Bloomberg News

U.S.-China Trade Talks End With Promise to Protect IP Rights

November 29, 2011

(Updates in first paragraph with details of agreements reached in talks.)

Nov. 21 (Bloomberg) -- China pledged to improve its monitoring of intellectual property rights in trade talks with the U.S., as American officials called on the world’s second biggest economy to abide by international trade rules.

Chinese Vice Premier Wang Qishan’s promise to create and lead an office focused on protecting intellectual property rights was a “step in the right direction,” U.S. Secretary of Commerce John Bryson said in an interview today with Bloomberg Television after the 22nd U.S.-China Joint Commission on Commerce and Trade meeting in Chengdu.

“There’s no question that intellectual property rights have not been respected for the most part here in China,” Bryson said. “We think this is a step in the right direction but there is a long ways to go in having intellectual property rights consistently and broadly recognized in China.”

Bryson said earlier in the day that many in the American business community and in Congress are “moving toward a more negative view of our trading relationship” that can only be changed through addressing trade concerns. Wang said his government has made progress in fighting intellectual property violations and called on the U.S. to increase exports of high- tech products.

Doubling Exports

President Barack Obama on Nov. 19 concluded a nine-day Asian trip in which he emphasized the need for China, the world’s fastest-growing economy, to “play by the rules” on trade and territorial disputes. He met separately with Chinese President Hu Jintao and Premier Wen Jiabao, and discussed currency issues and business practices.

Obama has set a goal of doubling U.S. exports to $3.14 trillion a year by the end of 2014 and has said Asia is key to achieving that goal. While the U.S. this year has exported more to the Pacific Rim than to Europe, Commerce Department figures show, its trade deficit with China last year was $273 billion.

“With that extraordinary growth that China has enjoyed over the last decade comes a responsibility, particularly as it relates to trade and investment,” said U.S. Trade Representative Ronald Kirk, who also participated in the Bloomberg Television interview.

Bird Logo

Underscoring the difficulty the U.S. will have in getting China to clamp down on intellectual-property theft, the talks took place in a hotel that is home to an “Amornini” clothing store that features a bird logo which closely resembles that of the Milan-based Giorgio Armani SpA fashion house.

China’s Deputy Commerce Minister Wang Chao said his country would push measures to protect trademarks and intellectual property on the internet. He said steps to ensure software legalization in all government offices at the provincial level would be completed by the end of 2013.

Vice Premier Wang said commerce is an “important cornerstone in the China-U.S. relationship,” noting that trade between the two rose 17 percent in the first 10 months of 2011 to $363.1 billion. Wang Chao said the U.S. had agreed to have 50 more visa officers for China in an effort to speed up visa approvals for Chinese visitors.

Yuan Dispute

Obama told Hu in Honolulu this month that the U.S. public and businesses were losing patience with China’s policies. Afterward, the Chinese Foreign Ministry released a statement saying the U.S. trade deficit and unemployment aren’t caused by the yuan exchange rate and a large appreciation in the currency won’t solve U.S. problems.

China’s currency is allowed to fluctuate 0.5 percent on either side of the daily fixing rate set by the central bank. The yuan has appreciated 3.86 percent against the dollar this year, according to Bloomberg data, the best performance of 10 Asian currencies tracked by Bloomberg. It has risen 30 percent since being revalued in July 2005.

During the talks, China also said it would not require foreign automakers to transfer their technology when entering the market, and would make them eligible for subsidies and incentives, Kirk said. They also will not need to establish Chinese brands, he said.

The country will also consider lifting poultry export bans on some U.S. states and open the market to more beef exports, U.S. Agriculture Secretary Tom Vilsack said.

China will invest $1.7 trillion in “strategic emerging industries” including clean energy and clean energy technology, Bryson said.

--Nicholas Wadhams. Editors: Nicholas Wadhams, Peter Hirschberg

To contact Bloomberg News staff for this story: Nicholas Wadhams in Beijing at nwadhams@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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