U.S. Senator Debbie Stabenow today called for action to stop China from forcing American companies to hand over their advanced technologies as a condition of doing business there. Noting that forced technology transfer is a violation of international trade laws, Stabenow sent a letter to the United States Trade Representative (USTR) Ron Kirk, calling on America's top trade official to take action to stop China's illegal practices.
"If U.S. companies refuse to hand over engineering secrets, China threatens to deny access to the Chinese market. These types of shakedowns are another example of China's disregard for fair trade and intellectual property, and its willingness to violate trade rules for its own advantage," Stabenow said in her letter. "We must demand that China does not engage in action which amounts to the theft of American-made technologies. If China refuses, I urge to you to take appropriate WTO action to stop this outrage."
The full text of Senator Stabenow's letter to USTR follows:
September 14, 2011
The Honorable Ron Kirk
United States Trade Representative
Executive Office of the President
600 17th Street, NW
Washington, DC 20508
Dear Ambassador Kirk:
I am writing to express my strong concern about a recently reported Chinese trade practice that would be a clear violation of World Trade Organization (WTO) rules. The New York Times recently reported that China is attempting to pressure American automakers, including General Motors and Ford, to transfer core technologies of their electric and plug-in hybrid vehicles to Chinese companies, in order for those vehicles to qualify for China's clean energy vehicle incentive program.
Forced technology transfers are already allowing Chinese companies to use American technologies to compete against American companies in industries such as water purification, high-speed trains, and wind turbines. In these industries, if U.S. companies refuse to hand over engineering secrets, China threatens to deny access to the Chinese market. These types of shakedowns are another example of China's disregard for fair trade and intellectual property, and its willingness to violate trade rules for its own advantage.
China's strong-armed tactics strike at the very heart of international trade rules. The U.S., China, and the other more than 150 WTO members have agreed to play by a set of rules. One of the most fundamental principles underlying the WTO is "national treatment," which requires equal treatment for both domestic and foreign products. China's actions, as reported by the Times, clearly fail this test and would go against its 2001 WTO accession commitment to not force the transfer of technology or other proprietary knowledge.
China's actions are part of a disturbing trend where China demands American advanced-technology product secrets in order for those products to be sold in the world's second largest market. In contrast, the United States--the world's largest market--follows the rules and allows Chinese products to be sold freely. Many Americans rightly believe that China is playing us for fools: China gets to access our large market, while our products face numerous restrictions and outright intellectual property theft.
I urge you to investigate these actions. We must ensure China does not force our companies to transfer their technologies to Chinese firms. We must demand that China does not engage in action which amounts to the theft of American-made technologies. If China refuses, I urge to you to take appropriate WTO action to stop this outrage.
Senator Debbie Stabenow