OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE OPENS STATUTORY SECTION 301 FOUR-YEAR REVIEW
The Office of the United States Trade Representative (USTR) recently announced the next steps for the statutory Section 301 investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation. The USTR is seeking public input to determine the impact of Section 301 tariffs on U.S. industries and consumers. Requests for continuation were submitted to the USTR resulting in a September 2022 announcement by the USTR that tariff actions had not been terminated and a review of tariff actions would be conducted.
SECTION 301 STATUTORY FOUR-YEAR REVIEW AND PUBLIC COMMENT
The USTR is required under Sections 301 and 307(c) to review the effectiveness of the measures set forth in Section 301 and the impact of these actions on the U.S. economy, U.S. enterprises, and consumers. Public comment is specifically sought to determine:
- The effect of mitigating China’s policies related to intellectual property, innovation, and technology transfer.
- The impact of Section 301 tariffs on the U.S. economy and consumers
- The benefit to U.S. domestic manufacturing as well as capital investments, production, and profits.
- The outcome of U.S. technological leadership and development.
- The impact on U.S. workers with respect to wages and employment.
- The impact on U.S. small business.
- The effect on the U.S. supply chain.
- Identify if the actions resulted in higher additional duties on inputs used for manufacturing in the United States than the additional duties on downstream products incorporating those inputs.
Interested persons may submit comments from November 15, 2022, through January 17, 2023. Comments must be submitted through the USTR portal. The USTR will evaluate comments to determine if actions under Section 301 are efficacious and beneficial to the U.S. economy, supply chain, and individual consumers.
SECTION 301 OVERVIEW
In August 2017, the USTR began investigating policies and practices of the Government of China related to intellectual property, innovation under Section 301 of the Trade Act of 1974, and technology transfer. The USTR concluded that the Government of China’s policies were discriminatory or unreasonable and created a burden that restricted U.S. commerce – and was therefore subject to section 301 of the Trade Act.
USTR specifically alleged that the government of China:
- Restricts foreign ownership – joint venture requirements and foreign equity limitations as well as administrative review and licensing process to pressure technology transfer from U.S. to Chinese companies.
- Technology regulations compel U.S. companies that seek to license technologies to Chinese organizations must do so in terms that favor Chinese beneficiaries.
- Facilitates the investment in and acquisition of U.S. companies and assets by Chinese enterprises to acquire intellectual property and technologies for trans to Chinese companies.
- Supports unauthorized breaches into and theft from U.S. companies’ computer networks to gain access to proprietary information and trade secrets.
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