The U.S. and China Hold the 22nd Meeting of the JCCT in Chengdu, China, on November 20 to 21, 2011
On November 20 to 21, 2011, the United States and China held the 22nd meeting of the Joint Commission on Commerce and Trade (JCCT). The meeting addressed areas of concern in the development of rule of law in China, including China's failure to protect intellectual property rights (as required under China's WTO commitments), market access on a level playing field in strategic emerging industries such as new energy vehicles, and innovation. However, the JCCT's achievements were reportedly modest.
Background on the JCCT
The JCCT, or Joint Commission on Commerce and Trade, a high-level forum for addressing concrete trade issues between the United States and China, was held in Chengdu municipality, Sichuan province, China, on November 20 to 21, 2011. The JCCT was co-chaired on the U.S. side by Secretary of Commerce John Bryson and U.S. Trade Representative Ron Kirk, and was chaired on the Chinese side by Vice Premier Wang Qishan. U.S. Secretary of Agriculture Tom Vilsack also participated. The annual JCCT is focused on concrete trade issues, unlike the other annual dialogue on economic issues, the S&ED, or Strategic and Economic Dialogue, which addresses broader economic issues of interest in the U.S.-China relationship. On November 21, the U.S. Department of Commerce issued a trade fact sheet outlining outcomes of the JCCT and a signing ceremony fact sheet listing agreements and other documents signed at the JCCT, as well as an award that Secretary Bryson gave to the China Council for the Promotion of International Trade.
The JCCT was founded in 1983 as a dialogue between the U.S. and Chinese commerce departments, initially led by the heads of those departments. Starting in 2004, as noted in a Department of Commerce press release from that year, the JCCT assumed an elevated role as a vehicle for addressing trade and business issues that arose in the aftermath of China's accession to the World Trade Organization, chaired on the U.S. side by the commerce secretary and the trade representative, and on the Chinese side by a vice premier. In each of these higher level dialogues, the specific commitments are determined and outcomes negotiated in the several weeks leading up to the JCCT meeting itself. There are common themes in the several JCCTs, however. For example, each of the JCCT meetings since 2004 has addressed China's protection of intellectual property rights and market access for U.S. agricultural products in China. For details on previous JCCT commitments, see US-China Business Council, "China's JCCT Commitments, 2004–10 (as of June 17, 2011)."
2011 JCCT Meeting
According to a senior official from the Department of Commerce, as reported in China Trade Extra (29 November 11, subscription only) the United States and China do not issue an agreed upon statement of JCCT commitments. Rather, the meetings are covered in the Chinese press, including, for example, reports by Xinhua (21 November 11, in Chinese, reprinted on the Website of the Ministry of Commerce) and China Daily (22 November 11), and the U.S. Commerce Department issues a fact sheet. The latter this year included the following commitments by China:
- Technology and Innovation. China confirmed that foreign investors will not need to transfer technology or establish domestic Chinese brands in order to participate in China's new energy vehicle (NEV) industry, and would be eligible for subsidies on the same basis as Chinese companies. The NEV sector was listed as one of seven "strategic emerging industries" in China's 12th Five-Year Plan (Chapter 10), to be nurtured into "pillar industries." On the issue of creating Chinese brands, the JCCT commitment may have come too late. According to a report of November 22 in China Trade Extra, Chinese authorities previously had been withholding approval of U.S. automakers' projects in China unless they agreed to establish a domestic Chinese brand new energy vehicle. The report continues, "As a result, nearly all major foreign automakers except Ford have already agreed to produce a domestic [Chinese] NEV brand."
- IPR. Every JCCT since 2004 has included commitments by China to improve its IPR protection in light of rampant piracy in China. These commitments have ranged from the general, such as China's commitment at the 2004 JCCT to "significantly reduce" levels of infringement and make greater use of criminal penalties, to the specific, such as the 2005 commitment to post an IPR ombudsman at the Chinese Embassy in Washington DC. (For details, see the US-China Business Council's document, "China's JCCT Commitments, 2004–10.") This year, China reported establishing a high-level leadership mechanism, headed by Vice Premier Wang Qishan, to head IPR enforcement in China, and committed to move forward on ensuring that Chinese government bodies at all levels use licensed software. As noted on page 86 of the U.S. Trade Representative's 2011 Report to Congress On China's WTO Compliance, China is obligated under the TRIPS Agreement of the WTO "to protect and enforce the intellectual property rights held by U.S. and other foreign companies and individuals." However, "China has continued to demonstrate little success in actually enforcing its laws and regulations in the face of challenges created by widespread counterfeiting, piracy and other forms of infringement."
- Agriculture. Unlike previous JCCTs, China did not make any major commitments concerning agricultural market access. According to a November 21 press release by the Office of the U.S. Trade Representative, the parties agreed to "expand discussion" and to move toward making progress in certain area
- Strategic, Newly Emerging Industries. As noted above, the 12th Five-Year Plan includes a chapter on strategic emerging industries. According to the Commerce Department's trade fact sheet, China "assured the United States that it will provide a fair and level playing field for all companies, including U.S. companies," in these industries. The fact sheet notes that China will be investing $1.5 trillion in these industries over the next five years.
China also made commitments or agreements in areas including medical devices, pharmaceuticals, telecommunications, and travel and tourism.
Overall, from the U.S. standpoint, the outcomes of the 2011 JCCT were "modest," as described by a U.S. industry source quoted in Inside US-China Trade (23 November 11, subscription only), a view reflected by Commerce Secretary Bryson and U.S. Trade Representative Kirk, according to the report.
For information on previous JCCTs, see CECC analyses, "The U.S. and China Held the 20th Meeting of the JCCT in Hangzhou, China" and "United States and China Conclude Annual Bilateral Trade Meeting."