Tuesday, July 10, 2007

Sino-American WTO Consultations Disaster, Blame Game Ensues

April 10, the US filed two formal complaints against China at the WTO, one for unsufficient IP and one for lack of market access for copyrighted goods.
After a formal complaint at the WTO the two parties had 60 days for consultations. The US and China only took two days (5-6 June about market access and 7-8 June about China's IP protection) to actually speak to each other face to face. Which is rather short, considering the interests at stake. The consultations failed miserably.

On June 10, Xinhua published 'China, US hold consultations on IPR' in which is China's stance on the WTO case is given:
  • China has always attached great importance to the protection of IP;
  • Since its accession to the WTO, China has honored its WTO commitments and undertaken international obligations on intellectual property rights (IPR) and made great achievements on IPR legislation and enforcement which are well recognized and highly valued by the entire world;
  • China justifies its approach toward IPR protection with the last sentence of article 1 (1) TRIPs: Members hall give effect to the provisions of this Agreement. Members may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement. Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice;
  • China suggests that an "other WTO member" (read including US) want to impose additional obligations beyond the TRIPs Agreement through inappropriate application of the WTO dispute settlement mechanism;
  • China believes that the impact resulted from these TRIPs plus demands would by no means be accepted by other developing members (so China is seeing itself as a developing WTO member which should be treated differently from developed WTO members).

In short: We always thought IP protection important, we hounered our WTO commitments, and we have come a long way, TRIPs is saying we can do it our own way, we don't have to go beyong the TRIPs obligations, especially not as the developing country we are.

Read the Xinhua article via ChinaDaily here.

On July 3, Tian Lipu, director of the State Intellectual Property Office (SIPO) urges the US to withdraw its formal complaint at the WTO, according to Xinhua. "As far as I know, negotiators from China and the US are still in the consultation stages within the WTO framework," Tian said, speaking at a seminar organized by the World Intellectual Property Organization (WIPO) and SIPO in Beijing." (which conflicts with the Xinhua article of June 10 mentioned above) and "Tian said it was unreasonable for the United States to ignore the huge progress achieved by China in IPR protection."
Read the Xinhua article here.

How long to settle a dispute?

60 days - consultations, mediation, etc.
45 days - panel set up and panellists appointed
6 months - final panel report to parties
3 weeks - final panel report to WTO members
60 days - Dispute Settlement Body adopts report

Total = 1 year (without appeal)
60-90 days Appeals report
30 days Dispute Settlement Body adopts appeals report
Total = 1y 3m
(with appeal)

Source: WTO and h/t William New of Intellectual Property Watch.

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