For Immediate Release

April 30, 2007

Contact: Deidre Huntington
Ph: 202-220-4550

Publishers Welcome USTR’s Annual “Special 301” Report and Results of China Provincial Review

Washington, DC, April 30, 2007: The Association of American Publishers (AAP) noted today’s release of the annual Special 301 report by the Office of the United States Trade Representative (USTR). The report, the result of a Congressional mandate to assess the adequacy and effectiveness of intellectual property protection in selected countries worldwide, highlights book and journal piracy among other issues ripe for action in the coming year. This year’s report also features the results of USTR’s first Special Provincial Review of China, which assesses the level of achievement among China’s regional and local government bodies in furthering effective intellectual property protection.

Intellectual property theft worldwide continues to be a central concern for the publishing industry, as AAP estimates that U.S. book and journal publishers lost almost $600 million in 2006 due to commercial scale photocopying, illegal print runs, unauthorized translations and CD-R burning of text. AAP, as a member of the International Intellectual Property Alliance (IIPA), submitted specific recommendations to USTR on February 13 as part of the annual review process. Later in February AAP submitted its views on issues surrounding book and journal piracy, as part of the USTR Special Provincial Review on China.

The Special 301 report places countries in one of several categories based on their lack of effectiveness in fighting intellectual property theft. Those designated as Priority Foreign Countries, the worst offenders, are vulnerable to immediate sanctions under the amended Trade Act of 1974. Countries not ripe for designation as Priority Foreign Countries are placed on one of two “watch lists.” Placement on the Priority Watch List or the Watch List sends a message that the U.S. government is closely monitoring the country’s progress in intellectual property protection. USTR can also designate countries for ongoing monitoring under other trade provisions. Today’s announcement places 12 countries on the Priority Watch List and 30 on the Watch List (with others subject to monitoring under other provisions of the Trade Act). Among the countries on the Priority Watch List with book publishing markets are China, Russia, India, Thailand, Egypt and Turkey. Significant book publishing market countries placed on the Watch List include Korea, Brazil, the Philippines, Canada, Malaysia, Mexico, Pakistan and Taiwan.

The USTR report spotlights China and Russia as primary markets for engagement, citing continued high levels of piracy in both countries. Book and journal publishers doing business in these markets face massive Internet piracy that affects commercial bestsellers, academic books and journals. In addition, piracy of trade books, in English or translation, undercuts the ability of legitimate companies to do business in both countries. Textbook piracy plagues China’s universities, despite some recent attempts by authorities to take action. China’s restrictions on market access for legitimate copyrighted products is also a contributing factor. These problems are underscored by the fact that on April 10, USTR initiated a World Trade Organization dispute settlement action in an effort to engage China on selected market access and intellectual property issues.

Among this year’s new developments are the elevation of Thailand to the Priority Watch List and the lowering of Brazil to the Watch List. U.S. publishers applaud the action with respect to Thailand, particularly in the wake of recent evidence that pirated books from Thailand are entering the U.S. market, a development of grave concern to American publishers. With respect to the placement of Brazil on the Watch List, AAP noted the developments that led to this action while emphasizing the need to continue work, especially with respect to the illegal reproduction of academic materials—a plague on both foreign and Brazilian publishers. In addition, AAP supports the selection of Pakistan for an out-of-cycle review, since it remains one of the world’s worst book piracy markets.

Today’s announcement by USTR also featured the results of its first Special Provincial Review of China. The review, which focuses primarily on six provinces in China, identifies positive steps taken by regional or local authorities, while pointing out issues on which improvement is needed in the target geographic areas. AAP’s comments on this process in February described both China’s achievements and difficulties with regard to textbook infringement on university campuses and Internet piracy. AAP was pleased to see inclusion of these issues in USTR’s review. With reference to the provincial review, AAP President and CEO Pat Schroeder said: “We’re very pleased to see university issues discussed so prominently in USTR’s report. China’s students and scholars should be using the world’s finest academic materials and the systematic illegal copying of these materials currently seen in China hurts not only our U.S. publishers and authors, but also Chinese users who are denied their best educational resources. USTR is to be commended for engaging on this issue, and we look forward to working with them in the continuing effort to clean up China’s campuses.”

Speaking about the Special 301 process as a whole, Mrs. Schroeder stated, “Book publishers firmly believe that the process leading to today’s announcement is an important component of our government’s efforts to foster a global climate in which U.S. industries can thrive. AAP and its members are involved every day in the intellectual property fight on many fronts, and have made enormous progress, but as this report shows, there is still much work left to be done. We look forward to working with the United States government and with foreign governments to identify priority issues and strengthen worldwide protection of creative works.”

Finally, AAP also noted the importance of combining Special 301 and related processes with other endeavors, such as WTO consultations, bilateral mechanisms like the U.S. - China Strategic Economic Dialogue and the Joint Commission on Commerce and Trade, as well as the ongoing Free Trade Agreement (FTA) negotiation process. Most recently, USTR concluded principle negotiations for an FTA with Korea, highlighting university campus piracy among several issues of emphasis in the intellectual property sector.

The Association of American Publishers is the national trade association of the U.S. book publishing industry. AAP’s more than 300 members include most of the major commercial publishers in the United States, as well as smaller and non-profit publishers, university presses and scholarly societies—small and large. AAP members publish hardcover and paperback books in every field, educational materials for the elementary, secondary, postsecondary, and professional markets, scholarly journals, computer software, and electronic products and services. The protection of intellectual property rights in all media, the defense of the freedom to read and the freedom to publish at home and abroad, and the promotion of reading and literacy are among the Association’s highest priorities.

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