“Passing laws that can impose new trade sanctions, freeze property, and even deny companies access to our patent office might help us feel as though we’re solving a serious problem. But we could be creating more problems.”
“Never mistake activity for achievement.”
— Coach John Wooden
We’ve all seen him when driving by the strip mall. Trying to focus on the traffic, our eyes are diverted by “Tube Man,” a 10-foot tall hollow, collapsible stick figure with a fan at the bottom, adjusted so that the body repeatedly folds and then jumps upright, with arms whipping around in a constant frenzy, trying to grab our attention. And that’s the point. Tube Man accomplishes nothing except to demand that we look at what he’s doing.
I was led to Tube Man by a search for “flailing,” a word that seemed an apt label for a spate of new legislation introduced by politicians climbing on top of each other to showcase their zealous antipathy to China. More on that in a minute; but first let’s consider what “flailing” means. It’s a pretty interesting word, and it makes a perfect metaphor.
The original use of “flail” was as a noun, derivative of the Latin flagellum, to describe a threshing tool made of a handle with a “free-swinging stick” loosely attached to the end. The idea was to just wave the thing around and it would end up knocking the grains off the stalk. It didn’t much matter exactly how you moved, so long as you did it with a lot of energy. Now we use machines for threshing, and most of us are not farmers; but we have kept the word, to describe “aimless or ineffectual efforts.”
And that, in my view, describes very well the recent rush of legislative attempts to punish China. That is not to say that China is our best friend. We are in serious competition, and it’s obvious that our leading position in some critical technologies has been targeted. That “giant sucking sound” you hear in the direction of China may be some cutting-edge secrets being displaced. We should be deeply concerned. We need a thoughtful, long-term strategy to respond.
Posturing Instead of Progress
Instead, what’s happening looks more like theater. Here’s the playbill. Early this year, Senator Chris Van Hollen (D-MD) re-introduced the “Protecting American Intellectual Property Act of 2021,” which had passed the Senate in December. It would require the President to impose trade sanctions on “foreign persons” engaging in “significant theft” of U.S. trade secrets, including freezing property and banning visas of individuals and putting companies on the “Entities List” (which makes it hard to do business in the United States). It did not include any path for appeal to the courts.
In April, Senator Lindsey Graham (R-SC) proposed “The Combating Chinese Purloining (CCP) of Trade Secrets Act.” (In his press release he included that parenthetical in the title, presumably to draw attention to the clever word choice that matched the acronym for the Chinese Communist Party.) This bill would have increased jail time for trade secret theft from five to 20 years, and companies found to have participated in or benefited from such theft would be barred from applying for any U.S. patents (any patents, not just related ones). It would also have denied visas to Chinese nationals wanting to pursue graduate studies in certain technical fields.
In May, Senator Chuck Grassley (R-IA) introduced the “Stop Theft of Intellectual Property Act of 2021,” which would bar admission to the United States (or deport them, if already here) of anyone who violates or evades export control laws or commits trade secret misappropriation.
Many aspects of these proposals came together earlier this month, when the Senate passed, with a large bipartisan majority, the “United States Innovation and Competition Act.” Weighing in at 2,376 pages, the omnibus measure contained other bills that were directed at increased government investment in cutting-edge technologies: the “Endless Frontier Act” and the “Strategic Competition Act.” But plenty of room was left for the “Meeting the China Challenge Act of 2021,” which followed the approach of the Van Hollen bill, only with a longer list of sanctions and a requirement that the President must choose at least five from the list (I’m not making that up.)
Separately from this massive omnibus bill, Senators John Cornyn (R-TX) and Chris Coons (D-DE) introduced legislation to create a new committee within the International Trade Commission with the power to perform a very quick (30 days) investigation and then block imports into the country that “contain, were produced using, benefit from, or use any trade secret acquired through improper means or misappropriation by a foreign agent or foreign instrumentality.” Lest we wonder what specific countries the authors had in mind, they inelegantly named the bill the “Stopping and Excluding Chinese Rip-offs and Exports of the United States Trade Secrets Act.”
