The United States alleges discriminatory technology licensing requirements by Chinese officials. A large concern of U.S. officials involves alleged Chinese mandates concerning transfers of technology.
There have been a number of complaints by foreign corporations that they must transfer technology to Chinese partners. President Trump states that such practices are in part the reason for imposing high tariffs upon manufactured Chinese products.
Resolving disputes at the WTO
The U.S. hopes to address such allegations before the World Trade Organization (WTO). There was a March 23 filing of a request by the U.S. with the WTO for consultations with China.
According to one commentator in the South China Morning Post, it will be difficult for the United States to prove China’s engagement in a number of unfair intellectual property practices. However, there is a possibility of an agreement by the opposing nations prior to any hearings at the WTO.
WTO rules provide for a 60-day consultation period in an attempt to reach consensus. Consultations in front of the WTO allow for a possible way to resolve disputes. The U.S. has resolved a similar dispute with China at the WTO in 2007. That prior action resulted in China instituting tougher restrictions concerning copyright infringement.
The consequences of a possible trade war between the U.S. and China
We will have to wait and see to find out the end result of the above dispute. It could result in further complications. One economist describes it as a risk “of some kind of technological cold war.”
Whether China is or is not engaging in mandating transfers of technology, doing business in China and also hoping to protect one’s own trade secret information is exceedingly difficult. It is important to have on your side an attorney experienced in representing companies doing business in China. It’s especially vital to receive advice and guidance from professionals who understand Chinese laws and customs when it comes to doing business.