Implications for Trading Partners

The implications outlined above for the WTO also link closely to the implications for China’s powerful trading partners such as the US and the EU. Firstly, it is clear from the 2007 WTO dispute initiated by the US against China regarding TRIPS enforcement that it can be difficult to collate enough evidence to bring a dispute to the WTO dispute settlement body. As emphasised by the Panel Report, anecdotal weaknesses in the enforcement system are insufficient to initiate an action; the complainant must have clear evidence of systemic failures. Therefore, this reinforces the idea that compliance is difficult to assess objectively and that a more comprehensive model of TRIPS compliance is necessary to understand the complex processes of compliance in different countries.

The second and arguably more important implication for key trading partners of China is that the policy of denouncing the Chinese government in an effort to force stronger IP enforcement is unlikely to succeed. External pressure from the United States Trade Representative (USTR) and their Section 301 mechanism of identifying countries annually seen as IP offenders is unlikely to produce sustained improvements in the enforcement system without corresponding internal changes. This is because external pressure may optimistically increase central government intention to comply, but without any essential improvements in the capacity to comply. Indeed, pursuing external pressure may not even increase intention to comply and instead may only result in resentment.

A more productive long-term strategy to improve TRIPS compliance and IP enforcement in China would be to continue to work with Chinese rights- holders, legal personnel and judges to improve their capacity to enforce IP effectively. Such initiatives have increased in both number and scope since China’s WTO accession, but it is important to stress that this type of cooperative activity should remain the focus for trading partners seeking to influence China’s IP system in the future. Ultimately, without domestic rights-holders to pressure for IP protection, the system cannot effectively operate to protect IP in the long term. Turning to the wider implications for global IP protection, as shown in Chap. 3, the broad membership of the WTO was found to act as a positive influence on the likelihood of TRIPS compliance; it could thus be argued that key trading partners should encourage remaining non-members to accede to the WTO in order to increase this effect.