IPR Remains Among Top USTR Priorities For China In 2014

The Office of the United States Trade Representative will again make intellectual property rights a top priority in trade relations with China in 2014, and will not hesitate to take actions such as to bring World Trade Organization dispute settlement cases as needed, USTR has said.

USTR’s priorities for China are listed in the 2013 USTR Report to Congress [pdf] on China’s compliance with World Trade Organization obligations. This is the 12th review of China’s implementation since it joined the WTO in December 2001.

Key developments in 2013 included China’s commitment to work on issues related to trade secret theft, and its affirmation of patent protection for pharmaceuticals, USTR said.

In 2014, China can expect a long list of continuing demands from the United States, with intellectual property rights right up there among the top issues.

The report states: “The United States will continue to engage China on important issues in the areas of investment restrictions, innovation, intellectual property rights, technology localization, industrial policies, state-owned enterprises, government subsidization, excess production capacity, administrative licensing, government procurement, taxation, standards development, express delivery services, financial services, telecommunications services, Internet-related services, legal services, pharmaceuticals, medical devices and transparency, among others. In the area of agriculture, the two sides agreed to continue their discussions on U.S. beef products, with the shared goal of achieving a resumption in market access by July 2014. The United States also will continue to seek needed improvements in China’s biotechnology approval system.”

On IP rights, USTR highlighted achievements, but said: “However, critical changes to China’s legal framework are still needed in several areas, such as further improvement of China’s measures for copyright protection on the Internet following China’s accession to the World Intellectual Property Organization (WIPO) Internet treaties, correction of continuing deficiencies in China’s criminal IPR enforcement measures, and updating and streamlining China’s laws and regulations on trade secrets.”

USTR said even existing IP laws in China continue to be plagued by lack of enforcement, leading to a further tens of billions of dollars in losses to US businesses from counterfeiting and piracy.

Other IPR areas of concern are China’s ongoing use of unauthorised software in goverment and in Chinese companies, internet intermediary liability making online “those who facilitate” online infringement liable,

And USTR continued to struggle with China’s “Indigenous Innovation” programme aimed at encouraging domestic innovation to the possible disadvantage of foreign competitors.

When continued intensive bilateral engagement fails, USTR said it is prepared to take action. It said:

“[A]s has been demonstrated, when bilateral discussions fail to resolve key issues, the United States will remain prepared to take other types of action on these issues, including WTO dispute settlement where appropriate, given the importance of an effective, TRIPS Agreement-compliant system for IPR enforcement.”