Just as estimates for economic growth for the year were being revised downward, the economy took another hit. On August 20, the United States Trade Representative Office once again put Taiwan on the "Special 301" watch list. In Taiwan itself, this news inspired two very different reactions.

Although Taiwan has been off of the 301 retaliation list since 1996, each year it has faced pressure when time for listing comes around. This year, in an effort to avoid being listed, Lin Yi-fu, vice-minister of economic affairs, and Chen Ruey-long, director of the Bureau of Foreign Trade, went to the US in early August to undertake vice-ministerial-level discussions and provide explanations to the US side. However this action was not successful, and Taiwan was once again cited.

The main reason for the listing this time was that a number of American commercial organizations and companies-including Nintendo, Princeton Biomeditech, the International Intellectual Property Alliance, the International Anti-Counterfeiting Coalition and the Pharmaceutical Research and Manufacturers Association of America-have made accusations against Taiwan. Given these accusations, the US side concluded that Taiwan's measures to protect intellectual property were not being strongly enough implemented.

The ROC government believes it is unfair to list Taiwan based on individual cases. Take for example the case of Princeton Biomeditech. Chen Ruey-long argues that this case has already been decided before a judge. If the company is not satisfied, it can appeal. But in any case this should not be confused with the question of "Special 301."

The so-called 301, Super 301, and Special 301 laws are all based on Article 301 in the US Omnibus Trade Act. If it is judged that a US trading partner is engaging in unfair trade practices, the US will request it to make adjustments; if it doesn't, the US will impose sanctions. Super 301 goes farther than 301. Besides considering unfair trade practices, it also looks at other impediments to fair trade, including export subsidies, export quotas, and so on. Special 301, meanwhile, focuses on intellectual property rights (IPR).

Under the pressure of 301, in March Chen Ruey-long reiterated that the sincerity of the Taiwan government should be obvious from its actions. He said that last year the government uncovered 189 cases of software piracy, with a market value of NT$21 million. It also confiscated illegally copied products in 1007 cases, with a market value of NT$1.36 billion.

In terms of legislation, Taiwan long ago passed IPR-relevant laws, including those covering patents, trademarks, and copyrights. However, the US has been dissatisfied with implementation. For example, in 1992, Taiwan was listed among the most serious offenders for the pirating of CDs. A memorandum of understanding was signed with the US on IPR protection, with Taiwan promising to establish "a monitoring system for software exports." Early this year, because of US doubts about effectiveness, the government took responsibility from the Institute for Information Industry and turned it over to Customs. This changed the policy from "first admitting and then inspecting" to "first inspecting and then admitting."

Although many commentators argue that the US was wrong to list Taiwan under Special 301 this time, some in the legal community say that Taiwan still needs to work harder at protecting IPR. Attorney Song Yao-ming avers that though Taiwan has a comprehensive set of laws covering IPR, judicial organs must have a broader international legal perspective in judging cases. Otherwise, the protection stipulated by law cannot be achieved in court. For example, the US argues that it is unreasonable to demand that when an American company files a lawsuit claiming IPR violation, the representative in the suit must be the chairman of the board of the American parent company. Because each country is different on the question of who can represent the company, why should foreign companies determine their representative based on ROC company law?

These types of implementation problems require solutions. It remains to be seen whether the US will follow up its placing of Taiwan on the 301 list with punitive tariffs or import restrictions.