The U.S. and China Held the 20th Meeting of the JCCT in Hangzhou, China

December 2, 2009

The 20th meeting of the Joint Commission on Commerce and Trade was held in Hangzhou, China on October 28 to 29, 2009. The JCCT, which was established in 1983, is a high-level forum for the United States and China to address concrete trade issues. The meeting achieved certain outcomes, especially in the areas of agricultural trade, market access, and intellectual property rights.

The Joint Commission on Commerce and Trade (JCCT), a high-level trade forum between the United States and China, met in Hangzhou, China on October 28 to 29. The JCCT is focused on concrete trade issues with a set of "deliverables," unlike the other annual dialogue on economic issues, the Strategic and Economic Dialogue (S&ED), which is focused on the broader, economic U.S - China relationship. In its fact sheet of October 29, the U.S. Trade Representative (USTR) reported results of discussions at this year's JCCT, including outcomes on agricultural trade, market access for wind turbines, Chinese government procurement, intellectual property rights (IPR), medical devices, pharmaceuticals, and travel and tourism.

The JCCT was founded in 1983 as a dialogue between the U.S. and Chinese commerce departments. Starting in 2004, the JCCT assumed an elevated role as a vehicle for addressing trade and business issues that arose after China's accession to the WTO, and was co-chaired on the U.S. side by the U.S. Trade Representative and Secretary of Commerce, and the Chinese delegation led by the Vice Premier, as described by Hank Levine in his blog, "Behind the Curtain." Mr. Levine was Deputy Assistant Secretary of Commerce for Asia Pacific at that time. Since 2004, the annual JCCT meetings, like this year's meeting, have invariably included intellectual property rights, agricultural trade, and market access, as well as other relevant trade issues. (For details on commitments at earlier JCCTs, see U.S.-China Business Council, "China's JCCT Commitments, 2004-09.") The specific commitments are determined and outcomes negotiated in the several weeks leading up to the JCCT meeting itself.

According to an October 29 report by China Trade Extra (subscription required), "In advance of the meeting, informed sources said that Chinese officials were refusing to engage to show their dissatisfaction with President Obama's imposition of safeguard tariffs on Chinese tire imports…" At the same time, another informed source reportedly indicated that the decision on tires did not have a significant impact on the talks. October 29 press releases by the U.S.-China Business Council and the U.S. Chamber of Commerce, were not inconsistent with this view. USTR reported concrete outcomes in its October 29 fact sheet, including most notably the following:

  • Agriculture. China said it would allow imports of U.S. pork and live swine. These had been banned starting in May 2009 because of swine flu. It is not clear how great an impact this commitment will have on U.S. exports to China which, according to industry, as reported in the October 30 Wall Street Journal, had been growing before the ban. Since the ban was imposed the Chinese have ramped up the domestic industry.
  • Clean tech. Access to China's market for foreign wind turbines had been largely restricted for foreign manufacturers. China agreed to allow greater access by removing a 2007 local content requirement for wind turbines, according to an October 30 China Daily report. This commitment was somewhat overshadowed by news of a large wind energy project in Texas that, according to a report in the November 1, 2009 New York Times, will use wind turbines manufactured in China, providing roughly 2000 jobs for Chinese workers.
  • Government procurement. China made some commitments concerning government procurement, which has been largely closed to foreign companies as well as companies in China that have foreign investors. China agreed to treat products of these foreign-invested companies the same as products of domestically-owned companies. Further, China agreed to submit a revised offer to join the WTO Government Procurement Agreement (GPA) by early in 2010. The 2005, 2006, 2007 and 2008 JCCTs had also included commitments concerning China's joining the GPA.
  • 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. This year, according to the USTR fact sheet, the Chinese gave some general assurances concerning Internet piracy and encouraging the protection of certain types of publications at public libraries, and agreed to work with the U.S. to address certain IPR issues.

According to the fact sheet, China also made commitments, or agreements to cooperate, concerning medical devices, pharmaceuticals, and travel and tourism. A November 6 article by the Hong Kong Trade Development Council characterized the meeting's achievements as "modest progress." Nonetheless, the JCCT continues to be an important forum for addressing the rules, regulations and policies that hinder free trade or serve as barriers to China fully meeting its WTO commitments.