Home>Expert Views

Cui Fan: Negotiations still best way to end disputes

Sunday,Aug 27, 2017

From: China Daily

Cui Fan, Non-resident senior fellow with the Center for China and Globalization (CCG) and a professor at the University of International Business and Economics

The latest US investigation into China’s intellectual property policies and practices under Section 301 of the Trade Act of 1974 is not the first of its kind. But the US has rarely used Section 301 against China after the latter’s accession to the World Trade Organization in 2001, because the WTO mechanism offers a fairer, more comprehensive solution to bilateral trade disputes.

Washington still has the right to invoke Section 301 because on the eve of the founding of the world trade body it promised to use it in line with WTO rules. In 2010, it said that it would initiate a Section 301 investigation into China’s green energy policies, yet the case was eventually settled through the WTO.

Beijing need not shy away from direct negotiation with Washington, though. It can resort to the WTO mechanism once the Section 301 probe triggers unilateral US action beyond the WTO rules, and submit a list of countermeasures to the world body. And since the world’s largest and second-largest economies are no strangers to trade disputes, China’s foreign investment management could even benefit from the latest US move if handled properly.

Washington’s major arguments, particularly on the compulsory transfer of US patent technology that neither the Chinese central government nor lower-level governments nor domestic companies require, are not subject to multilateral rules. And as it is unlikely that China has violated relevant WTO rules in this regard, it stands a better chance of winning the case through the WTO if the US decides to sanction Chinese enterprises unilaterally.

Still, if the WTO rules go against China based on the findings of the US probe, China will abide by and implement the ruling instead of shunning away. The fundamental cure to similar disputes, however, is still through negotiations under the Bilateral Investment Treaty, which has been stalled since Trump took office.


From China Daily,2017-8-24


  • Victor Gao: Institutional reforms to deal with new opportunities

    At the Third Plenary Session of the 19th CPC Central Committee held in Beijing from February 26 to 28, major decisions were made to conduct institutional reforms of the CPC and the Chinese Government. Institutional reform programs were adopted, and those proposals relevant to the Chinese government have been submitted to the National People’s Congress for review and approval. The NPC is right now in the process of reviewing these reform proposals for government.

  • Wang Yiwei: Belt and Road forum will clear many doubts

    This May will witness China seeking viable solutions to the problems facing the global economy at the Beijing-based Belt and Road Forum for International Cooperation, where over 20 countries’ leaders have confirmed their participation.

  • 【China Daily】Talks in U.S. ward off trade war

    Healthy economic ties between two nations beneficial for global outlook.

  • Think tank urges China to fill the TPP position vacated by US

    The Center for China and Globalization (CCG) suggests China could seize the chance to fill the position vacated by the United States at the TPP table.

  • Wang Huiyao: Think tanks as supplement to policymaking

    Chinese think tanks, be they State-sponsored or private, are inching forward in the global intellectual race. Nine of these made it to the world’s top 175 think-tank list prepared recently by the Lauder Institute of University of Pennsylvania. The university report says the United States has the largest number of think tanks (1,835) and China the second largest (435).