US, China Trade Group Scores Successes
China agrees to remove, reduce major impediments to US exports
WASHINGTON, DC - 04/23/04 - The recently completed meeting of the US-China Joint Commission on Commerce and Trade (JCCT) achieved what the Office of the US Trade Representative (USTR) calls "concrete results on US trade concerns."
Singled out by the USTR was the "progress made by China on such issues as US participation in China's growing information technology market, protection of intellectual property rights (IPR), control of supply chains, and import approval for a number of US-sourced agricultural products."
The US-China Joint Commission on Commerce and Trade (JCCT) was set-up in 1993 as a government-to-government consultative mechanism to provide an annual forum to resolve trade concerns and promote bilateral commercial opportunities.
This year's JCCT - chaired by Commerce Secretary Don Evans, US Trade Representative Robert Zoellick, and Chinese Vice Premier Wu Yi - "achieved concrete results on key US systemic trade concerns and laid the foundation for further progress," said the USTR.
During the JCCT, China announced steps toward a market-based and technology neutral approach to the development of next generation wireless standards for computers and mobile phones - "steps that will enable American firms to participate fully in China's growing market for information technology."
According to the USTR, the proposed implementation of China's proprietary WAPI encryption standard for wireless computer networks was "indefinitely suspended" as a mandatory wireless encryption standard, while it revised its WAPI standard, taking into account comments received from Chinese companies, as well as foreign-owned firms wanting to penetrate the country's telecom market.
China also said it would participate in international standards bodies on WAPI and wireless encryption for computer networks.
With respect to third generation (3G) telecommunications standards for mobile phones, China said that it would "support technology neutrality with respect to the adoption of 3G" with telecommunications service providers in the country given the authority "to make their own choices as to which standard to adopt, depending on their individual needs."
In addition - in particularly significant move - Chinese regulators in the future will not be involved in negotiating royalty payment terms with relevant intellectual property rights holders.
China also presented an "action plan designed to address the piracy and counterfeiting of American ideas and innovations" and said it would "commit to significantly reduce" IPR infringement levels.
At the same time, the Chinese delegation said Beijing would increase penalties for IPR violations by taking the following actions by the end of 2004 - subjecting a greater range of IPR violations to criminal investigation and criminal penalties; applying criminal sanctions to the import, export, storage and distribution of pirated and counterfeit products; and applying criminal sanctions to on-line piracy.
China also said it would "conduct nation-wide enforcement actions against piracy and counterfeiting; stop the production, sale and trade of infringing products; increase Customs enforcement action against the import and export of infringing products; make it easier for rights-holders to secure effective enforcement at the border; and punish violators."
Electronic data will be protected by ratifying and implementing the World Intellectual Property Organization (WIPO) Internet Treaties "as soon as possible;" extending an existing ban on the use of pirated software in central government and provincial agencies to include local governments; and launching a "national campaign" to educate its citizens about the importance of IPR protection that will include press events, seminars and outreach through television and print media.
Under a new IPR rights working group created during the meeting, US and Chinese trade, judicial and law enforcement authorities will consult and cooperate on the full range of issues described in China's IPR action plan.
Regarding services, China agreed to "accelerate" steps necessary to allow US companies to import, export, distribute, and sell their products in China without going through local state trading companies.
When implemented, the steps will give those companies "full control of their supply chains" for goods moving from the US to Chinese consumers.
Specifically, China has "committed to implement its WTO trading rights obligations" by July 1, 2004 - six months ahead of schedule and, once those rights are in effect, free-up US companies to ship American products into China without using local middlemen.
China will also publish its draft implementing regulations on trading rights for public comment by June 1, 2004; provide distribution rights to US companies in China on schedule by the end of 2004; and publish a draft implementing regulations for distribution rights "well in advance of the implementation date."
The new distribution rights will allow US firms "to engage in wholesaling and retailing of US products directly within China, as well as providing related services," and "open its market for American shipping through a Bilateral Maritime Agreement signed during the JCCT."
This will allow US carriers to open full branches in China and to operate without restrictions.
China also agreed to implement new transparency procedures and issue product approvals that will further open its market for U.S. agricultural products.
Specifically, China agreed to issue final safety certificates for US bio-tech soybeans, ensuring opportunities for continued strong US sales to China, and announce biotech approvals for 11 upcoming US agricultural events and review two others submitted for approval when its technical committee meets in May.
In addition, the export to China of US-grown wheat, cotton, corn and other products subject to tariff rate quotas would be eased by Beijing providing the names of its domestic quota holders to US exporters "on request."
According to the USTR, US and Chinese officials will hold meetings under JCCT working groups on insurance, structural issues, agriculture, and a newly formed intellectual property body that will bring together trade, judicial, and law enforcement authorities from the US and China within the next several months.
A date will also be fixed for the next JCCT meeting and the next US-China Trade Dialogue, chaired by the Deputy US Trade Representative and China's Vice Minister of Commerce.
For further information on other results from the JCCT meeting - including export controls, structural issues, textiles and export promotion - visit the US Department of Commerce website at http://www.ita.doc.gov
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