VZCZCXYZ0014
RR RUEHWEB

DE RUEHC #0115 0312007
ZNR UUUUU ZZH
R 312003Z JAN 08
FM SECSTATE WASHDC
TO AMEMBASSY TASHKENT 0000

UNCLAS STATE 010115 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ELAB ETRD KIPR ECON PREL
SUBJECT: UZBEKISTAN GSP PETITIONS: REQUEST FOR INTERIM 
DEMARCHE 
 
REF: A) 07 STATE 56790 B) 07 TASHKENT 2011 
 
SENSITIVE BUT UNCLASSIFIED; PLEASE PROTECT ACCORDINGLY. 
 
¶1. (U) This is an action request; please see para 9. 
 
¶2. (SBU) SUMMARY AND ACTION REQUEST:  The USG is presently 
continuing to review two petitions against Uzbekistan under 
the Generalized System of Preferences (GSP) program.  The 
first petition, dating to 1999, alleges Uzbekistan's failure 
to protect intellectual property rights adequately.  The 
second, a 2007 petition from the International Labor Rights 
Forum (ILRF), alleges Uzbekistan's failure to protect 
internationally recognized worker rights, in particular in 
child labor in the cotton industry.  In April 2007, the USG 
extended review of the IPR petition for another year, and 
included GSP-related instructions to Post in the 2007 Special 
301 demarche (ref A) requesting the GOU take the step of 
removing its reservation to the Berne Convention as an 
interim step.  Uzbekistan has made clear, subsequently, that 
it does not intend to lift this reservation.  As part of the 
USG's ongoing review of both GSP petitions, Post is requested 
to meet with appropriate GOU officials to call attention to 
the need for GOU steps to resolve the issues related to GSP 
eligibility alleged in the two petitions, and to underscore 
the continued USG review of the petitions.  END SUMMARY AND 
ACTION REQUEST. 
 
BACKGROUND 
----------- 
 
¶3. (U) The GSP program is designed to promote economic growth 
in the developing world, and provides preferential duty-free 
entry for more than 4,650 products from 143 designated 
beneficiary countries and territories. The GSP program was 
instituted on January 1, 1976, after being authorized under 
the Trade Act of 1974 for a 10-year period.  It has been 
renewed periodically since then, most recently in 2006, when 
President Bush signed legislation that reauthorized the GSP 
program through the end of 2008.  In 2006 Uzbekistan exported 
USD 2.8 million in products to the U.S. under GSP, or 1.8 
percent of the USD 151 million in total exports to the U.S. 
Uzbekistan's exports under GSP in 2007 are up 60 percent 
year-on-year, but admittedly starting from a small base. 
 
¶4. (U) The interagency GSP subcommittee of the Trade Policy 
Staff Committee (TPSC) reviews all accepted GSP petitions and 
submits its recommendations to the TPSC policy-level 
officials for decision.  The GSP subcommittee is chaired by 
USTR and is comprised of representatives from State, 
Treasury, Commerce, Labor, Agriculture and the U.S. 
International Trade Commission (non-voting).  At the 
conclusion of a petition's review, the subcommittee may 
recommend that the review be closed and a country's benefits 
be terminated, limited or suspended, or remain unchanged. 
One of the aims of the petition review process is to 
encourage action by the host government to address the issues 
identified in the petition with respect to the GSP 
eligibility criteria.  In this regard, therefore, the review 
process is not intended to move directly to punitive action, 
such as suspension of GSP benefits.  Rather, the GSP 
subcommittee makes every effort through engagement, such as 
demarche requests, to resolve issues in a positive way. 
However, host governments should understand that under the 
GSP statute, failure to address issues of concern can lead to 
a loss of GSP benefits. 
 
2007 Worker Rights Petition 
--------------------------- 
 
¶5. (U) In June 2007, the International Labor Rights Fund 
(ILRF) petitioned the USG for suspension of Uzbekistan's 
benefits under GSP, alleging Uzbekistan failed to take steps 
to accord workers internationally recognized labor rights as 
required by the eligibility criteria for GSP benefits.  The 
petitioner alleged more specifically that the GOU had failed 
to protect workers from compulsory labor.  The ILRF also 
criticized Uzbekistan for failing to eliminate the worst 
forms of child labor.  Under the GSP mandatory statutory 
eligibility criteria, the President shall not designate a 
country as a GSP beneficiary if the country: 1) "(H)as not 
taken or is not taking steps to afford internationally 
recognized worker rights to workers in the country...."  OR 
2) "(H)as not implemented its commitments to eliminate the 
worst forms of child labor." 
 
1999 IPR Petition 
----------------- 
 
¶6. (U) In 1999, the International Intellectual Property 
Alliance (IIPA) petitioned the USG to suspend Uzbekistan's 
GSP benefits due to Uzbekistan's failure to comply with the 
intellectual property rights eligibility requirements under 
GSP.  The statute requires countries to provide "adequate and 
effective" IPR protection.  IIPA has repeatedly highlighted 
serious deficiencies in Uzbekistan's IPR protection regime. 
 