Room on the Bandwagon
Even state politicians are jumping on the bandwagon. In the last few weeks, the Florida legislature passed by unanimous vote the “Combating Corporate Espionage in Florida Act,” which makes trafficking in trade secrets a serious felony, with enhancements if it is for the benefit of a foreign government. While lawyers express concern about how the risk of false accusations will discourage labor mobility and harm the economy, Florida’s governor announced his support for the law as a “major pushback against China” in response to its alleged coverup of the origins of the COVID-19 pandemic, as well as to its “infiltration” of universities and companies to steal trade secrets.
Back in 1998, I was part of a delegation of officials, scholars and industry representatives that visited China to help celebrate the opening of its Intellectual Property Training Center in Beijing. The facility was very impressive, and we were told that 600 people a month were receiving instruction in how to work with the country’s new IP systems. This was in the run-up to China’s bid to join the new World Trade Organization (WTO), and I can remember some in the U.S. group who were skeptical that all this activity was just for show, and that China didn’t really intend to make IP a priority.
As it turned out, not only did China join the WTO but it also built a world-class legal and administrative framework for IP rights. Nevertheless, a lot remains to be done, and special challenges persist, particularly in securing even-handed treatment of foreign companies that want to do business in China. Concerns about economic espionage and forced transfer of know-how are legitimate and need to be addressed. It seemed that we were on our way to dealing with a number of these issues through the negotiations that led to the Phase One Agreement early in 2020.
Sticking to Our Commitments
But at the multilateral level – that is, at the WTO, where sovereign countries are supposed to meet, iron out trade problems, and actually sue one another through a carefully negotiated dispute resolution process – the United States has more or less walked away. We have also withdrawn from the one regional trade agreement, the Trans Pacific Partnership (TPP), that we had proposed in order to offset China’s growing economic power in Asia. Simply put, we are not engaging with China.
Some commentators in and outside government suggest that the rise of China will necessarily lead to a “decoupling” of the world’s two largest economies, and that this is appropriate, given China’s anti-democratic approach to governance. But before we allow things to slip that far, we should consider very carefully how the world has benefited from increased trade in the years before tariffs were imposed, and the value of working within institutions like the WTO and agreements like the TPP.
Passing laws that can impose new trade sanctions, freeze property, and even deny companies access to our patent office might help us feel as though we’re solving a serious problem. But we could be creating more problems, as other countries like China watch what we’re up to and pass similar laws targeting U.S. businesses.
Addressing serious issues of IP theft should not lead us into our own corners where we vent and issue pronouncements, making political points with strong rhetoric. To actually achieve progress, we need to engage directly with China, ensuring that it keeps its commitments to respect IP rights and provide fair enforcement. Nothing less than global prosperity is at stake.
Image Source: Deposit Photos
Join the Discussion
21 comments so far.
AnonJuly 2, 2021 08:50 am
“The more trade between nations, the less likely they will go to war with each other.”
Except for the fact that this statement is shown to be false in the failure of inviting China into WTO.
A mind willing to understand includes a mind willing to actually engage on the points already presented.
Max DreiJuly 2, 2021 05:19 am
The argy-bargy between Reps and Dems, all the posturing, the gestures, is delighting the autocrats of this world. They can hardly believe how successful have been their efforts to de-stabilize the democracies of the world.
A President who behaves deferentially to the autocrats (and is jealous of the opportunities such heads of state have for eliminating any irksome challenger, going all the way back to Henry II’s “Who will rid me of this turbulent priest”) gets the autocrats purring like the cat who got the cream.
As we all know, one autocrat has already seized the opportunity to take back possession of Hong Kong even while another re-possesses The Crimea.
The next object of desire is of course Taiwan. Your President was in Europe last month, at a G7 meeting to discuss the issue with the representatives of other democracies. Pooley is right: de-coupling is not the answer. More coupling (specially amongst the few remaining democracies of the world) is what’s needed, to forge a united front against appalling abuses of precious human rights. Pressuring Europe to buy more guns and drones made in the USA is fair enough, but will not by itself save our precious Rule of Law from extinction at the hands of the vandals.
The more trade between nations, the less likely they will go to war with each other.
AnonJuly 1, 2021 07:27 pm
Not at all. I routinely add to legal conversations (and thus fall into the noted “Those that do add tend to be granted more leeway for colorful expression.”
You confuse the fact that I can deal with BOTH substance and snark.
You also miss the fact that my snark is on point.
As to your “political tool of the Reactionary Right – you are absolutely incorrect. One SHOULD BE interested in the actual actions of Foreign Sovereigns and NOT take such a polly anna view of the world — it really is a mean and nasty place.
