Multilateral action on IP is goldilocks for countering China while getting them to agree to international reform

How can the United States better cooperate with other countries to either change or respond to unfair Chinese IP practices?

In July 2021 the European Union formally raised concerns at the WTO about the increasing aggressiveness of Chinese courts in their issuance of global ASIs and the lack of publication of critical IP cases affecting foreigners. However, when the EU filed a transparency request, the United States declined to support it. Despite its many challenges, the WTO remains an important venue to raise issues multilaterally and can still be used to resolve IP-related disputes. This was evidenced when the United States achieved a notable success in a dispute over Chinese technology licensing at the WTO during the Trump administration.

Many people also suggest that the United States should reconsider its position on joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). China has expressed an interest in joining, and already has an extensive free trade agreement in Asia, the Regional Comprehensive Economic Partnership (RCEP). The United States needs to consider what its role is in multilateral trade agreements and reassume a leadership position where it can effectively raise concerns about China.

The United States also may wish to rethink certain elements of U.S. IP and trade diplomacy. If our sanctions leverage has been compromised with China, we may find that it is difficult to “jaw-jaw” in light of our trade “war-war.” We should also be careful about the kinds of requests we make of China or other countries that may have little impact or are incapable of being effectively monitored.

As technology becomes increasingly key to U.S. trade diplomacy, the United States should be encouraging trading partners to develop stronger IP regimes to better protect IP-intensive goods that rely on extended supply chains to be produced. This means working more closely with countries like Mexico, Vietnam, and India so that the lessons we have experienced in China are not repeated and that these countries become reliable manufacturing and technology partners.

I would also like to see the U.S. government develop a deeper understanding of the competitive threats posed by China in civil and military technology, including the close relationship between these two types of technology. One step in that direction would be working with allies to develop more harmonized export control, investment, and technology transfer regimes, including developing a common nomenclature to describe technologies. One promising example is the Cooperative Patent Classification system, which describes over 250,000 technologies and is in current use in the EU and the United States. It is continually being expanded to include new technologies, and it maps to patent classifications used by other countries as well as to tariff and industrial classifications.

By using a common nomenclature, the United States and its allies can better assess how China’s trade, industrial policy, talent, and other programs overlap in a more granular manner. We can also evaluate the United States’ and China’s relative strengths and weaknesses in technological research, patenting, and licensing. We need a better understanding of how our IP systems and other systems overlap in a global economy.