Memorandum on Brazil-United States Computer-Related Trade

June 30, 1987

Memorandum for the United States Trade Representative

Subject: Determination Under Section 301 of the Trade Act of 1974

Pursuant to Section 301 of the Trade Act of 1974, as amended (19 U.S.C. 2411), I have determined to suspend the intellectual property portion of the investigation of the Government of Brazil's acts, policies, and practices with respect to informatics (computer and computer-related) products. Further, I am directing the United States Trade Representative to pursue the investigation of barriers to U.S. investment in the Brazilian informatics sector. The two parts of this investigation that I suspended on December 30, 1986 -- on Brazilian administrative procedures and ``market reserve'' practices -- shall remain suspended until terminated or reopened based upon developments in those areas.

Reasons for Determination

At my direction, the Trade Representative initiated this investigation in September 1985. Based upon favorable developments regarding Brazil's administrative procedures and ``market reserve'' practices, I suspended those parts of this investigation on December 30, 1986. I indicated that those parts of the Section 301 investigation could be terminated if the improvements on which the suspension was based were properly implemented and had the expected effect of reducing the burdens or restrictions on U.S. commerce. The Trade Representative will continue to monitor developments in this area, with a view to terminating or reopening these parts of the investigation as appropriate based on developments.

Last December I directed the Trade Representative to continue negotiations with the Government of Brazil to address our concerns regarding Brazilian restrictions on U.S. investment in the informatics sector and the lack of adequate and effective protection for intellectual property, including computer software. Recently the Government of Brazil's lower house passed legislation that, we believe, would provide adequate copyright protection to computer software. Although enactment of this legislation still requires favorable action by the upper house, progress to date and the likely enactment of legislation adequately protecting computer software from piracy warrants suspension of the intellectual property portion of this investigation. The Trade Representative will continue to monitor developments in this area as well, with a view to terminating or reopening this part of the investigation as appropriate based on developments.

Regarding the Government of Brazil's restrictions on U.S. investment in the informatics sector, we have been asked to judge its performance in this area based upon a favorable ``track record'' in approving U.S. investment proposals. I am directing the Trade Representative to pursue this part of the Section 301 investigation as appropriate.

This determination shall be published in the Federal Register.

Ronald Reagan

[Filed with the Office of the Federal Register, 10:45 a.m., July 1, 1987]

Note: The memorandum was printed in the ``Federal Register'' of July 2.