The annual report names and shames governments that the US believes have failed to do enough to tackle IP infringement.

The 2008 Special 301 Report, released by the United States Trade Representative (USTR) on Friday, moves Egypt, Lebanon, Turkey and the Ukraine from the Priority Watch List to the Watch List, reducing their risk of being hit by US trade sanctions.

Two other trading partners – Belize and Lithuania – are removed from the Report altogether.

But the report once again highlighted Russia and China as countries of concern.

While commending both countries for improving their IP regimes, the USTR will keep them on its Priority Watch List, reserved for countries it thinks are the worst IP infringers.

Other countries that remain on the Priority Watch List this year are Venezuela, Argentina, Chile, India, Israel and Thailand. They are joined in 2008 by Pakistan, which the USTR says has failed to provide effective protection against unfair commercial use of undisclosed test and other data generated to obtain marketing approval for pharmaceutical products.

The US government will also conduct out-of-cycle Reviews for Taiwan and Israel to assess progress on specific IP issues. The USTR said that it wants to consider whether to remove Taiwan from the Watch List, after the country’s politicians passed tougher laws against peer-to-peer file sharers.