US Trade Representative initiated an investigation of China

Vastavam web: US Trade Representative Robert Lighthizer has formally initiated an investigation of China’s intellectual property practices under Section 301 of the Trade Act of 1974, which will seek to determine if America’s largest trading partner has been engaging in unfair practices.

“After consulting with stakeholders and other government agencies, I have determined that these critical issues merit a thorough investigation. I notified the President that today I am beginning an investigation under Section 301 of the Trade Act of 1974,” Lighthizer said.

The memorandum had emphasised that “the US is a world leader in research-and-development-intensive, high-technology goods,” and that “violations of intellectual property rights and other unfair technology transfers potentially threaten US firms by undermining their ability to compete fairly in the global market.” It further noted that China’s conduct “may inhibit US exports, deprive US citizens of fair remuneration for their innovations, divert American jobs to workers in China, contribute to our trade deficit with China, and otherwise undermine American manufacturing, services, and innovation.”

Moreover, many US companies report facing vague and unwritten rules, as well as local rules that diverge from national ones, which are applied in a selective and non- transparent manner by the Chinese government officials to pressure technology transfer, it said.Secondly, the Chinese government’s acts, policies and practices reportedly deprive US companies of the ability to set market-based terms in licensing and other technology- related negotiations with Chinese companies and undermine US companies control over their technology in China.

The Chinese government reportedly directs and/or unfairly facilitates the systematic investment in, and/or acquisition of, US companies and assets by Chinese companies to obtain cutting-edge technologies and intellectual property and generate large-scale technology transfer in industries deemed important by Chinese government industrial plans, it said.According to USTR, the investigation will consider whether the Chinese government is conducting or supporting unauthorized intrusions into US commercial computer networks or cyber-enabled theft of intellectual property, trade secrets, or confidential business information, and whether this conduct harms US companies or provides competitive advantages to Chinese companies or commercial sectors.