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U.S.-China Trade Meeting Yields Modest Progress

Tuesday, December 24, 2013
Sandler, Travis & Rosenberg Trade Report

The U.S. and China concluded Dec. 20 the annual meeting of their Joint Commission on Commerce and Trade. Commerce Secretary Penny Pritzker indicated that the two sides made progress during the meetings but “still have more work to do on critical issues to further our economic relationship.” U.S. Trade Representative Mike Froman added that the JCCT results “build on the progress made during Vice President Biden’s recent visit, as well as positive announcements resulting from China’s Third Plenum on promoting the reform and opening of China’s economy.” The progress achieved last week in Beijing was relatively modest partly because it was the first JCCT meeting co-chaired by Pritzker, Froman and Chinese Vice Premier Wang Yang.

A fact sheet from the Office of the U.S. Trade Representative indicates that the results from this year’s meeting include the following.

- China will accelerate its negotiation on accession to the WTO Agreement on Government Procurement and submit a revised offer in 2014 that is on the whole commensurate with the coverage of GPA parties.

- As a priority item in its 2014 action plan, China’s National Leading Group on Combating IPR Infringement and the Manufacture and Sales of Counterfeit and Substandard Goods has committed to adopt and publish an action program on trade secrets protection and enforcement that is expected to include concrete enforcement actions, improvements of public awareness about the importance of not infringing trade secrets and the penalties for infringement, and requirements for strict compliance with all laws, regulations, rules and other measures on trade secrets protection and enforcement by all enterprises and individuals.

- The U.S. and China committed to cooperate next year on proposals to amend the trade secret law as well as related legislative and policy issues. China has vowed to give serious consideration to U.S. legislative reform proposals.

-  China reaffirmed that the Chinese Patent Guidelines permit patent applicants to file additional data after filing their patent applications, and that the Guidelines are subject to Article 84 of the Law on Legislation to ensure that pharmaceutical inventions receive patent protection. China highlighted that this interpretation is currently in effect for patent examinations, reexaminations and representations before the courts. Relevant Chinese and U.S. agencies will continue to engage on specific cases.

- The U.S. and China reaffirmed their commitment to foster a better intellectual property protection environment by combating IPR infringement and counterfeit goods, with the result of facilitating the sale of legitimate IP-intensive goods and services. The two sides will conduct further discussions next year including exchanges of relevant information on detailed approaches towards this goal.

- China committed not to finalize or implement the 2012 Draft Party and Government Organ Official Use Vehicle Selection Catalogue or the 2011 Detailed Rules on the Administration of Optional Official Vehicle Catalogue for Party and Government Organs, which would have effectively excluded vehicles produced by foreign and foreign-invested enterprises from important procurement opportunities.

- The U.S. and China vowed to discuss and work towards improvements to their respective civil IP enforcement systems, including through the JCCT IPR Working Group. Among other things, the U.S. will seek enhancements to the civil IP enforcement system such as access to courts, improving discovery methods, enhancing evidence and asset preservation, and maintaining an accessible collection of decisions in IP cases.

- China has stepped up its efforts to advance innovation in the fast growing information and communications technologies sector by publishing draft guidelines for public comment to extend design-patent protection to graphical user interfaces.

- China agreed that in MIIT’s testing and network access license approval processes for 4G devices it will not require applicants to divulge source code or other sensitive business information in order to comply with ZUC provisions in the application process.

- Building on commitments made at the 23rd JCCT meeting, China reaffirmed that for future designation of CCC testing and certification organizations its review of applications from foreign-invested entities registered in China will use the same conditions that are applicable to Chinese domestic entities. The specific implementation of this commitment will take place by the spring of 2014.

- Both sides will strive for the resumption of U.S. beef access by July 2014 on the basis of mutually agreed conditions.

- China and the U.S. agreed to expand the memorandum of understanding opening the market for the sale of packaged group leisure travel from China to the U.S. to include Gansu and Qinghai provinces.

- The U.S. Trade and Development Agency signed an MOU with the Chinese Ministry of Commerce under the U.S.-China IP Cooperation Framework Agreement to provide a program of technical assistance to Chinese IP agencies, courts and the legislature on strengthening IPR protection and enforcement and adopting and maintaining innovation policies that are non-discriminatory and pro-competitive.

- Next spring the U.S. and China will continue their joint exchange on administrative licensing rules to further enhance mutual understanding of the two sides’ administrative licensing procedures and their impact on the business community.

- The U.S. and China agreed to convene the 2014 Legal Exchange in China and will work together promptly to agree on the topics of the exchange and the cities in China where it will take place.

- The two sides will seek to increase enforcement and enhance interagency coordination against counterfeit and substandard semiconductors. Cooperation on cross-border investigations relating to counterfeit and substandard semiconductors case investigations will also be increased.

- The U.S. and China agreed to continue communications and exchanges on the issue of bad faith trademark registrations through existing bilateral and plurilateral channels.

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