Professor Kamil Idris Discusses China, Tariffs, and Intellectual Property
President Trump recently imposed hefty tariffs on Chinese trade, impacting goods worth over $50 billion. According to Professor Kamil Idris, director general of the World Intellectual Property Organization (WIPO), these tariffs are necessary to protect US intellectual property (IP) from theft by Chinese manufacturers.
China, like the US, is a signatory to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which sets minimum standards for regulations with which all signatories must comply. TRIPS also sets forth a number of optional enforcement mechanisms, and allows signing countries to decide for themselves which, if any, they’d like to employ.
According to Professor Idris, the Chinese government has failed in its responsibility as a TRIPS signatory to protect the intellectual property rights of the nation’s foreign trading partners. Robert Lighthizer, the US Trade Representative (USTR), conducted a seven month investigation on intellectual property theft in 2017. The investigation led to a report stating that intellectual property theft by Chinese firms costs US firms between $225 billion and 600 billion annually. Professor Idris notes that the USTR has launched formal protests of Chinese practices several times, but the problem persists.
There are several mechanisms Chinese manufacturers use to appropriate foreign IP. Counterfeiting and piracy are the most common mechanisms historically, but Professor Kamil Idris notes that forced technology transfers have become a more common method. Forced transfer refers to Chinese firms requiring foreign trade partners to send technology to China, where it can then be illicitly copied.
Another new form of IP theft Idris notes is cyber-theft, in which Chinese hackers penetrate foreign firms’ databases to steal information. Idris notes that this coincides with growing concerns about overseas hackers manipulating US elections.
Idris notes that Section 301 of the US Trade Act of 1974 gives the President the authority to impose trade sanctions as a consequence of IP rights violations, making the tariffs a legitimate enforcement mechanism.