WTO Report on US Action Against China Shows Necessity for ReformUSTR

Washington, DC – U.S. Trade Representative (USTR) Robert Lighthizer today criticized a World Trade Organization (WTO) panel report that stated that actions taken by the U.S. to combat China’s widespread and damaging theft of American technology and intellectual property were inconsistent with WTO rules.  

“This panel report confirms what the Trump Administration has been saying for four years:  The WTO is completely inadequate to stop China’s harmful technology practices,” said Ambassador Lighthizer.  “Although the panel did not dispute the extensive evidence submitted by the United States of intellectual property theft by China, its decision shows that the WTO provides no remedy for such misconduct.  The United States must be allowed to defend itself against unfair trade practices, and the Trump Administration will not let China use the WTO to take advantage of American workers, businesses, farmers, and ranchers.  It is important to note that this report has no effect on the historic Phase One Agreement between the United States and China, which includes new, enforceable commitments by China to prevent the theft of American technology.”

USTR issued a Section 301 report in 2018 documenting how China had engaged in unfair forced technology transfer practices, such as exploiting its foreign ownership and administrative requirements to extort U.S. intellectual property rights or supporting commercial cyber theft from U.S. entities.  The report cited hundreds of sources and thousands of pieces of evidence, including reports from governments, firms, business associations, think tanks and researchers, and others.  These unfair trade practices and other actions by China have cost U.S. innovators, workers, and businesses billions of dollars every year.  

The actions USTR took in response to these practices led earlier this year to the historic Economic and Trade Agreement Between the United States of America and the People’s Republic of China (the “Phase One” Agreement).

Background:  China initiated this WTO dispute - United States-Tariff Measures on Certain Goods from China (DS543) – in April 2018, and subsequently amended its request for consultations.  In January 2019, the WTO established a panel at China’s request.  The dispute covers two of the trade actions in the Section 301 investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation:  the $34 billion trade action announced in June 2018, and the $200 billion trade action announced in September 2018.