USA launches probe of China's IP practices

Minister Wang Yi answers reporter's questions during a Reuters interview in Munich Germany

The probe will likely further complicate the USA relationship with China, the country's largest trading partner. "I notified the President that today I am beginning an investigation under Section 301 of the Trade Act of 1974", Lighthizer said. Robert Lighthizer and his team will investigate whether China's intellectual property policies and practices are discriminatory and restrict US commerce. -China ties. But the United States has rarely used the trade tool since the WTO came into being in 1995.

Washington Post columnist Joshua Rogin argues that with Bannon banished, those who oppose his China policies "are positioned to reassert their control over the relationship and stifle many of Bannon's key initiatives".

"Given the increasingly converging China-US interests and the close-knit pattern of the two countries being mutually dependent, there will be no future or victor but only losers in a trade war", she warned.

Meanwhile, the global trading community had become increasingly concerned about the use of Section 301 as the USA government "acts as police force, prosecutor, jury and judge" in the process, Bown argued.

"It became no longer necessary really for the United States that they have to use that law, because now we have an effective dispute settlement system under the WTO", Chad Bown, a senior fellow at the Washington-D.C. based Peterson Institute for International Economics (PIIE) said.

China's state-run Xinhua News Agency reported on August 19 carried the USTR's investigation into infringements on intellectual property rights as the main news, worrying that the unilateral action by the administration could harm China-US trade relations. The top USA trade official, Robert Lighthizer, said his office had "determined that these critical issues merit a thorough investigation".

Secondly, the Chinese government's acts, policies and practices reportedly deprive USA companies of the ability to set market-based terms in licensing and other technology- related negotiations with Chinese companies and undermine U.S. companies control over their technology in China.

"If they (the Trump administration) become very naughty and nasty against Chinese exports, then Chinese authorities would easily imagine similar sorts of restrictions (against US exports), so this is kind of tit-for-tat situation", he said.

"If the Trump administration continues to link North Korea's nuclear weapon and missile development issues with trade, it will make the situation more complicated", the newspaper warned.

The Chinese Commerce Ministry also warned the United States that if the USA does not respect the multilateral rules and takes unilateral measures, China will never take any chances on the U.S. and use all means available to protect China's legitimate interests.

Asked about the trade investigation, the International Monetary Fund (IMF) on Tuesday reiterated its support for an open trading and investment system and the importance of working within the multilateral framework to resolve differences.



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