EU challenges China at the WTO to defend its high-tech sector
The European Union is filing today a case against China at the World Trade Organization (WTO) for restricting EU companies from going to a foreign court to protect and use their patents.
China severely restricts EU companies with rights to key technologies (such as 3G, 4G and 5G) from protecting these rights when their patents are used illegally or without appropriate compensation by, for example, Chinese mobile phone manufacturers. The patent holders that do go to court outside China often face significant fines in China, putting them under pressure to settle for licensing fees below market rates.
This Chinese policy is extremely damaging to innovation and growth in Europe, effectively depriving European technology companies of the possibility to exercise and enforce the rights that give them a technological edge.
Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade, said: “We must protect the EU’s vibrant high-tech industry, an engine for innovation that ensures our leading role in developing future innovative technologies. EU companies have a right to seek justice on fair terms when their technology is used illegally. That is why we are launching WTO consultations today.”
Since August 2020, Chinese courts have been issuing decisions – known as “anti-suit injunctions” – to exert pressure on EU companies with high-tech patents and to prevent them from rightfully protecting their technologies. Chinese courts also use the threat of heavy fines to deter European companies from going to foreign courts.
This has left European high-tech companies at a significant disadvantage when fighting for their rights. Chinese manufacturers request these anti-suit injunctions to benefit from cheaper or even free access to European technology.
The EU has raised this issue with China on a number of occasions in an attempt to find a solution, to no avail. As the Chinese actions are, according to the EU, inconsistent with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the EU has requested consultations at the WTO.
The dispute settlement consultations that the EU has requested are the first step in WTO dispute settlement proceedings. If they do not lead to a satisfactory solution within 60 days, the EU can request the WTO to set up a panel to rule on the matter.
The patents concerned by this case are standard-essential patents (SEPs). SEPs are patents that are essential in order to manufacture goods that meet a certain international standard. Because the use of the technologies protected by these patents is mandatory for the production of, for example, a mobile phone, patent owners have committed to licensing these patents to manufacturers under fair, reasonable, and non-discriminatory (FRAND) terms. A mobile phone manufacturer should, therefore, obtain a license (subject to a license fee negotiated with the patent holder) for these patents. If a manufacturer does not obtain a licence, and/or refuses to pay, a patent holder can enforce these patents and get a court to stop the sales of the products incorporating that unlicensed technology.
In August 2020, China’s Supreme People’s Court decided that Chinese courts can prohibit patent holders from going to a non-Chinese court to enforce their patents by putting in place an “anti-suit injunction”. The Supreme People’s Court also decided that violation of the order can be sanctioned with a €130,000 daily fine. Since then, Chinese courts have adopted four such anti-suit injunctions against foreign patent holders.
Free will trumps determinism in Gulf politics
China’s mediation to normalise Saudi-Iranian diplomatic ties has been widely welcomed internationally, especially in the West Asian region. A clutch of unhappy states that do not want to see China stealing a march on any front, even if it advances the cause of world peace, mutely watched, notes M.K. Bhadrakumar, Indian Ambassador and prominent international observer.
The US led this pack of dead souls. But the US is also on the horns of a dilemma. Can it afford to be a spoiler?
Saudi Arabia is not only the fountainhead of petrodollar recycling — and, therefore, a pillar of the western banking system — but also America’s number one market for arms exports. Europe is facing energy crisis and the stability of the oil market is an overriding concern.
Saudi Arabia has shown remarkable maturity to maintain that its “Look East” policy and the strategic partnership with China do not mean it is dumping the Americans. Saudis are treading softly.
Yet, the fact remains that the Saudi-Iranian deal drives a knife into the heart of the US’ West Asian strategy. The deal leaves the US and Israel badly isolated. The Jewish lobby may show its unhappiness during President Biden’s bid for another term. China has stolen a march on the US with far-reaching consequences, which signifies a foreign policy disaster for Biden.
Washington has not spoken the last word and may be plotting to push back the peace process from becoming mainstream politics of the West Asian region. The American commentators are visualising that the Saudi-Iranian normalisation will be a long haul and the odds are heavily stacked against it.
The Saudi official said China’s role makes it more likely that the terms of the deal will hold. “It (China) is a major stakeholder in the security and stability of the Gulf,” he noted. The official also revealed that the talks in Beijing involved “five very extensive” sessions on thorny issues. The most difficult topics were related to Yemen, the media, and China’s role, the official said.
