USTR has posted its first written submission in the DS543 case, which is China's complaint against the U.S. Section 301 measures. Among other things, there is a GATT Article XX(a) public morals argument. I'll let readers be the judge of all this. I wanted to focus on another point. The submission says:
12. The United States adopted the measures at issue in this dispute to combat China’s longstanding policy and practice of using government interventions, coercion, and subterfuge to steal or otherwise improperly acquire intellectual property, trade secrets, technology, and confidential business information from U.S. companies with the aim of advantaging Chinese companies and advancing China’s industrial policy goals. Although China’s conduct is not addressed by current WTO rules, it is unfair and contrary to basic moral standards.
...
52. First, findings by this Panel cannot enhance the security and predictability of the system because China’s unfair and trade-distorting technology transfer policies addressed in the U.S. Section 301 investigation are not subject to current WTO rules. China certainly has not argued otherwise. To do so, of course, would amount to an argument by China itself that China is breaching WTO rules.
So the U.S. says "China’s conduct is not addressed by current WTO rules" and "China’s unfair and trade-distorting technology transfer policies addressed in the U.S. Section 301 investigation are not subject to current WTO rules." However, to take one example, as has been pointed out by a number of people, Section 7(3) of China's accession protocol addresses issues of forced technology transfer, and the United States could have brought a claim under that provision. Thus, for at least some of the U.S. concerns about China, there is, in fact, a possible U.S. remedy under WTO rules.
There's a distinction here between not "addressed," "subject to," or "covered by" WTO rules, on the one hand, and not in violation of the rules, on the other. It seems to me that most of the Chinese actions raised by the U.S. are at least "covered by" the rules, in the sense that there are relevant rules that apply to the kinds of actions at issue. Of course, even if the actions are "covered," there is still the question of whether there is a violation, something that would have to be decided based on the facts of the case.
China's arguments, and the panel's questions on this issue and the U.S. responses, will be interesting on this point.
