Lighthizer Investigating China For Forcing Trade Secrets from US

Lighthizer Investigating China For Forcing Trade Secrets from US

The USTR issued a statement "The investigation will seek to determine whether acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict US commerce".

Foreign companies have long complained about Beijing's failure to protect know-how and patents, and in some cases forcing firms to share information with domestic partners as the price for doing business in the massive Chinese market.

The US is China's second-largest trading partner after the European Union and it had a deficit of nearly US$310 billion (S$423 billion) previous year.

Mr Lighthizer is launching the investigation under Section 301 of USA trade law, which addresses intellectual property.

But the country has rarely used the trade tool since the World Trade Organisation began operations in 1995.

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It further noted that China's conduct "may inhibit U.S. exports, deprive United States citizens of fair remuneration for their innovations, divert American jobs to workers in China, contribute to our trade deficit with China, and otherwise undermine American manufacturing, services, and innovation".

Secondly, the Chinese government's acts, policies and practices reportedly deprive U.S. companies of the ability to set market-based terms in licensing and other technology- related negotiations with Chinese companies and undermine United States companies control over their technology in China. During the opening round of negotiations to rewrite the North American Free Trade Agreement (NAFTA), he represented the US and President Donald Trump.

"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. In response to the launch of the probe, China says it will resort to all proper measures to defend its trade rights.

"We believe that the multilateral trading system can be an important source of economic prosperity for all countries concerned", said Markus Rodlauer, deputy director in the IMF's Asia and Pacific Department.