OFFICE of the UNITED STATES TRADE REPRESENTATIVE EXECUTIVE OFFICE OF THE PRESIDENTFINDINGS OF THE INVESTIGATION INTO CHINAS ACTS, POLICIES, AND PRACTICES RELATED TO TECHNOLOGY TRANSFER, INTELLECTUAL PROPERTY, AND INNOVATION UNDER SECTION 301 OF THE TRADE ACT OF 1974March 22, 2018Acronym3PLA 4WD AAFA ABA ABC ABPIA ACC AEI AGIC AI AmCham AML AMSC APEC APT AQSIQ ATI AVIC AVICEM AWD BCM BEA BGI BIO BIS BoC BRI BRIC C (ii) acts, policies or practices that are unjustifiable (defined as those that are inconsistent with U.S. international legal rights) and that burden or restrict U.S. Commerce; and (iii) acts, policies or practices that are unreasonable or discriminatory and that burden or restrict U.S. Commerce. 2 The third category of conduct is most relevant to this investigation.Section 301 defines “discriminatory” to “include, when appropriate, any act, policy, and practice which denies national or most-favored nation treatment to United States goods, service, or investment.”3 An “unreasonable” act, policy, or practice is one that “while not necessarily in violation of, or inconsistent with, the international legal rights of the United States is otherwise unfair and inequitable.”4 The statute further provides that in determining if a foreign countrys practices are unreasonable, reciprocal opportunities to those denied U.S. firms “shall be taken into account, to the extent appropriate.”5If the USTR determines that the Section 301 investigation “involves a trade agreement,” and if that trade agreement includes formal dispute settlement procedures, USTR may pursue the investigation through consultations and dispute settlement under the trade agreement. Otherwise, USTR will conduct the investigation without recourse to formal dispute settlement.Moreover, if the USTR determines that the act, policy, or practice falls within any of the three categories of actionable conduct under Section 301, the USTR must also determine what action, if any, to take.6 For example, if the USTR determines that an act, policy or practice is unreasonable or discriminatory and that it burdens or restricts U.S. commerce,The Trade Representative shall take all appropriate and feasible action authorized under Section 301(c), subject to the specific direction, if any, of the President regarding any such action, and all other appropriate and feasible action within the power of the President that the President may1Unless otherwise specified, “Section 301” refers generally to Chapter 1 of Title III of the Trade Act of 1974 (codified as amended in 19 U.S.C. 2411-2417). Furthermore, for ease of reference, full citations are used throughout this report. 23Trade Act of 1974, 19 U.S.C. 2411(a)-(b). 19 U.S.C. 2411(d)(5). Section III describes discriminatory acts, practices, and policies of the Chinese government. 45619 U.S.C. 2411(d)(3)(A). 19 U.S.C. 2411(d)(3)(D). For example, in 2014, USTR determined that action against Ukraine was not appropriate due to the political situation. See Notice of Determination in Section 301 Investigation of Ukraine, 79 Fed. Reg. 14,326-27 (Mar. 13, 2014).319 U.S.C. 2411(b)(2). See Addressing Chinas Laws, Policies, Practices, and Actions Related to Intellectual Property, Innovation, andI.Overviewdirect the Trade Representative to take under this subsection, to obtain the elimination of that act, policy, or practice.7Actions specifically authorized under Section 301(c) include: (i) suspending, withdrawing or preventing the application of benefits of trade agreement concessions; (ii) imposing duties, fees, or other import restrictions on the goods or services of the foreign country for such time as deemed appropriate; (iii) withdrawing or suspending preferential duty treatment under a preference program; (iv) entering into binding agreements that commit the foreign country to eliminate or phase out the offending conduct or to provide compensatory trade benefits; or (v) restricting or denying the issuance of service sector authorizations, which are federal permits or other authorizations needed to supply services in some sectors in the United States.8 In addition to these specifically enumerated actions, the USTR may take any actions that are “within the Presidents power with respect to trade in goods or services, or with respect to any other area of pertinent relations with the foreign country.”9B. Background to the InvestigationOn August 14, 2017, the President issued a Memorandum to the Trade Representative stating inter alia that:China has implemented laws, policies, and practices and has taken actions related to intellectual property, innovation, and technology that may encourage or require the transfer of American technology and intellectual property to enterprises in China or that may otherwise negatively affect American economic interests. These laws, policies, practices, and actions may inhibit United States exports, deprive United States citizens of fair remuneration for their innovations, div