U.S. Trade Officials Meet with Chinese Counterparts and Report on China’s WTO Compliance by T. Augustine Lo

by King & Spalding
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On December 18, 2012, USTR Ambassador Ron Kirk and U.S. Commerce Department Acting Secretary Rebecca Blank commenced a two-day meeting with Chinese Vice Premier Wang Qishan held in Washington, DC. This meeting between U.S. and Chinese officials was the twenty-third such encounter under the rubric of the Joint Committee on Commerce and Trade (“JCCT”). The USTR also issued a report on China’s WTO compliance the same month.

The JCCT’s broad range of topics related to access for U.S. imports and investments in China. One such topic included the protection of U.S. IPR. The USTR reported that the Chinese participants committed to requiring state-owned enterprises to use legitimate software and to refrain from requiring technology transfers and technological cooperation as conditions for U.S. companies to obtain market access.

The two sides also discussed government procurement, but it appears that they have not resolved remaining disagreements that prevent China’s accession to the WTO Government Procurement Agreement (“GPA”). The U.S. government expresses concern that Chinese law defines government procurement more narrowly than the GPA.

With respect to broader policy concerns, U.S. officials indicated that China’s industrial plan for strategic emergent industries may discriminate against foreign companies in the same industries. In response, the Chinese government committed to using industrial development policies that comply with WTO national treatment rules so as to grant foreign participants equal access to the same projects. The Chinese government also stated its intention to continue holding talks with the U.S. government on other issues, such as the Chinese value-added tax system that favors exporters, market access for U.S. agricultural and biotechnology products, and significant administrative hurdles against foreign companies.

Around the same time as the JCCT meeting, USTR released its report on China’s compliance with its WTO obligations. The report noted recent progress, listing the commitments expressed by the Chinese government during the JCCT. The report also identified many of the same concerns raised during the JCCT as priority issues for the United States. In particular, the report notes continuing difficulties in protecting U.S. IPR in China and protecting against theft of trade secrets. USTR’s report discussed issues such as China’s industrial policies, continuing administrative obstacles against foreign investments in certain protected industries, procedural defects in China’s trade remedy cases, and obstacles to entry for agriculture products.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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