SIIA Welcomes US-China JCCT Outcomes

The deliverables announced today (“U.S.-China Joint Commission on Commerce and Trade”, 10/29/2009) from the US-China Joint Commission on Commerce and Trade (JCCT) address several issues of importance to the US software and digital content industries.

The pressure was on, given this was the first JCCT taking place under President Obama and before his first trip in November. Today’s outcomes, following on the heels of this summer’s Strategic & Economic Dialogue (S&ED), are welcome advancements in the US-China relationship.

Among the key outcomes for our industries:

Information Security.   The JCCT outcomes continue to recognize the importance of this issue for our bi-lateral trade and investment relationship. Even with the major scaling back of the 13 information security regulations last April (“Ambassador Kirk makes statement on China’s action to modify Information Security Testing rules”, April 29, 2009), the scope of the regulations – and other related issues – continue to present challenges and are out of the global norm.

The dialogue on trade in info sec products called for in the outcomes is critical to working with China to engage in global approaches on this critical issue. And the confirmation that the information security regulations do not cover State Owned Enterprises (SOEs) – and apply only to products procured by Chinese government agencies — is an important step.

While much work remains to be done on these regulations, as well as related areas of Multi-Level Protection Schemes and implementation of China’s encryption regulations, these outcomes continue to move the ball forward in an important way.

Government Procurement Agreement (GPA).   The US Government has demonstrated strong leadership engaging China to join the GPA.

The JCCT outcome that establishes a new offer from China “as early as possible” next year is particularly welcomed, and indicates that 2010 will be a busy year to make sure that China provides a meaningful and comprehensive undertaking of its commitment to joining to the WTO.

SIIA commends the outcome that products produced in China by foreign invested enterprises (FIEs) will be treated as domestic products, which will be addressed in rules to be issued in this regard. And SIIA looks forward to working with the US and Chinese governments once they “establish a multi-agency working group to regularly conduct discussions on issues involving government procurement and purchases by state-affiliated enterprises and organizations and private parties that make purchases in accordance with national strategic objectives.”

Intellectual Property (IP) Enforcement and Protection. Continued progress by China to become a full partner in the global economic community depends on meaningful enforcement of existing IP laws, and ensuring that IP laws on the books in China reflect global standards.

The JCCT outcomes recognize this, and SIIA is pleased to see focus on enforcement as a priority, especially with regard to Internet piracy and the further promotion of legalized software, and the recognition that infringement by state-run libraries is area to be addressed.