May 1 (Bloomberg) -- Ukraine’s copyright protections have deteriorated to a level where the Obama administration may consider trade sanctions, according to a U.S. report that also cites China for trade-secret theft.
The U.S. Trade Representative’s office labeled Ukraine as the lone “priority foreign country” today in its annual assessment of enforcement of intellectual property rights. The designation, reserved for nations the U.S. considers egregious violators of IP trade law, can spark an investigation and, potentially, an increase in tariff rates.
In releasing the report, the U.S. pledged “to take strong action to support critical jobs and exports in IP-intensive industries,” acting U.S. Trade Representative Demetrios Marantis said today in a statement.
The U.S. also urged China’s government leaders to take “serious steps” to stop trade secret theft from American companies tied to Chinese operators. “The theft of trade secrets is an escalating concern,” according to the report.
Cyber attacks and corporate espionage originating in the Asian nation have added tension in relations between the U.S. and China, the world’s largest economies. White House National Security Adviser Thomas Donilon said in a March 11 speech that the U.S. is concerned about “cyber intrusions emanating from China at a very large scale.”
President Barack Obama’s administration in February released a strategy to combat trade-secret theft, including use of the USTR report to identify weaknesses in trade-secret protections.
China remained on the agency’s “priority watch list” for concerns about its failure to enforce intellectual property rights, according to the report. Other countries on the list are Algeria, Argentina, Chile, China, India, Indonesia, Pakistan, Russia, Thailand, and Venezuela.
Ukraine is the first designated “priority foreign country” in 11 years for issues including “severe deterioration of enforcement in the areas of government use of pirated software and piracy over,” according to the USTR. The nation also isn’t negotiating in good faith to address U.S. concerns, the agency said.
“Ukraine earned this designation by becoming an international source of pirated music and films,” harming that nation’s market and causing “spill over losses in the U.S.,” the Motion Picture Association of America Inc. said today in a statement. The Washington-based group, whose members include the studios of the Walt Disney Co. of Burbank, California, and News Corp.’s Los Angeles-based Twentieth Century Fox Film Corp., is led by Chris Dodd, a Democrat and former Connecticut senator.
Ukraine should “reverse recent backsliding and swiftly resolve the problems identified today,” Marantis said. The nation had no legal convictions for online piracy in 2012, according to the report.
Other nations identified by the USTR are Algeria, Argentina, Chile, India, Indonesia, Pakistan, Russia, Thailand and Venezuela.
USTR removed Canada and Israel from the list this year after the nations took steps to improve enforcement of intellectual property rights, the report showed.
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