RI to stay on USTR 'watch list'

RI to stay on USTR 'watch list'

WASHINGTON (Reuter): The United States has decided not to target any countries for possible trade sanctions over copyright violations or discrimination in government contracting, U.S. Trade Representative Mickey Kantor said on Saturday.

In an annual report to Congress required by U.S. trade laws, Kantor said considerable progress had been made in the past year on protecting copyrights, patents and trademarks and that foreign governments also had made progress in cleaning up procurement practices that shut out overseas competitors.

The decision means President Bill Clinton's administration will take a less confrontational approach with those countries whose copyright protection laws and government purchasing practices bother U.S. firms trying to do business with them.

The other countries on the priority list, which is one step away from a full-fledged sanctions investigation, are Brazil, Greece, Saudi Arabia, Turkey, South Korea and India.

But China was downgraded to basic "watch list" status after Washington and Beijing signed a copyright protection agreement in February, narrowly avoiding U.S. sanctions on a billion dollars' worth of Chinese goods.

The USTR suggested that several other countries also escaped a worse fate by last-minute agreement to improve their record on copyright, citing Bulgaria, Singapore, Indonesia and Turkey.

But Indonesia and 23 other countries will remain in the watch list, Kantor said.

Of the eight priority watch list countries listed for copyright concern, four are targeted for special review: Greece and Saudi Arabia by October, and Turkey and Japan by mid- December.

Kantor said, however, that several countries will be targeted for special attention to ensure progress on the two trade fronts.

Although he cited wide advances in opening up the bidding process on government contracts, he said he was concerned Germany was not giving U.S. firms a fair chance.

General Electric is locked in dispute with Germany over a power plant project in Lippendorf. GE says it was shut out of the bidding despite a 1993 agreement between the United States and Germany to open up the procurement process.

Kantor's report said Washington would also watch Japan closely to see how it complies with government procurement agreements between the two countries.

He would not rule out taking future action against violators.

"In the coming months I will not hesitate to designate as a priority foreign country any country where such a designation is warranted," Kantor said in a statement.

In addition to the five countries coming under special review for copyright violations, the European Union, India and Korea were put on the agency's "priority watch list".

On government purchasing and contracting, Kantor said a high priority for the United States is increasing public awareness of practices and reducing corruption.

He said the administration was determined to "push initiatives to clean up government procurement practices around the world."

Many of the complaints by U.S. firms about the trade practices of several countries have been resolved quietly through negotiation, said one U.S. official.

Last year, the U.S. trade representative (USTR) cited China for intellectual property violations. The decision prompted negotiations that led to a historic agreement between Washington and Beijing earlier this year.

The deal was hard fought, however, coming just as the two countries were on the brink of a trade war that could have imposed billions of dollars of punitive tariffs on each others' imported goods.