US launches formal trade investigation into China

WASHINGTON: US Trade Representative (USTR) Robert Lighthizer on Friday formally initiated an investigation of so-called China’s intellectual property practices under Section 301 of the Trade Act of 1974, despite worries about potential harms to China-US trade ties, China’s Xinhua news agency reported.

“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,” the USTR’s Office said in a statement.

The move comes after President Donald Trump on Monday signed an executive memorandum directing Lighthizer to consider the possible initiation of an investigation.

China has urged the United States to objectively evaluate China’s progress in the protection of intellectual property rights (IPR) and resolve the differences with China through dialogue and consultation.

“The United States should treasure the current sound SinoUS economic and trade ties and cooperation momentum. Any US trade protectionism move will surely damage bilateral ties and the interests of companies from both countries,” China’s Ministry of Commerce said in a statement on Tuesday.

Section 301, once heavily used in the 1980s and the early 1990s, allows the US president to unilaterally impose tariffs or other trade restrictions against foreign countries. But the United States has rarely used the trade tool since the WTO came into being in 1995.

“It became no longer necessary really for the United States that they have to use that law because now we have an effective dispute settlement system under the WTO,” Chad Bown, a senior fellow at the Washington-DC based Peterson Institute for International Economics (PIIE), told Xinhua in a recent interview.

Meanwhile, “the legal timeline of the process under Section 301” doesn’t work well with the rules of the WTO, said Bown, who previously worked as a senior economist in the White House Council of Economic Advisers and the World Bank.

Senior administration officials told reporters last week that the United States would first consult with China if Lighthizer decided to go ahead with an investigation, and the investigation process could take as long as a year. — Bernama

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. — Statement from USTR’s Office