China IP Reform Using Section 301 of the Trade Act of 1974

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China IP Reform Using Section 301 of the Trade Act of 1974

Washington, DC

The Problem

As representatives of the U.S. business community, we continue to have serious concerns regarding China’s trade policies and practices, including market access barriers and statedirected investment policies, technology transfer and data localization mandates, policies and practices that prevent setting market-based terms in licensing and technology-related negotiations, and theft of trade secrets and other intellectual property. These persistent problems jeopardize U.S. global competitiveness, innovation, productivity, and cybersecurity. We recognize the U.S. Government’s examination of these issues through the 301 process, and support an effort to address China’s discriminatory practices. The imposition of sweeping tariffs would trigger a chain reaction of negative consequences for the U.S. economy, provoking retaliation; stifling U.S. agriculture, goods, and services exports; and raising costs for businesses and consumers. The Administration should not respond to unfair Chinese practices and policies by im

Pinned Solution

Jun 16th, 2018
National Retail Federation
Posted suggestion on Jun 16th, 2018
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There are alternatives to address China’s policies and practices that would not have the same adverse impacts on U.S. consumers, businesses, and local communities or undermine the benefits of the tax reform. In particular, it is critically important that the Administration work with likeminded partners to address common concerns with China’s trade and investment policies. Imposition of unilateral tariffs by the Administration would only serve to split the United States from its allies, hinder joint action to effectively address shared challenges, and ensure that foreign companies take the place of markets that American companies, farmers and ranchers must vacate when China retaliates against U.S. tariffs. We urge the Administration not to impose tariffs and to work with the business community to find an effective, but measured, solution to China’s protectionist trade policies and practices that protects American jobs and competitiveness.

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Wall Street Journal
Posted suggestion on Jul 6th, 2018
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China is guilty of abusing the trading system, including the use of nontariff barriers and arbitrary enforcement to put foreign companies at a disadvantage. Working out a new trading arrangement that stopped this misbehavior would be constructive. But to succeed the U.S. would need a united front with allies and trading partners to press China to obey World Trade Organization rules, or establish some new ones.

The best way out of this showdown is for the two sides to call a truce and negotiate a new trade understanding. Yet neither Donald Trump nor Xi Jinping wants to look like the one standing down, so escalation is more likely than retreat. As the tariff casualties mount, even many Trump voters are going to ask: When is the master negotiator actually going to negotiate a better trade deal?

Martin Feldstein
Posted suggestion on Jul 5th, 2018
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A more judicious use of tariffs would give the Chinese government an incentive to stop stealing the intellectual property of U.S. companies. China now requires U.S. firms operating in China to form a “partnership” with a Chinese counterpart and share their technology with it. The Chinese use that stolen technology to compete with American firms in China and around the world. The threat of punitive tariffs could lead the Chinese government to agree to allow U.S. firms to operate in China without local partners. If China did not live up to the agreement, the tariffs could be reimposed. At their 2013 California summit, the U.S. and China issued a communiqué stating that neither government would support cybertheft for commercial purposes.

American policy to block the theft of U.S. technology is legitimate and desirable. But it is not the same as a U.S. policy to try to prevent China from achieving its “Made in China 2025” goal of becoming a global leader in high-tech industries through its own research and investments. If the U.S. wants to retain the lead in technology manufacturing and services, it should support education in the U.S. and provide incentives for American firms to do the necessary investments and research.

Donald J Trump
Posted suggestion on Jun 16th, 2018
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The United States Trade Representative shall determine, consistent with section 302(b) of the Trade Act of 1974 (19 U.S.C. 2412(b)), whether to investigate any of China's laws, policies, practices, or actions that may be unreasonable or discriminatory and that may be harming American intellectual property rights, innovation, or technology development. 

Endorsers

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Official Replies

11

Donald Trump, President of the United States of America
Replied on August 14, 2017

The theft of intellectual property by foreign countries costs our nation millions of jobs and billions and billions of dollars every year. For too long, this wealth has been drained from our country while Washington has done nothing.

Robert Lighthizer, U.S. Trade Representative
Replied on August 14, 2017

We will engage in a thorough investigation and, if needed, take action to preserve the future of U.S. industry. Thousands of jobs are at stake for our workers and for future generations. This will be one of USTR's highest priorities, and we will report back to the president as soon as possible.

Donald Trump, President of the United States of America
Replied on April 2, 2018
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!
Robert Lighthizer, U.S. Trade Representative
Replied on April 3, 2018

The proposed list is based on extensive interagency economic analysis and would target products that benefit from China’s industrial plans while minimizing the impact on the U.S. economy. Sectors subject to the proposed tariffs include industries such as aerospace, information and communication technology, robotics, and machinery. The total value of imports subject to the tariff increase is commensurate with an economic analysis of the harm caused by China’s unreasonable technology transfer policies to the U.S. economy, as covered by USTR's Section 301 investigation.

Donald Trump, President of the United States of America
Replied on April 4, 2018

We are not in a trade war with China, that war was lost many years ago by the foolish, or incompetent, people who represented the U.S. Now we have a trade deficit of $500 billion a year, with intellectual property theft of another $300 billion. We cannot let this continue! When you’re already $500 billion DOWN, you can’t lose!

Steven Mnuchin, U.S. Treasury Secretary
Replied on May 20, 2018
We’re putting the trade war on hold. The President could always decide to put the tariffs back on if China doesn’t go through with their commitments.
Robert Lighthizer, U.S. Trade Representative
Replied on June 15, 2018

We’re going to stop, we hope, their transfer of technology—their forced transfer of technology.

Donald Trump, President of the United States of America
Replied on June 19, 2018

This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376 billion trade imbalance in goods. This is unacceptable. Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States If China increases its tariffs yet again, we will meet that action by pursuing additional tariffs on another $200 billion of goods. The trade relationship between the United States and China must be much more equitable.

Donald Trump, President of the United States of America
Replied on June 25, 2018

These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs.  In addition, they will serve as an initial step toward bringing balance to the trade relationship between the United States and China.  The United States can no longer tolerate losing our technology and intellectual property through unfair economic practices.

Zhong Shan, Minister of Commerce
Replied on July 6, 2018

China will not fire the first shot, but in order to safeguard the country’s core interest and its people’s interest, China is being forced to strike back as necessary.

Supporting Info

07-05-2018
Wall Street Journal

07-06-2018
Wall Street Journal

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