Question

One of the current complaints of the U.S. is that China is utilizing discriminatory practices in its pursuit of technology transfers from U.S. Companies. It points to Chinese regulations that gives Chinese parties to a joint-venture agreement the right to use the technology transferred under the agreement even after its expiration.   The U.S. asserts that violates TRIPS Article 3. The Chinese have in turn complained that the U.S.'s action of imposing of a 25% tariff on Chinese goods is a violation of the WTO provision against unilateral retaliation against another WTO Member.

Explain which party should prevail and why. Limit your analysis to the facts presented here.

Answer 1

TRIPS Article 3 mentions each member shall accord to the nationals of other members treatment no less favorable than that it accords to its own nationals with regard to the protection (3) of intellectual property, subject to the exceptions already provided in, respectively, the Paris Convention (1967), the Berne Convention (1971), the Rome Convention or the Treaty on Intellectual Property in Respect of Integrated Circuits.

China is indeed a violator of this Article. Chinese regulations have always made sure that the Chinese counterparts can get the most cutting edge technology of western European countries by manipulation and deceit.

The 25% tariff on Chinese goods is also a violation of the WTO provision. But, to a great extent US has the right to put pressure on the Chinese by imposing tariffs. Technically US may also be violating the WTO provision, but it is justifiable to a great extent.