US China Trade War and the on going pandemic

Introduction:

The trade war between US and China has been a hot topic in the international trade law. As both the countries are increasing tariffs on each other and thus resulting to serious tension in the global economy. The US government till now imposed tariffs costing ‘US$ 550 billion worth of Chinese products’ whereas on the other hand China ‘has set tariffs on US$ 185 billion worth of US goods’ . The US companies are trying hard to compete in the Chinese market as the rules farmed by the Chinese government are a major challenge for the American companies, on the contrary; the Chinese companies does not face any problem in their US operations as the laws in the US are not strict as that from China. Both the countries are having been planning to come into a Bilateral Investment Treaty (BIT) to avoid all the hurdles in the trade and maintain a healthy relationship with each other. ‘A BIT is an agreement between two countries that sets up “rules of the road” for foreign investment in each others countries’ . The BIT will help in removing the tariff problem faced by both the countries and thus result in better trade relations.
As discussed in the introduction the BIT is important solution to the trade war between US and China. There will be several changes after the commencement of BIT such as the US companies can easily enter into the foreign market as the government has to allow the US companies to process their China operation. The US investors will be provided as sense of security including ‘national treatment, fair and equitable treatment, protection from expropriation and performance requirements for investments, and access to neutral dispute settlement’ . ‘The US trade lobby has also been much bruised during the trade war giving US corporations better protection and access to the China market via a US-China BIT’ .
Chinese investors can securely invest in the American markets. The tariffs imposed by the US government on the Chinese investors will be removed when the BIT will take place. ‘China’s strategic interests in a BIT, however, appear to have received little attention in the U.S. media and academia compared to the glowing reports concerning the potential economic benefits to the United States from a U.S.-China BIT’ . The commencement of BIT will even help in boosting the Foreign Direct investment (FDI) as well as ‘it would increase Chinese investment in United States’ . ‘On a market level, China could enjoy new business opportunities and see an increase in its FDI outflows and inflows similar to those of the United States’ Chinese state owned enterprises will also secure easy access to US market.
The Phase 1 deal results out to be a first step towards the BIT. The Phase 1 shows some major significance of the impact of the treaty. As the tariffs war has been in limelight, this deal helped to China to pay less tariffs imposed by the United States on the other the intellectual property rights has also been highlighted as the China has added some provisions for the ‘legal protections for patents, trademarks, copyrights, including improved criminal and civil procedures to combat online infringement, pirated and counterfeit goods’ . ‘The agreement creates a framework for top officials from both countries to meet regularly to try to address alleged violations.’ This is major step in the field of dispute resolution between the two countries.
The Phase Two of the BIT is soon to take place where the discussion would most likely land on ‘the U.S. claim that Chinese industrial policy, carried out through “subsidies” and state-owned enterprises, affords Chinese entities an unfair competitive advantage, especially in higher technology sectors.’ Due to the recent pandemic of corona virus the Phase 2 agreement has been delayed and thus resulting is late deposition of the trade talks between both the nations.
The BIT is an agreement between the two countries giving access to the foreign direct investment and even ensures both the parties to provide a better dispute resolution in case of any dispute. The trade war between US and China has been in limelight for several years as the both are world’s most powerful nations. Finally both the countries decided to negotiate on the BIT which will be a major step towards the end of trade war. The increase in tariffs, breach of Intellectual Property Rights, strict competition in the markets for the foreign investors were some of the problems faced by the countries before both the nations agreed for the BIT. As this research proposal contains the study of US China trade war and the impact of BIT on it. Apart from that another important topic which is likely to be covered in this research is study of tariffs model imposed by both the countries and can there be any monitoring done to control the excessive tariffs imposed by the countries on each other. The impact on other countries around the globe after the negotiation of the BIT between US and China will be observed and how implement the mechanism to this BIT to avoid any future trade war. This includes the importance of BIT in the trade law and ensuring better relations between the nations. The US China BIT is an on going topic hence the research will involve following up the deals related to BIT and what are the provisions being taken in the agreement for dispute resolution shall also be acknowledged. Due to this pandemic of COVID-19 the trade negotiations has suffered major loss. The Chinese investors are facing problems in functioning their US trade operations thus resulting damage to the trade relations. On the other hand US firms has filed lawsuits against China due to the COVID-19 which will result in huge loss to the Chinese government. As both the countries are accusing each other for the outbreak of virus the trade and the investors are at stake and being grinded into this.

[1] Daniel C.K. Chow, China’s Indigenous Innovation Policies and the WorldTrade Organization, 34 Nw. J. INT’L L. & Bus. 81, 82 (2013)
[1] Schwartz M, ‘A BIT of Help for the U.S. and China’ Wall Street Journal (2 April 2014)
[1] Daniel CK Chow, Why China wants a Bilateral Investment Treaty [Boston University International Law Journal; Vol. 33] (2015)
[1] ‘What’s in the U.S.-China Phase 1 Trade Deal’ Reuters (15 January 2020)
[1] ‘What’s in the US-China “Phase One” Trade Deal? | Financial Times’
[1] School SL, ‘Stanford’s Alan Sykes on the New U.S.-China Trade Agreement’ (Stanford Law School)

 

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