Trade agreement discussed by Stephen Kho and Clete Willems, as reported by Law360 in reference to the "Phase One" deal.
The United States and China are set to sign a preliminary trade agreement this week, marking a significant step towards resolving their long-standing trade dispute. The deal, reached last month, is expected to address a range of issues, including intellectual property protection, technology transfer, and joint venture requirements.
One of the key concerns about the agreement is its ability to prevent a re-escalation of tariffs, raising questions about the utility of the agreement overall. The success of the deal will depend heavily on its ability to address these longstanding issues effectively.
Clete Willems, a public law and policy partner at Gump, observes that the deal should address the issue of China insisting on companies turning over sensitive technology as a condition of doing business. It is important to ensure that the agreement includes provisions for a real avenue for U.S. firms to obtain licenses, he notes.
The enforcement mechanism in the agreement is a political test, as it remains to be seen if the other party will continually retaliate or pull out of the agreement altogether. Clete Willems is eager to see if the enforcement mechanism in the agreement is built to handle a high volume of trade fights. There is a concern that China may get rid of equity caps but not grant licenses to U.S. firms.
The agreement should require China to issue licenses to companies on an equitable basis. The concern about the enforcement mechanism's durability is whether it will maintain durability in the face of repeated use or potential retaliation.
The deal does not address how the agreement will trickle down into the provinces and localities, a concern raised by some experts. It is important to ensure that the agreement is implemented effectively at the provincial and local levels to ensure its success.
The phase-one deal is also expected to address rules pertaining to joint venture requirements and limits on controlling ownership. The agreement includes a chapter addressing financial services, which is a significant step towards opening up China's financial sector to foreign investment.
The standoff between the United States and China was primarily due to China's insufficient protection for foreign intellectual property. The agreement is a positive step towards addressing this issue, but it remains to be seen how effective it will be in practice.
The trade agreement between the United States and China was reached amidst the use of tariffs as a means of forcing China to the negotiating table by the Trump administration. The agreement's success will depend on its ability to address longstanding issues between the two countries, including intellectual property protection and technology transfer.
The article was published by Law360. The history of China insisting on companies turning over sensitive technology as a condition of doing business has been a point of contention in the trade dispute. It is crucial that the agreement includes provisions to address this issue effectively.
In conclusion, the US-China trade agreement is a significant step towards resolving the long-standing trade dispute between the two countries. However, the success of the agreement will depend heavily on its ability to address longstanding issues effectively and be implemented at the provincial and local levels. The enforcement mechanism in the agreement will also be a political test, as it remains to be seen if the other party will continually retaliate or pull out of the agreement altogether.
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