Special 301 of the Trade Act of 1974 provides the United States Trade Representative with the authority to identify foreign countries that deny adequate and effective protection of IPR or fair and equitable market access to US persons that rely on IP protection. There are three categories the USTR uses to evaluate foreign countries: priority foreign countries, priority watch list, watch list and special mention.
A country identified as a priority foreign country (PFC) has the most onerous and egregious practices. Once a country is identified as a PFC, then the USTR must open a Section 301 investigation, which may lead to some form of trade sanctions.
Countries included on the Priority Watch List (PWL) do not meet all the criteria for a PFC designation, but these countries IP practices need to be monitored closely.
For more information on current (and past) Special 301 designations, please review USTR's Annual National Trade Estimate report to Congress.