Night WriterJuly 1, 2021 05:58 pm
@21 >Anon-noyed>Antipathy towards China is a political tool of the Reactionary Right who are more interested in sound and fury for domestic consumption as opposed to realpolitik solutions.
This has become the far left’s standard answer: if you don’t agree with us, then you are a “reactionary right” person. Try responding to substance. Your little neo-Marxists ways have grown thread worn.
Anon-noyedJuly 1, 2021 02:13 pm
Antipathy towards China is a political tool of the Reactionary Right who are more interested in sound and fury for domestic consumption as opposed to realpolitik solutions.
AnonJuly 1, 2021 02:11 pm
“In these times of insidious and corrosive social media,”
You do know, MaxDrei, in what direction MOST of that insidiousness and corrosiveness plays out, eh?
Hint: it is the direction of the fawning media and the CURRENT President.
Max DreiJuly 1, 2021 11:09 am
Night, you have asked me three times now, what did Trump do that was “bad”. My answer: super-spread the lie that he won the election.
Representative democracy is a precious but fragile form of government. In these times of insidious and corrosive social media, those who destroy any faith the voters have in the value of representative democracy as a form of government are bad people, and best friends with the totalitarian leaders around the world.
AnonJuly 1, 2021 08:31 am
MaxDrei must be forming his opinion from the fawning Main Stream Media, and simply cannot see just how much MORE authoritarian and just as (if not more, in a more insidious manner) divisive Biden and whoever is pulling his strings have been.
Night WriterJuly 1, 2021 06:46 am
Look, read about what China is doing to Australia and you will get what is going on.
I think–and I know I will take heat for this–that those people that are pushing China are neo-Marxists and like the idea of giving everyone a citizenship score that determines their rights and likes the idea of a totalitarian government. I think the reality is that we are dealing with neo-Marxists in the USA in large numbers with many elected to Congress and Biden being very sympathetic to their causes if he even understands what day it is, which I doubt.
We need to start calling people out. “Equity” is a neo-Marxist construct the way Biden is pushing it. And I am not originating these ideas there are hundreds of academics that are saying this with Steven Pinker being one of them.
Face it—Clinton’s plan of letting China into the WTO to turn them into a democracy didn’t work. China has just become stronger and more totalitarian.
Night WriterJuly 1, 2021 06:29 am
My last paragraph is clear. That it is Europe that is acting like the children doing such things as not paying their fair share for defence.
I think you don’t understand Trump. Again, tell me something he did that was so bad. Trump was the one that push to help the Ukraine as much as possible and to fend off Russia. Russia is clearly a threat to all the Eastern European countries for invasion.
That is why I am saying that you are acting like children. You think Trump didn’t want Europe to be a full of strong and free democracies but he did everything possible to promote that but wanted Europe to carry its fair share of the burden. As in not trading with Iran, paying their fair share for defense, and so forth.
I think you know who Europe and the USA have to partner with and that is any democracy that treats their people well.
Again, look at the Ukraine to see that the bear is back and is trying to eat Europe–again. Look at Australia to see that China is trying to subjugate any country they can. Read about China’s citizenship score and what they did in Hong Kong.
Stop acting like a child.
MaxDreiJuly 1, 2021 04:25 am
Night, we agree, that if Europe doesn’t get its act together soon, it is going to end up as somebody’s vassal. My point is that your immediate past President seemed not to care, if every country outside North America were to become China’s vassal. Your current President, with his “America is back” message, gives the impression that the USA seeks to co-operate with the democracies of the world, collectively to resist totalitarian governments wherever they may be.
I don’t understand your last paragraph. Is there any need for the USA to partner with anybody else, or is it only Europe that needs to partner? And who shall your “they” of Europe partner with? Each other? Or did you have in mind the USA?
Night WriterJune 30, 2021 05:32 pm
Do you can’t name one act besides acting like a giant baby that Trump did that was bad.
You are out of mind regarding China. The G7 will beg—I mean BEG–for the USA’s help within 10 years for protection from China. Just do some homework. Read what the Australians have to say about China and their practices of subjugating countries.
Plus you didn’t bother responding to the biggest problem with China and that it is becoming more and more totalitarian and using information technology to do so.
The soft power that Trump admittedly did lose for the USA was illusionary. It was only there as long as the USA gave Europe money in defense spending and great trade deals.
