WASHINGTON-The United States and China last week averted a high-profile trade war over intellectual property rights that threatened to cut into wireless telecommunications commerce between the two countries.
The U.S.-Sino accord was reached just hours after the Clinton administration-imposed June 17 deadline passed for slapping punitive tariffs on $2 billion worth of Chinese imports, including cellular telephones.
The White House claimed China failed to enforce a February 1995 intellectual property rights pact requiring it to crack down on illegally operating pirate compact disk factories that have been producing 30-50 million units a year.
In 1995, the United States imported nearly $100 million worth of wireless phones from China.
But the U.S. wireless telecom industry stood to be the real loser if China had retaliated as promised by imposing high tariffs on U.S.-made pagers, mobile telephones and other radio communications equipment.
Motorola Inc., the world’s biggest mobile communications manufacturer and an aggressive exporter of wireless products, would have been hit hard at both ends. The Schaumburg, Ill., firm has a major presence in China where it employs 7,000 workers who build pagers, cellular phones, radio communications systems and semiconductor components.
“These discussions and my other consultations this week have demonstrated what the United states means by engagement-working together to resolve problems by seeking common ground,” said U.S. Trade Representative Charlene Barshefsky, following meetings with Chinese President Jiang Zemin and Vice Premier Li Lanqing in Beijing .
USTR said talks with China leading up to last week’s settlement confirmed China had closed 15 pirate CD factories, including 12 in the Guangdong province, and had taken other measures to crack down on underground marketing of CDs.
In addition, joint ventures between the United States and China and licensing agreements on CDs and other consumer products involving intellectual property rights reportedly may come about now that the trade dispute has been defused.
Barshefsky said she “is hopeful that resolution of the IPR (intellectual property rights) issue can create momentum in support of a broader goal of the administration-maintaining China’s most favored nation trading status.”
The administration can point to the episode as proof of its ability to deal diligently with China without burning bridges on trade and other key issues-like human rights and nuclear arms-that could figure big in this November’s presidential election.
Bob Dole, on a campaign swing in the high-tech Silicon Valley of California where he trails Clinton in the polls, last week predicted the new China trade accord will not hold up.
“I happen to believe that this agreement is the latest event in the three-and-one-half year saga of weakness and uncertainty in the Clinton administration’s handling of economic relations with China,” said Dole.
