U.S. Flags Vietnam as “Priority Foreign Country” Over Intellectual Pro...

The Office of the United States Trade Representative (USTR) has officially designated Vietnam as a “Priority Foreign Country” in its latest annual intellectual property (IP) report, signaling heightened concern over the country’s IP practices and raising the possibility of a new trade investigation. This classification represents the most serious level of scrutiny under U.S. trade law and is reserved for nations with the most significant violations affecting American businesses and products.

According to the USTR, the designation reflects Vietnam’s alleged failure to adequately protect intellectual property rights and its lack of meaningful progress in negotiations aimed at resolving these issues. The agency emphasized that countries placed in this category are those not engaging in good faith efforts to improve IP enforcement or compliance. Notably, this marks the first time in 13 years that any country has received the “Priority Foreign Country” label, underscoring the severity of the concerns.

The USTR stated it will determine within 30 days whether to launch a formal investigation under Section 301 of the Trade Act of 1974. If initiated, the process would involve consultations with Vietnamese authorities to address the policies and practices that led to the designation. Such investigations can potentially result in trade sanctions or other enforcement actions if disputes remain unresolved.

In contrast, the report highlighted progress in other regions. Argentina and Mexico were removed from the “priority watch list” due to improvements in their intellectual property frameworks. Mexico, in particular, welcomed the decision as it coincides with an ongoing review of the United States-Mexico-Canada Agreement (USMCA), a key regional trade pact.

Meanwhile, countries including China, India, Indonesia, Chile, Russia, and Venezuela remain on the “priority watch list,” indicating continued concerns but at a lower level of severity. Additionally, 19 other trading partners were placed on the standard “watch list,” with the European Union newly added this year.