By Andrea Shalal

WASHINGTON (Reuters) -The U.S. Trade Representative's office on Tuesday placed Mexico on its priority watch list on intellectual property rights citing longstanding concerns over enforcement against trademark counterfeiting and protection of pharmaceutical-related IP.

USTR's annual report now lists eight countries on its priority watch list for deficiencies and violations of IP rights, and 18 countries on its watch list. The lists are drawn up each year after research and analysis of more than 100 trading partners.

The concerns could factor into the Trump administration's negotiations with many countries over tariffs and non-tariff barriers, giving the report greater significance this year.

U.S. Treasury Secretary Scott Bessent on Monday said the administration was in discussions with 15 to 18 key trading partners over the hefty U.S. tariffs announced by President Donald Trump on April 2 but suspended until July 8.

The priority list now includes Mexico, China, Chile, Argentina, India, Indonesia, Russia and Venezuela.

"Our trading partners must address the concerns identified in the Special 301 Report and stop those stealing the intellectual property of hard-working businesses and individuals," said U.S. Trade Representative Jamieson Greer.

"This comprehensive report is a basis for the United States to take trade enforcement action against those not playing fairly."

Mexico, which had been on the watch list for several years, was moved to the higher priority group, USTR said, citing what it called "longstanding and significant concerns that have not been resolved, many of which relate to Mexico's implementation of the United States-Mexico-Canada Agreement (USMCA)."

Trump slapped Mexico with 25% tariffs in March over its failure to halt exports of fentanyl, much of which is shipped from China. Trade compliant with USMCA is exempted from the additional tariff although duties on energy and potash stand at 10%.

USTR said the specific concerns on Mexico centered on enforcement against trademark counterfeiting and copyright piracy, protection of pharmaceutical-related IP, pre-established damages for copyright infringement and trademark counterfeiting, as well as plant variety protection.

It kept China - currently facing 145% tariffs on goods it ships to the United States - on the priority watch list, it said, citing the slow pace of reform and persistent concerns about forced technology transfer, trade secrets, counterfeiting, online piracy and copyright law, among others.

It said that Beijing had failed to implement or only partially implemented a number of its commitments on intellectual property under the Phase 1 U.S.-China trade deal.

USTR removed one country, Turkmenistan, from the main watch list, noting that stakeholders had not raised significant concerns about IP protection or enforcement there in recent years.

Vietnam and Brazil remained on the list, which also includes Algeria, Barbados, Belarus, Bolivia, Bulgaria, Canada, Colombia, Ecuador, Egypt, Guatemala, Pakistan, Paraguay, Peru, Thailand, Trinidad and Tobago and Turkey.