Phase One US-China Trade Deal: What Does It Mean for Intellectual Property?

On 15 January 2020, a long-awaited trade deal between the United States (US) and China was concluded. The released draft, titled ‘Economic and Trade Agreement’, is the outcome of the Phase One trade deal between the two largest global economies. In the past few years, the US and China have had a strained relationship. In 2018, the US imposed sweeping tariffs on Chinese imports of steel and aluminum, followed by an additional tariff on approximately $300 billion of Chinese imports in August 2019. In response, China unveiled retaliatory tariffs on US goods. However, in a turn of events in December last year, the US and China both rolled back their tariff plans. Subsequently, on 13 December 2019, a broad outline of the Phase One trade deal was released. The 86-page long ‘Fact Sheet’ mainly highlights three things. First, the trade deal requires ‘structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property (IP), technology transfer, agriculture, financial services, currency, and foreign exchange’. Second, the deal should have a strong dispute resolution system. Third, in return, the US ‘agreed to modify its Section 301 tariffs actions in a significant way’. Notwithstanding ongoing proxy trade wars, the Phase One trade deal was released, consisting of eight chapters. This opinion will only address the ‘Intellectual Property’ Chapter (hereinafter IP Chapter).