China, India on U.S. list for intellectual property concerns

By Krista Hughes

WASHINGTON (Reuters) - China and India remain on a U.S. priority watch list for lax rules on copyright, trade secrets and other intellectual property rights violations in an annual review of trading partners published by the U.S. Trade Representative on Thursday.

Thirteen countries are on the priority watch list for 2015, including Russia and Ukraine as well as China and India, and another 24 are on a lower-level watch list.

China was cause for concern because of online piracy and rising theft of trade secrets as well as rules aimed at fostering the local technology industry at the expense of foreign suppliers, the report found.

"We felt it was critical to call this out," Deputy U.S. Trade Representative Robert Holleyman told reporters.

The United States has welcomed the suspension of rules forcing Chinese banks to buy local technology products and asking foreign firms to hand over source code.

But U.S. Trade Representative Michael Froman said this week the United States would take up issues like "buy local" laws and technology transfer as part of an investment treaty between the two countries.

The bilateral investment treaty, which is under negotiation, should also cover unfair competition by state-owned firms and discriminatory enforcement of China's competition law, he said.

In India, USTR said there had been signs of progress in addressing intellectual property concerns and the United States expected "substantive and measurable improvements."

No country was listed in the worst offender spot of "priority foreign country," a label that can eventually lead to trade sanctions or the loss of trade benefits.