Lawmakers, Witnesses Press for Strengthened Enforcement, IPR at Senate Hearing

Tactics used by counterfeiters include hiding paper trails, intimidating witnesses and coercing U.S. businesses to surrender intellectual property, said Wyden. “When fake tennis shoes or counterfeit computer chips arrive in the U.S., Customs often appears too focused on security rather than its trade mission,” he added. Meanwhile, “Chinese companies avoid anti-dumping duties by routing merchandise through a place like Singapore before it heads to the U.S. The schemes are becoming even more complex, sometimes involving shell companies that appear one day and disappear the next.”

The passage of the ENFORCE Act into law would help stem the tide of increasing evasion of U.S. trade remedies, said Wyden and committee ranking member Orrin Hatch, R-Utah. The act mandates timelines in CBP investigations into allegations of evasion. Hatch co-sponsored Customs Reauthorization legislation in 2013 that includes customs provisions from the ENFORCE Act (see 13032906). During the June 25 hearing, Hatch said he hopes the Finance Committee will move on that legislation in the near future. Rep. Charles Boustany, R-La., introduced counterpart PROTECT Act, a bill seen as less stringent in its mandates on CBP. The PROTECT Act's customs provisions are included in a different Customs Reauthorization bill (see 13040911). Boustany said recently there is no clear route forward on Customs Reauthorization in the foreseeable future (see 14050720).

Chinese Solar Dispute Emblematic of Failing Enforcement Policy, Says Wyden

The ongoing U.S. dispute with China over the dumping of crystalline silicon photovoltaic products into the U.S. market illustrates the impotence of U.S. enforcement policy, said Wyden during the hearing. The Commerce Department decided on June 3 to preliminarily set countervailing duties on the Chinese products, which could escalate the dispute, said some U.S. lawmakers and the Chinese Ministry of Commerce. “When the Chinese government gives its domestic solar companies massive subsidies, the U.S. needs to respond quickly and with all available resources,” said Wyden. “In practice, the response took years, and was too little and too late to protect thousands of American jobs and home-grown technologies. The Chinese solar companies had already crippled their American competitors.” Both House members and Senators have recently pressured the Obama administration to broker a long-term settlement in the dispute in order to preserve U.S. industry and ensure U.S. consumers have access to economical solar energy (see 14052916).

USTR Should Name Chief Intellectual Property Negotiator, Says Hatch, Witnesses

Hatch reiterated during the hearing his call to require a chief innovation and intellectual property (IP) negotiator, as required by the Innovation Through Trade Act (here). Hatch introduced the legislation in March 2013 (here). Russia, Canada, Chile, China and India, among other countries, continue to rampantly violate WTO and free trade agreement commitments on intellectual property rights, said Hatch.

The pharmaceutical industry supports the Finance Committee’s attempts to provide more resources to the Office of the U.S. Trade Representative for intellectual property rights enforcement, said witness Bart Peterson, senior vice president at Eli Lilly and Company. “Nowhere is the need for strong language to protect IP more important than in the Trans-Pacific Partnership,” said Peterson. “It’s critical that the final TPP agreement has pharmaceutical IP provisions equal to KORUS and U.S. law, including 12 years of data exclusivity for biologics.” Hatch has long championed 12 years of exclusivity for the products (see 13120415). The U.S., however, is pitted against all other TPP partners on IP, and the chapter may threaten consensus elsewhere in the negotiations (see 14030520). -- Brian Dabbs