,” IA said. IA didn’t recommend any specific countries for USTR’s priority watch list or watch list, raising concerns about China, India, Vietnam, Chile, Japan, Hong Kong and many others. BSA|The Software Alliance recommended USTR include Chile, China, India, Indonesia and Vietnam on its priority watch list; Argentina, Brazil, Korea, Mexico and Thailand on its watch list; and the EU as a region of concern. BSA cited measures that create market access barriers in the EU. The Computer & Communications Industry Association didn’t offer specific recommendations for the priority watch list or watch list. CCIA cited the EU’s recently enacted Copyright Directive and policies India is pursuing, which “pose significant negative consequences for the digital economy and depart from global norms.” Any “discriminatory practices under the guise of intellectual property that target U.S. exports should be identified and discouraged by USTR,” CCIA said. The International Intellectual Property Alliance recommended Argentina, Chile, China, India, Indonesia, Mexico, Russia, South Africa, Taiwan, Ukraine and Vietnam for the priority watch list. It recommended Brazil, Canada, Colombia, Ecuador, Peru, Switzerland, Thailand and UAE for the watch list. IIPA suggested the U.S. engage trading partners to “remove discriminatory and restrictive trade barriers in those countries that harm exports of U.S. creative goods and services.”
U.S. importers of Chinese goods inundated the Office of the U.S. Trade Representative with more than 2,800 List 4A tariff-exclusion requests in the 24 hours before the web portal went dark as scheduled at 11:59 p.m. EST Friday, showed our docket review. A huge backlog of List 3 exclusion requests awaits USTR disposition.
Though President Donald Trump “initiated these tariff actions, in part, to address the issue of intellectual property rights for American businesses in trade with China,” TCL warned effects may be more widespread. “Rather than be sanctioned under 301 tariffs, TCL’s partnership with Roku should serve as a model for ensuring the proper protection and compensation of American creators and owners of intellectual property for products manufactured in China.” If TCL North America can’t win the exclusions it seeks from 15 percent List 4A Trade Act Section 301 tariffs it has paid since Sept. 1 on flat-panel TV imports from China, it wants the Trump administration to weigh “reallocating” TVs to List 4B where there’s no current tariff exposure. TCL filed exemption requests Thursday at the Office of the U.S. Trade Representative docket on 8528.72.64.30, 8528.72.64.40 and 8528.72.64.60 classifications. The “sole available source of LCD panels and supporting material components is China,” said the applications.
Clarity Products seeks exclusion from tariffs it pays on the amplified cordless phones imported from China under the 8517.11.00.00 subheading, posted the Tennessee vendor Thursday in the Office of the U.S. Trade Representative docket. The phones’ audio systems also have “frequency adjustment, noise suppression and multiband compression to help those with hearing loss,” said Clarity. Chinese manufacturers of “regular” cordless phones could do “small production runs” for Clarity at “economical prices,” it said. Clarity is “researching moving production to Malaysia and Vietnam, but this is unviable at this time given the company’s small volumes,” it said. It “explored” making amplified phones in a production facility it runs in Chattanooga, “but it is not economical,” it said. If Clarity lands the exemption, it would be entitled to refunds of the 15 percent tariffs retroactive to Sept. 1 when List 4A took effect. USTR is scheduled to roll back List 4A to 7.5 percent Feb. 14 (see 2001160022).
France’s digital services tax (see 1912030002) sets a “troubling precedent” because the DST “unnecessarily departs from progress towards stable, long lasting international income tax policies,” and “disproportionately impacts U.S.-headquartered companies.” So testified Sam Rizzo, Information Technology Industry Council director-policy, before an Office of the U.S. Trade Representative hearing Tuesday on Trade Act Section 301, per a transcript released Friday. The tech industry worries about “an accelerating trend toward the unilateral adoption of DSTs” in other countries, said Rizzo. U.S. “policy responses” need to be “about more” than the French DST, he said. “It is about preventing the wide-scale application of targeted, unilateral taxes.” USTR proposed retaliatory tariffs of up to 100 percent on some French non-tech imports.
The PowerPic wireless-charging picture frame for mobile phones imported from China under the 8504.40.85.00 subheading was one of 68 exclusions the Office of the U.S. Trade Representative granted from the List 3 Section 301 tariffs, said Monday’s Federal Register. The exclusions are retroactive to Sept. 24, 2018, when the tariffs took effect at 10 percent before being raised to 25 percent months later. “After a great deal of time, effort and expense by our small company, we are 100% convinced that there are no manufacturers anywhere in the world but in China which can produce our products at prices and in quantities needed to allow us to succeed in selling to consumers,” said importer Twelve South in its PowerPic exclusion request.
“Financial impacts” of the French digital services tax and DST “implications for the US tax base” worry the tech industry, posted international tax law expert Gary Sprague with Baker McKenzie in docket USTR-2019-0009. Sprague asked to testify for Amazon, Facebook, Google, Microsoft and others at the hearing Tuesday on the Office of the U.S. Trade Representative’s December finding that France’s DST discriminates against U.S. companies (see 1912030002). USTR is proposing to slap up to 100 percent retaliatory tariffs on 63 subheadings of French imports worth about $2.4 billion in 2018 customs value. Tech “strongly" backs the work of the Organisation for Economic Co-operation and Development to draft a “consensus solution” that would obviate the need for the French DST and similar other tax remedies that can harm U.S. interests, said Sprague. France's tax has “encouraged several other countries to pursue similar discriminatory taxes,” said Sprague, a member of the OECD technical advisory group studying the treatment of e-commerce revenue in tax treaties. The vast majority of the hundreds who have requested to testify are wine importers opposing the proposed tariffs on French goods. Written comments on USTR's proposed tariffs are due Monday. Post-hearing rebuttals are due Jan. 14.
Sonos can’t move outside China “in any reasonable or efficient manner” production of the wireless mesh network speakers it seeks exclusion from the List 4A tariffs, posted the vendor Wednesday in the Office of the U.S. Trade Representative public docket. Sonos estimates it would cost more than $15 million and take about two years to find alternative sourcing. There's “no other single market in the world” for such production, said the company, and “fragmenting our supply chain across several countries is inefficient." It imports the products under the 8517.62.00.90 heading covering a broad swatch of consumer tech products including smartwatches.