83 FR 13099 - Actions by the United States Related to the Section 301 Investigation of China's Laws, Policies, Practices, or Actions Related to Technology Transfer, Intellectual Property, and Innovation

Executive Office of the President

Federal Register Volume 83, Issue 59 (March 27, 2018)

[Federal Register Volume 83, Number 59 (Tuesday, March 27, 2018)]
[Presidential Documents]
[Pages 13099-13101]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-06304]




                        Presidential Documents 



Federal Register / Vol. 83, No. 59 / Tuesday, March 27, 2018 / 
Presidential Documents

[[Page 13099]]


                Memorandum of March 22, 2018

                
Actions by the United States Related to the 
                Section 301 Investigation of China's Laws, Policies, 
                Practices, or Actions Related to Technology Transfer, 
                Intellectual Property, and Innovation

                Memorandum for the Secretary of the Treasury, the 
                United States Trade Representative, the Senior Advisor 
                for Policy, the Assistant to the President for Economic 
                Policy, the Assistant to the President for National 
                Security Affairs, and the Assistant to the President 
                for Homeland Security and Counterterrorism

                On August 14, 2017, I directed the United States Trade 
                Representative (Trade Representative) to determine 
                whether to investigate China's laws, policies, 
                practices, or actions that may be unreasonable or 
                discriminatory and that may be harming American 
                intellectual property rights, innovation, or technology 
                development. On August 18, 2017, the Trade 
                Representative initiated an investigation under section 
                301 of the Trade Act of 1974, as amended (the ``Act'') 
                (19 U.S.C. 2411).

                During its investigation, the Office of the United 
                States Trade Representative (USTR) consulted with 
                appropriate advisory committees and the interagency 
                section 301 Committee. The Trade Representative also 
                requested consultations with the Government of China, 
                under section 303 of the Act (19 U.S.C. 2413). The USTR 
                held a public hearing on October 10, 2017, and two 
                rounds of public written comment periods. The USTR 
                received approximately 70 written submissions from 
                academics, think tanks, law firms, trade associations, 
                and companies.

                The Trade Representative has advised me that the 
                investigation supports the following findings:

                First, China uses foreign ownership restrictions, 
                including joint venture requirements, equity 
                limitations, and other investment restrictions, to 
                require or pressure technology transfer from U.S. 
                companies to Chinese entities. China also uses 
                administrative review and licensing procedures to 
                require or pressure technology transfer, which, inter 
                alia, undermines the value of U.S. investments and 
                technology and weakens the global competitiveness of 
                U.S. firms.

                Second, China imposes substantial restrictions on, and 
                intervenes in, U.S. firms' investments and activities, 
                including through restrictions on technology licensing 
                terms. These restrictions deprive U.S. technology 
                owners of the ability to bargain and set market-based 
                terms for technology transfer. As a result, U.S. 
                companies seeking to license technologies must do so on 
                terms that unfairly favor Chinese recipients.

                Third, China directs and facilitates the systematic 
                investment in, and acquisition of, U.S. companies and 
                assets by Chinese companies to obtain cutting-edge 
                technologies and intellectual property and to generate 
                large-scale technology transfer in industries deemed 
                important by Chinese government industrial plans.

[[Page 13100]]

                Fourth, China conducts and supports unauthorized 
                intrusions into, and theft from, the computer networks 
                of U.S. companies. These actions provide the Chinese 
                government with unauthorized access to intellectual 
                property, trade secrets, or confidential business 
                information, including technical data, negotiating 
                positions, and sensitive and proprietary internal 
                business communications, and they also support China's 
                strategic development goals, including its science and 
                technology advancement, military modernization, and 
                economic development.

                It is hereby directed as follows:

                Section 1. Tariffs. (a) The Trade Representative should 
                take all appropriate action under section 301 of the 
                Act (19 U.S.C. 2411) to address the acts, policies, and 
                practices of China that are unreasonable or 
                discriminatory and that burden or restrict U.S. 
                commerce. The Trade Representative shall consider 
                whether such action should include increased tariffs on 
                goods from China.

                    (b) To advance the purposes of subsection (a) of 
                this section, the Trade Representative shall publish a 
                proposed list of products and any intended tariff 
                increases within 15 days of the date of this 
                memorandum. After a period of notice and comment in 
                accordance with section 304(b) of the Act (19 U.S.C. 
                2414(b)), and after consultation with appropriate 
                agencies and committees, the Trade Representative 
                shall, as appropriate and consistent with law, publish 
                a final list of products and tariff increases, if any, 
                and implement any such tariffs.

                Sec. 2. WTO Dispute Settlement. (a) The Trade 
                Representative shall, as appropriate and consistent 
                with law, pursue dispute settlement in the World Trade 
                Organization (WTO) to address China's discriminatory 
                licensing practices. Where appropriate and consistent 
                with law, the Trade Representative should pursue this 
                action in cooperation with other WTO members to address 
                China's unfair trade practices.

                    (b) Within 60 days of the date of this memorandum, 
                the Trade Representative shall report to me his 
                progress under subsection (a) of this section.

                Sec. 3. Investment Restrictions. (a) The Secretary of 
                the Treasury (Secretary), in consultation with other 
                senior executive branch officials the Secretary deems 
                appropriate, shall propose executive branch action, as 
                appropriate and consistent with law, and using any 
                available statutory authority, to address concerns 
                about investment in the United States directed or 
                facilitated by China in industries or technologies 
                deemed important to the United States.

[[Page 13101]]

                    (b) Within 60 days of the date of this memorandum, 
                the Secretary shall report to me his progress under 
                subsection (a) of this section.

                Sec. 4. Publication. The Trade Representative is 
                authorized and directed to publish this memorandum in 
                the Federal Register.
                
                
                    (Presidential Sig.)

                 THE WHITE HOUSE,

                     Washington, March 22, 2018

[FR Doc. 2018-06304
Filed 3-26-18; 8:45 am]
Billing code 3290-F7-P