Europe will grow-up and understand that they need to be partners in fighting totalitarian governments or Europe will become a vassal of China.
Max DreiJune 30, 2021 02:11 pm
I mention the G7 because here in Europe, half way between the USA and China, it looks as if the struggle between these two, for global success, might depend on how many mates/friends you have, how many “Likes” you have, around the world, outside your home jurisdiction. One likes to think that the USA has gazillions of them, while China has very few. But 4 years of your immediate past-President and the number of USA-admirers around the world has shrunk, even as the number of China-admirers around the world has grown (because of China’s generosity of project-funding all around the world).
As to giving up nucular (as one says) weapons, or not, that’s an old old old story, from long before Pres. Obama. North Korea vs Iraq.
As to offshoring US jobs to China, I blame the neo-liberal economists. Economics: the dismal science. Absolutely.
The bad thing that Trump did was to trash the soft power of the USA. Tell me, you economists, how much is soft power worth. You know the price of everything. But as to the value of things, you know nothing. Ask Michael Sandel.
Night WriterJune 30, 2021 07:28 am
Read what I wrote above. And, also, can you tell me one thing that Trump actually did that was so bad? I’ve asked this question to a 100 people and not one can give me a single example of anything Trump did other than act like a giant baby.
Plus, Obama had no understanding of how the world works and was happy to give away the USA to China. Look at what Obama did in Iraq. Every single person that understood the Middle East said if Obama pulls out of Iraq there will be chaos and an endless war, which is exactly what happened.
Etc. What else? Well, Obama did the worse thing that has been done in 50 years. He allowed Russia to invade the Ukraine after the Ukraine gave up their nuclear weapons. No country will ever give up their nuclear weapons again.
AnonJune 29, 2021 07:22 pm
My response to you appears to have been caught up in the expungement of baseless, mindless and contentless post by RTFMPEP.
Directly to your question though, the drive is that “equity” and “equality” are vastly different things, and the manner of focus on “equity” relies on divisive identity politics from the school of Neo-Liberalism.
I suggest that you learn (far) more before forming or venturing views on the US political parties.
AnonJune 29, 2021 04:10 pm
LOL – the sycophant appears (and makes the mistake that there is such a thing as Biden Derangement Syndrome).
Night WriterJune 29, 2021 02:04 pm
Look, the history is important. Clinton basically signed away about 40 million jobs and the future of the country on the hope that letting China into the WTO would end its communism. Instead, China has morphed its communism and is becoming what may become the 1984 of totalitarian states with monitoring everything everybody does 24×7.
That is what is important. Our future liberty. And China is a highly aggressive state that has used entrance into the WTO to work its way into every country that has natural resources of value.
That is reality. We are being sold out by corruption. A few companies make some money along with lots of politicians and the other 300 million of us pay the tab.
Max DreiJune 29, 2021 11:07 am
The comparison I’m making, between the current and immediate post President, is based on observation of their respective conduct at international meetings, in particular the G7. On Rules-based international order, I see your “buffoon” point but not your “divisiveness” point.
What are you driving at? Will you say?
AnonJune 29, 2021 07:27 am
You must be viewing the current president through some pretty warped spectacles.
This current president has invoked more non-US hostilities (and deaths) than the former – by far.
Trump was a buffoon. He was a TV character. He would rather rattle the press than cause actual harm, and if you took the “character” out of the equation (for example, look at the Vice Presidential debate in which the vanilla character was put on the face of the actual positions in play), the progress was far more impressive than the actual divisiveness of the current President.
The only “Rules-based” motifs in play now are those that aggrandize power for the “D” party.
Max DreiJune 29, 2021 04:37 am
Antipathy will always exist, anon. Surely, you agree. That being the case, we humans have to manage it as best we can, right?
My preference is for Rules-based international order, to nurture democracies all over the world. President Biden (unlkie his immediate predecessor) also seems to believe in Rules-based international relations, and international co-operation wherever possible. Good for him.
Can the voters of the USA support the thinking of their current President? With representatives in The Congress as they are currently, I have my doubts.
AnonJune 28, 2021 10:22 pm
Not a fan of this style of rhetoric with the imposition of an assumed position (and an emotional one at that) is in fact true — no questions asked.
There are very real reasons why antipathy towards China exists.