China Falls Short of Promises to Protect Intellectual Property, U.S. Says - The New York Times

WASHINGTON — The Office of the United States Trade Representative criticized China, Russia and other countries on Wednesday for continuing to fall short of promises to protect intellectual property in a report that cataloged various infringements by America’s trading partners.

The annual report placed 27 trading partners on so-called watch lists for intellectual property infringement, and labeled Argentina, Chile, China, India, Indonesia, Russia and Venezuela as being on a “priority watch list” of countries that had the most egregious practices or the biggest effect on U.S. businesses.

In a call with reporters on Wednesday, senior U.S.T.R. officials said the Biden administration continued to closely monitor China’s progress in carrying out the commitments it had made to strengthen its protections for foreign copyrights, trade secrets and other forms of intellectual property in a 2020 trade deal signed with President Donald J. Trump.

The trade agreement included commitments to make reforms to China’s treatment of trade secrets, technology transfer, patents and pharmaceutical intellectual property, among a variety of issues. It followed a 2018 investigation by U.S.T.R., which found that China had pressured companies into transferring technology and used other unfair means to gain key technologies that would give its companies a competitive edge. Those findings provided the rationale for the Trump administration to begin imposing tariffs on China.

Last year, China amended various laws to strengthen its intellectual property protections in line with its commitments in the trade deal. But intellectual property owners have continued to express concerns that those measures were inadequate, U.S.T.R. said in the report. And Chinese government bodies and officials have also continued to make worrying assertions about their intellectual property system’s serving the needs of domestic innovation and providing a “strategic resource” for Chinese competitiveness abroad, the agency’s report said.

China remains the largest single source of counterfeit and pirated goods, accounting for more than 83 percent of what global authorities seized in 2020, the report said. That included medical products like Covid-19 testing kits, N95 respirator masks, sanitizers and disinfectants.

Biden administration officials have said repeatedly that China is falling short of its commitments under the trade deal and expressed frustration with a lack of progress in negotiations.

Top Biden administration officials have been discussing changes to the vast array of tariffs the Trump administration imposed on China, including offering more tariff relief for consumer goods and beginning a new investigation into China’s use of industrial subsidies. That investigation could result in more levies on strategic products, according to sources familiar with the matter.

But more than a year into office, they have yet to announce substantive changes to the terms of trade between China and the United States.

In remarks to reporters on Tuesday, Liu Pengyu, the spokesperson for the Chinese Embassy in Washington, said the tariffs violated global trade rules, dragged down the global economic recovery and would ultimately hurt U.S. businesses and consumers.

“The Biden administration will not terminate tariffs on China, but is preparing to launch a new Section 301 investigation,” he said. “Facts have proved that a tariff war cannot solve the core issue of China-U.S. economic and trade frictions, nor will it truly balance U.S. foreign trade. It will only drive up inflation in the U.S. and increase the cost of living for ordinary American consumers and families.”

The report also said that Russia was posing various challenges, including copyright infringement and trademark counterfeiting, but that the ability of the administration to raise and resolve those intellectual property issues had been severely limited by Russia’s invasion of Ukraine and the subsequent efforts by the United States and its allies to isolate Russia from the global economy. The United States is monitoring recent proposals by Russia to try to counter international sanctions by allowing its companies to violate intellectual property rights held in the United States, Europe and other countries that have imposed sanctions on Russia, the report said.

It also expressed concerns with the European Union’s “aggressive promotion” of geographical indications, or rules that require goods to be from specific regions in order to use certain product names. Rules that restrict the use of common names for products, like Parmesan or feta cheese, impose barriers for U.S.-made goods and remain “highly concerning,” the U.S.T.R. said.

The office said it would also conduct a special review of Bulgaria’s practices to assess whether it had made progress with investigating and prosecuting online piracy cases. It removed some countries from a watch list, saying they had made progress on improving rights, including Kuwait, Saudi Arabia, Romania and Lebanon.

Katherine Tai, the trade representative, said in a statement that the administration would continue to engage with trade partners to address shortcomings, and that intellectual property protection was key to more than 60 million American jobs.

“We need robust protection and enforcement in foreign countries to protect these individuals, their livelihoods, and ensure they can fairly compete in the global marketplaces,” Ms. Tai said.

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