PRESERVING THE INTEGRITY OF THE SPECIAL 301 PROCESS

C O N F I D E N T I A L AIT TAIPEI 000038 STATE FOR U/S JEFFERY AND EAP/TC FROM THE DIRECTOR STATE PASS USTR FOR AMBASSADOR SCHWAB, NSC FOR SENIOR DIRECTOR WILDER, AND USDA FOR U/S KEENUM FROM THE DIRECTOR E.O. 12958: DECL: 01/11/2018 TAGS: ECON ETRD KIPR PGOV PREL EAGR TW SUBJECT: PRESERVING THE INTEGRITY OF THE SPECIAL 301 PROCESS Classified By: Stephen M. Young, AIT Director, for reasons 1.4 (b) and (d). ¶1. (C) AIT is grateful for the ongoing support of the Washington interagency group as we manage our diverse and complex economic relationship with Taiwan. We share your frustration with the slow pace of Taiwan progress on some of our top agricultural priorities, and continue our effort to remedy all obstacles to full market access. At the same time, we are proud of our success in producing concrete results on goals such as WTO GPA accession. In the context of our common effort to develop one of the U.S.'s largest bilateral trading relationships, therefore, I am concerned by indications that external factors may be compromising the integrity of the IPR Special 301 process, as well as affecting the chance of future progress on existing trade issues. ¶2. (C) Intellectual property rights protection has been at the center of our bilateral economic relationship for years. Our sustained engagement, in close cooperation with U.S. industry and other stakeholders, has produced genuine progress on a range of our IPR priorities here, from establishment of an IP Court to improved enforcement of the Campus Action Plan against IP infringement. Throughout, the Special 301 process has been an invaluable tool in advancing our agenda. In recognition of Taiwan's clear efforts toward improving IP protection, we recommended last year's out-of-cycle review of Taiwan's Special 301 status, with an eye toward encouraging future progress and, if successful, removing Taiwan from the 301 Watch List. Indeed, as post has reported at length, Taiwan has made real achievements in this area over the past year. ¶3. (C) Therefore, I am disappointed that factors unrelated to IPR protection have delayed completion of the review. With the review poised for final interagency review, I would like to stress the critical importance of maintaining the integrity of the Special 301 IPR process. Allowing issues unrelated to IPR to affect the Special 301 review would, in my view, threaten the efficacy of what has thus far proved our most potent means of advancing a major bilateral trade priority. The nature of our trade disagreements with Taiwan will inevitably shift with time, as would be expected in a bilateral economic relationship of this scope. Regardless, IPR is certain to remain at the center of the agenda for our two advanced, high technology economies. In view of this reality, we must ensure that the Special 301 mechanism remains a viable tool for advancing our interests. Linking 301 to unrelated issues, however important, risks undermining our credibility while limiting our future options for achieving progress on this and other priorities. I hope every member of the TPRG will put the decision on the pending out-of-cycle review within this broader context, and remove Taiwan now from the Special 301 Watch List. SYOUNG