China’s not meeting its commitments in the Phase One trade agreement, U.S. Trade Rep. Ambassador Katherine Tai said during a major policy speech yesterday outlining the administration’s China strategy. Here’s what she said and why it matters to biotech.
“The key to our global competitiveness and creating shared prosperity begins at home,” she said. “We have to make smart domestic investments to increase our competitiveness,” in areas including R&D, “clean energy technology,” manufacturing, and incentivizing companies to “buy American up and down the supply chain.”
“Since the beginning of the administration, we’ve made clear our strategy of competing with China from a position of strength,”a senior administration official said prior to the speech. “That’s why we’ve been investing in our domestic renewal, getting the pandemic under control, investing in our supply chain resiliency and our technological edge so we can continue to lead the world in industries of the future.”
Phase One covers critical challenges for the biotech sector, including “intellectual property and technology transfer, purchases of American products, and improved market access for the agriculture and financial services sector. It has stabilized the market, especially for U.S. agricultural exports,” continued Ambassador Tai.
But there have been “shortfalls” in implementation...
For agriculture: “China’s regulatory authorities continue to deploy measures that limit or threaten the market access for our producers and their bottom line.” This is an issue highlighted by members of Congress in hearings and letters.
After the speech, Secretary of Agriculture Tom Vilsack said it’s crucial that Tai press Chinato meet its obligations. “There are seven still very large items that have yet to be resolved and yet to be completed by the Chinese, not the least of which is biotechnology trade approvals.”
Implementation is critical, BIO’s VP of International Affairs Matt O’Mara said earlier this year. There have been “few details revealed regarding promised systemic reform of agricultural biotechnology,” which is why enforcement remains key.
While China has made some progress on intellectual property (IP)-related commitments, such as its newly amended Patent Law, additional work is urgently needed for structural commitments, including an effective mechanism for early resolution of patent disputes and effective patent term extension.
Furthermore, Phase One doesn't cover other important structural issues—like regulatory data protection (RDP) for new drugs and biologic products, and China’s human genetic resource (HGR) regulation.
So, what now? “The administration doesn’t expect China to meaningfully change its practices, and isn’t seeking to open negotiations on a Phase Two agreement,” says Axios.
BIO looks forward to continuing to work with USTR—to hold China accountable and press for implementation of Phase One outcomes, as well as work on issues like RDP/HGR.
Read: What biotech can expect from the administration’s trade policy agenda
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