¶7. (SBU) Since 1999, the GSP subcommittee has reviewed 
Uzbekistan's record on IPR protection with respect to the 
allegations in the IIPA submissions.  Each year, the GSP 
subcommittee has recommended the petition be extended for an 
additional year of review.  In April 2006, the United States 
provided Uzbekistan with a detailed action plan to help 
Uzbekistan improve its IP regime, with the aim of 
implementing requirements under the U.S.-Uzbekistan Trade 
Agreement and standards contained in the WTO TRIPS Agreement. 
 The USG would still like to see the GOU take steps to reach 
the goals indicated in this action plan. 
 
¶8.  (SBU) In April 2007, the GSP subcommittee extended the 
review of Uzbekistan's IPR petition for an additional year. 
The announcement of this decision was included in the 2007 
Special 301 demarche.  The GSP subcommittee recognized that 
Uzbekistan passed amendments to its Copyright law in June 
¶2006.  However, these amendments did not address concerns 
about the issue of Article 18 of the Berne Convention and 
protection for pre-existing works. Thus, in the Special 301 
demarche, the USG put particular focus on Uzbekistan 
withdrawing its reservation to Article 18 of the Berne 
Convention, and provide copyright protection for certain 
pre-existing works.  Unfortunately, Uzbekistan has made 
clear, subsequently, that it does not intend to lift this 
reservation. 
 
Action Request 
-------------- 
 
¶9. (SBU) The GSP subcommittee review of the ILRF petition is 
continuing in Washington, and the subcommittee will provide 
recommendations by June 30 on next steps.  Review of the 
long-pending IPR petition will proceed on a similar 
timeframe.  The GSP subcommittee would welcome steps from the 
GOU toward resolving the issues identified in both petitions. 
 Post is requested to meet with appropriate GOU officials to 
call attention to the need for GOU steps to resolve the 
issues related to GSP eligibility alleged in the two 
petitions, and to underscore the continued USG review of the 
petition.  It is suggested that Post draw upon the following 
suggested steps that the GOU could take to move toward 
resolution of the issues identified in the ILRF and IIPA 
petitions: 
 
Worker Rights Petition 
---------------------- 
 
-- Enforce the 2001 Government decree that prohibits anyone 
under the age of 18 from engaging in manual labor in 
hazardous occupations, including cotton harvesting, and all 
relevant laws prohibiting forced and compulsory labor, 
including by children; 
 
-- Take steps to ratify and come into compliance with ILO 
Convention 182 on the Elimination of the Worst Forms of Child 
Labor. 
 
-- Absent ratification of ILO 182, the GOU should still 
complete and promulgate a list of hazardous occupations for 
children.  In compliance with the objectives of Convention 
182, child labor in the cotton harvesting industry should be 
included on this list. 
 
-- The GOU could take steps to design and implement an action 
program to eliminate the worst forms of child labor and 
instances of forced or compulsory labor, drawing on 
assistance and advice from expert international organizations 
such as the ILO. 
 
IPR Petition 
------------ 
 
-- In April 2006, the United States provided Uzbekistan with 
a detailed action plan to help Uzbekistan improve its IP 
regime, with the aim of implementing requirements under the 
U.S.-Uzbekistan Trade Agreement and standards contained in 
the WTO TRIPS Agreement. 
 
-- The USG requests that the GOU take steps to reach the 
goals indicated in this action plan.  Embassy Tashkent is 
encouraged to obtain an update from the GOU to relay to 
Washington agencies on steps taken by the GOU on the action 
plan. 
 
-- Of high priority is that Uzbekistan withdraw its 
reservation to Article 18 of the Berne Convention, and take 
action to provide effective copyright protection for certain 
pre-existing works. 
 
-- (For Post's background and use on an as-needed basis) We 
understand the GOU has raised concerns in the past with the 
USG's own record on Berne Convention implementation.  The 
United States acceded to the Berne Convention in 1988.  While 
the Berne Convention Implementation Act of 1988 went into 
effect March 1, 1989, it did not contain provisions related 
to restoration of copyright in foreign works.  Some arguments 
were made at the time that U.S. law already complied with 
Berne Article 18.  In any event, U.S. copyright law clearly 
restored copyright to Berne-country works when the U.S. 
passed legislation implementing the WTO TRIPS Agreement in 
¶1994.  If the USG record is raised, Post should stress that 
the United States is in full compliance with Berne Article 18 
by virtue of 17 USC 104A.  The USG again offers our 
assistance in drafting a similar provision for Uzbekistan's 
copyright law. 
 
-- (For Post's background and use on an as-needed basis) We 
understand that the GOU has raised objections to what it 
terms "retroactive fines" under Berne Article 18.  Berne 
Article 18 does not require countries to impose liability on 
persons who performed acts that were legal prior to Berne 
accession, but which would be copyright infringement after 
Berne accession.  For example, if a person had reproduced a 
foreign literary work prior to accession, that person would 
not become, by virtue of accession, retroactively liable for 
that act.  However, if that same person were to reproduce 
that same foreign literary work after accession, his action 
would be copyright infringement, and should cause him to 
incur liability, although Berne Article 18(3) does allow some 
flexibility with respect to so-called reliance parties. 
Therefore, if the Government of Uzbekistan is using the term 
"fines" to refer to civil or criminal liability, fines would 
not be required for pre-accession acts, but would be required 
for post-accession infringing acts. 
RICE