Coronavirus: China yet to meet key phase one trade deal target due to Covid-19 lockdown

China was due to release intellectual property action plan 30 working days after phase one trade deal came into force on February 15

US officials said to be ‘frustrated’, but content with progress on agricultural purchases and market access

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The coronavirus pandemic has delayed the implementation of intellectual property guarantees made by China as part of the phase one trade deal. Photo: EPA-EFE

Published: 8:30pm, 8 Apr 2020Updated: 8:30pm, 8 Apr 2020

China has yet to deliver on a key component of its phase one trade deal with the United States, with the coronavirus pandemic proving an obstacle to implementation.

The intellectual property protection action plan – viewed in Washington as a cornerstone of the deal – was supposed to be delivered 30 working days after the agreement came into force on February 15. Thirty working days theoretically expired at the beginning of April, and no plan has been released.

However, with much of the Chinese economy on lockdown after a protracted Lunar New Year holiday in late January and February, the definition of “working days” has become a bone of contention.

Rather than ask for an extension, China is understood to have argued that the action plan is not in fact late, because the number of actual working days in China was greatly reduced due to the shutdowns. This has caused “frustration” at the Office of the US Trade Representative (USTR), said two people familiar with the affair.

The US side is said to be upset because the plan is expected to be based on a previously negotiated text, which was dramatically set aside when talks collapsed in May last year, meaning it should be relatively easy to deliver compared to other parts of the deal.

“Remember there is not that much trust between the two sides. If they do not carry out the execution, everything is laden with more meaning,” said Kenneth Jarrett, senior adviser at Albright Stonebridge Group and former US Consul General in Shanghai. “We must be mindful that intellectual property protection was at the core of the initial Section 301 tariffs – this is the first real test.”

A source briefed on China’s delivery of its phase one commitments, meanwhile, said that in terms of intellectual protection, “China has done the best it can given its capacity. There will not be any surprise in the action plan, it is very likely to repeat what it has promised before”.