In a news release, the Office of the United States Trade Representative (USTR) moved Canada from its watch list to its priority watch list, which includes 11 other countries including China, India, and Russia.
In the USTR’s annual report, China was on its “priority watch list” for the 14th year in a row, while Canada and Columbia were added. The USTR’s report if separate from the Trump administration’s “Section 301” report on China which sparked a series of tariff threats, according to CNBC News.
Trump’s so-called “Special 301 Report on Intellectual Property Rights” singles out China for its “coercive technology transfer practices” and “trade secret theft, rampant online piracy, and counterfeit manufacturing.”
Canada moved from low to high-level watch list
However, and you can believe this or not, USTR Robert Lighthizer, in all his wisdom, moved Canada from a low-level “watch list” to the same “high-priority” list as China because of “poor border enforcement” especially for counterfeit goods shipped through America’s northern neighbor, and concerns about intellectual property protection for pharmaceuticals.
The U.S. pharmaceutical industry has complained that generic versions of drugs still under U.S. patent protection flood in from Canada at much cheaper prices. As for “poor border enforcement,” it is assumed that Canada needs to keep all those less expensive drugs north of the border.
All this increased criticism of Canada comes at a time when the NAFTA talks are supposedly coming to a close, even though Trump wants all his concessions met first. Canadian Foreign Minister Chrystia Freeland and Lighthizer, and Mexican Economy Minister Ildefonso Guajardo are still trying to work out a number of issues, including auto content rules.
The biggest issue over which there is disagreement is something called the “sunset clause,” offered up by the Trump Administration. Basically, it states that all three countries will have to proactively agree — every five years — that they will remain in the trade pact. If they do not agree, the deal will be automatically killed.
China and the U.S. close an to all-out trade war
The Chinese commerce ministry responded to the USTR report with terse objections, saying the United States lacks objective standards and fairness, reports Reuters.
“The Chinese side opposes this, and urges the U.S. to earnestly fulfill its bilateral commitments, respect the facts, and objectively, impartially, evaluate with positive intentions the efforts made by foreign governments including China in the area of intellectual property rights and the results achieved,” the ministry said in a statement on its website on Saturday.
USTR Lighthizer, along with other Trump administration officials will be traveling to China next week for talks on U.S. demands for changes in Beijing’s trade and intellectual property policies. So far, the two countries are at an impasse – with Trump threatening $150 billion in tariffs on Chinese goods, and China’s Ministry of Commerce threatening to retaliate in equal measure.
