No spillover---IP is insulated, tariffs aren’t used in response and IP agencies are cooperative.

It is important to recognize that IP-related engagement has been ongoing with China throughout the trade war. The U.S. Patent and Trademark Office has had cooperative relationships with China’s IP agencies for many years. It also meets with China and the three other largest patent, trademark, and design protection offices in the world on an annual basis.

What the USTR sometimes lacks in depth on IP issues, it compensates for with a comprehensive perspective on U.S.-China trade relations and the possibility of bringing WTO disputes or even unilateral retaliation. The system works best when all government agencies are interacting and working from the same page and utilizing all available tools—diplomacy, trade disputes, technical engagement, research, and even training.

Sanctions imposed by the United States worked to accelerate Chinese IP reforms. They also put pressure on China in a range of other areas, though USTR Tai has indicated that China has not fulfilled its purchase commitments. However, lumping IP with purchasing soybeans suggests the problems are equally self-evident, when they are clearly not. Understanding how China’s IP system works requires more patience and attention to China’s own domestic court system. I hope that the U.S. government maps out a strategy to engage China on IP issues that is less dependent on trade sanctions and other weapons.

It is unclear how a U.S. withdrawal from engaging China on IP would affect Americans. China’s IP regime will continue to reform without U.S. pressure, in ways that the United States may like or dislike. Problems of transparency will remain. Stormy bilateral relations will continue to have an impact on the nature of the engagements on IP and many other issues. China also appears intent to join plurilateral trade agreements, which may include extensive IP commitments, whereas the United States backed out of the Trans-Pacific Partnership (TPP).

It is important to note that before the trade war, IP-related engagement was a strength of U.S.-China trade relations. The United States facilitated many reforms without having to impose sanctions. This included establishing specialized IP courts, protecting design patents for graphical user interfaces, supporting China’s emerging system of case law, improving the system for legitimate technology transfer, and many other areas. The Track 2 U.S.-China IP Dialogue, of which I am a part, was instrumental in introducing amicus briefs to China’s court system and in recognizing the importance of protecting personality rights (such as one’s name) in trademarks.