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U.S. Trade Talks with China Yield Additional Progress in Several Areas

Wednesday, November 25, 2015
Sandler, Travis & Rosenberg Trade Report

High-ranking U.S. and Chinese trade and agriculture officials met Nov. 21-23 in Guangzhou for the 26th session of the U.S.-China Joint Commission on Commerce and Trade. The two sides reported progress on such areas as competition, trade secrets, government support, medical devices and technology policy.

Agricultural biotechnology. The two sides reiterated their commitment to work together to further the approval process based on international standards and stressed the importance of adopting a timely, transparent, predictable and science-based approval process. They also jointly agreed to strengthen policy and information exchange; share their experiences and practices on research and development, supervision and approval; and consider domestic and international stakeholders’ comments when modifying and improving regulations.

Competition. China clarified that commercial secrets obtained in the process of Anti-monopoly Law enforcement are protected and will not be disclosed to other agencies or third parties, except with a waiver of confidentiality by the submitting party or under circumstances as defined by law. China also clarified that (1) any State Council Anti-monopoly Law Commission guidelines will apply to the three agencies that enforce the AML; and (2) it will solicit comments from relevant parties, including the public, in the process of formulating guidance related to intellectual property rights in the context of the AML.

Fisheries, timber and wildlife. The U.S. and China will enhance information exchange and cooperation under existing and appropriate agreements and mechanisms in the areas of IUU fishing, wildlife trafficking and illegal logging and associated trade. Among other actions, the two sides agreed to expand dialogue and cooperation in the effort to combat IUU fishing including by discussing cooperation in fisheries trade statistics and exchanging relevant information and data.

Food safety. The U.S. and China will, on a scientific basis, engage and cooperate on food safety issues to exchange risk communication and regulatory experiences. They will enhance implementation of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures, including through efforts to reinforce the use of scientific risk analysis in the development and implementation of food safety measures, strengthen consumer protection, and enhance public confidence in the food supply chain. 

Government support. China confirmed that the Semiconductor Industry Development Plan policies are equally applicable to and available for foreign-invested enterprises. China will publish for public comment legally binding policies and measures for promoting the semiconductor industry development in accordance with the procedures and time limits of relevant Chinese laws. It also agreed that the National Semiconductor Investment Fund will be managed by professional fund companies in a manner consistent with market-based concepts and free from government intervention into normal operational activities.

Trade secrets. China clarified that it is in the process of amending the Anti-Unfair Competition Law, intends to issue model or guiding court cases, and intends to clarify rules on preliminary injunctions, evidence preservation orders and damages. The U.S., for its part, confirmed that draft legislation proposed to establish a federal civil cause of action for trade secrets misappropriation has been introduced in relevant committees. Both sides confirmed that IP-related investigations, including on trade secrets, are conducted in a prudent and cautious manner. The two sides will jointly share experiences and practices in the areas of protecting trade secrets from disclosure during investigations and in court proceedings, and identify practices that companies may undertake to protect trade secrets from misappropriation in accordance with their respective laws.

Other IPR issues. China confirmed that it will enhance enforcement to combat the unauthorized online distribution of audiovisual content made possible by media boxes. China and the U.S. will also enhance engagement and exchanges between IPR policy and enforcement officials, IP right holders, business representatives and online sales-platform operators, among other relevant stakeholders, to address the civil, administrative and criminal enforcement challenges caused by the rapid development of e-commerce. This engagement will cover current and anticipated challenges in protecting and enforcing IPR online by sharing respective practices, discussing possible improvements in each country’s systems, facilitating information exchange and training between the two countries, and increasing cooperation on cross-border enforcement.

Pharmaceuticals and medical devices. China agreed that in the area of market access it will give imported medical devices the same treatment as those manufactured or developed domestically. China will also complete the drafting of the second batch of medical device clinical trial exemption catalogues next year in order to further expand the scope of the catalogues. For innovative medical devices, the China Food and Drug Administration will appoint dedicated personnel in the evaluation and approval process to provide guidance and promptly communicate with the applicant upon request. For other types of medical device registration applications, relevant departments of the CFDA will conduct weekly group consultations for applicants. China also agreed that the CFDA will provide no less than a 30-day public comment period for implementing departmental rules and regulations, and will also abide by its technical barriers to trade commitments.

Cosmetics. China and the U.S. agreed to hold in the first half of 2016 a dialogue in Beijing with participation from the competent U.S. and Chinese regulatory authorities as well as other government officials and stakeholders to exchange views on various issues related to cosmetics regulations, rules and regulatory practices.

Technology policy. The two sides agreed that information and communication technology information security measures generally applicable to the commercial sector are not to unnecessarily limit or prevent commercial sales opportunities for foreign suppliers of ICT products, services or technologies, and will not impose nationality-based conditions and restrictions on the purchase, sale and use of ICT by commercial enterprises unnecessarily. In addition, China confirmed that a revised draft of “the banking sector’s guidelines for promotion of the use of safe and controllable information technology (2014-2015)” will be released for a 30-day public comment period and implemented after revision. Prior to this, China suspended the implementation of these “guidelines” via a notice dated April 13, 2015.

Geographical indications. China expects to publish for public comment by the end of 2016 draft procedures providing for a third-party to cancel already-granted geographical indications.

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