U.S.: Don’t Give China Control of Intellectual Property Group

Peter Navarro

February 23, 2020

The writer is assistant to the US president for trade and manufacturing policy

In early March, the World Intellectual Property Organization will elect a new director-general for a six-year term. A leading candidate is from China, which has repeatedly drawn criticism for allowing counterfeiting and illegal expropriation of IP.

Established in 1967, WIPO is one of 15 UN “specialized agencies”. Its particular job is to promote IP protection, help businesses and individuals obtain IP rights, and increase accessibility to IP information. WIPO regulates systems managing 43m patent documents. This treasure trove includes unpublished patent applications and commercially sensitive information from more than 200 jurisdictions and patent information collections.

When patents and trade secrets are stolen, counterfeit goods are produced and traded openly. Trademarks are infringed. Competition is stymied. Revenues diminish. Governments, businesses and consumers all lose.

International IP rules underpin the innovation economy. The US believes that giving control of WIPO to a representative of China would be a terrible mistake. China is responsible for 85 per cent of counterfeits seized by US border officials; and Chinese IP theft costs the American economy between $225bn and $600bn annually. IP infringements cost European firms billions of euros each year. In the developing world, Chinese counterfeits have damaged the handmade traditional textile industries in Nigeria, Ghana, Ivory Coast and Guinea.

If China were to match western standards for IP protection and enforcement, it might be in a position to provide a leader for WIPO. That day is certainly not today.

China’s WIPO gambit is part of a broader strategy to gain control over the 15 specialized agencies of the UN. China already leads four of the UN specialized agencies while no other country leads more than one, and Chinese nationals hold the number two post at seven of them, including WIPO.

The top spots of five UN specialized agencies will be up for grabs in 2021, including the International Labor Organization, International Fund for Agricultural Development, World Tourism Organization, UNESCO and the UN Industrial Development Organization.

Three more face elections in 2022, including the World Health Organization and the International Civil Aviation Organization.

These UN agencies play a significant role in our modern health, communications and transportation systems, as the WHO’s crucial role in fighting the coronavirus outbreak reminds us.

Although China has not yet put forward candidates for any of these jobs, if past is prologue Beijing will be competing for a number of them with either Chinese candidates or proxies from countries deeply in debt to China.

When it comes to these selection processes, China is likely to seek and receive support from countries where it has become a major donor or source of aid. Research by AidData found African countries that received larger amounts of aid voted more frequently with China at the UN. At least three Chinese nationals, Ng Lap Seng, Shiwei Yan and Heidi Hong Piao, have been convicted of bribing a UN official.

Beijing offered to cancel debts for some African nations ahead of last year’s election of the director-general of the Food and Agricultural Organization. The Chinese candidate won.

While in leadership roles, Chinese officials often steer the UN agenda to suit its interests.

During Fang Liu’s second term heading ICAO, Taiwan was not invited to the aviation body’s 2016 general assembly. Most recently, ICAO blocked Twitter users who made references to Taiwan’s participation in international organizations amid the global response to coronavirus.

At the International Telecommunication Union, which is headed by China’s Zhao Houlin, Chinese companies are helping to shape new facial recognition and surveillance standards at a time when Beijing’s use of the technology to track members of the country’s Uighur minority in Xinjiang has been criticized. Mr Zhao has also defended the Chinese telecommunications group, Huawei, against American criticism.

It is imperative the US and other WIPO members that are concerned about IP protection and its positive effect on investment and innovation wake up. If we are serious about IP’s ability to drive economic growth, we need a WIPO leader who will promote the protection and enforcement of IP rights everywhere. The US and the rest of the UN must also act quickly to assess — and counteract — China’s broader efforts to control other international organization.