Meanwhile, there are positive tidings in the air too — the likelihood of a foreign minister level meeting between Iran and Saudi Arabia in the near future and, more importantly, the reported letter of invitation from King Salman of Saudi Arabia to Iranian President Ebrahim Raeisi to visit Riyadh.
Iranian Foreign Minister Hossein Amirabdollahian remarked on Sunday with reference to the Yemeni crisis that “We [Iran] are working with Saudi Arabia on ensuring the stability of the region. We will not accept any threat against us from neighbouring countries.”
To be sure, the regional environment is improving. Signs of an overall easing of tensions have appeared. For the first visit of its kind in over a decade, the Turkish Foreign Minister was in Cairo and the Egyptian FM has been to Turkey and Syria.
Last week, on return from Beijing, Admiral Ali Shamkhani, secretary of Iran’s Supreme National Security Council headed for the UAE where President Sheikh Mohammed received him.
Soon after that Syrian President Bashar al-Assad arrived in the UAE on an official visit. “Syria has been absent from its brothers for too long, and the time has come for it to return to them and to its Arab surroundings,” Sheikh Mohamed told Assad during their historic meeting at the presidential palace.
Evidently, the regional states are tapping the “feel-good” generated by the Saudi-Iranian understanding. Contrary to the western propaganda of an estrangement lately between Saudi Arabia and the UAE, Sheikh Mohammed is identifying closely with the positive trends in the regional environment.
This is where China’s overarching role fostering dialogue and amity becomes decisive. The regional countries regard China as a benign interlocutor and the concerted attempts by the US and its junior partners to run down China make no impact on the regional states.
Fundamentally, both Saudi Arabia and Iran have compulsions to shift the locus of their national strategies to development and economic growth. This has received scant attention. The Western media has deliberately ignored this and instead demonised the Saudi Crown Prince and created a doomsday scenario for Iran’s Islamic regime.
That said, the known unknown is the tension building up over Iran’s nuclear programme… A Russian-Chinese coordinated effort is needed to forestall the US from raking up the nuclear issue in tandem with Israel and ratchet up tensions, including military tensions, in such a way that a pretext becomes available to destabilise the region and marginalise the Saudi-Iran agreement as the leitmotif of regional politics.
On balance, the regional states are acting on free will, increasingly and eschewing their determinism that was wedded to decisions and actions that were thought to be causally inevitable.
The realisation has dawned now that it is within the capacity of sovereign states to make decisions or perform actions independently of any prior event or state of the universe, stresses M.K. Bhadrakumar.
There is optimism that Syria stands to gain out of Saudi-Iranian rapprochement
The circumstances surrounding the flare-up in Syria between the US occupation forces and pro-Iranian militia groups remain murky. President Biden claims that the US is reacting, but there are signs that it is likely being proactive to create new facts on the ground, notes M.K. Bhadrakumar, Indian Ambassador and prominent international observer.
The US Central Command claims that following a drone attack on March 23 afternoon on an American base near Hasakah, at the direction of President Biden, retaliatory air strikes were undertaken later that night against “facilities used by groups affiliated with Iran’s Islamic Revolutionary Guards Corps.”
However, this version has been disputed by the spokesman of Iran’s Supreme National Security Council who accused Washington of “creating artificial crises and lying.” The Iranian official has alleged that “Over the past two days, American helicopters have carried out several sorties with the aim of increasing instability in Syria and transferred Daesh (Islamic State) terrorists in the territory of this country.”
He said Washington must be held accountable for such activities. The official warned that Tehran will give a prompt response to any US attack on whatever false pretext against Iranian bases that exist on Syrian soil at the request of Damascus for fighting terrorism.
Is the US deliberately ratcheting up tensions in Syria even as the China-brokered Saudi-Iranian rapprochement is radically changing the security scenario in the West Asian region in a positive direction?
There is optimism that Syria stands to gain out of Saudi-Iranian rapprochement. Already, the Saudi Foreign Ministry revealed that talks are going on with Syria for resuming consular services between the two countries, which will pave the way for the resumption of diplomatic relations and in turn make it possible to reinstate Syria’s membership of the Arab League.
Saudi Arabia has established an air bridge with Syria to send reef supplies for those affected by the devastating earthquake in February.
The backdrop is that the normalisation of relations between Syria and its estranged Arab neighbours has accelerated. It must be particularly galling for Washington that these regional states used to be active participants in the US-led regime change project to overthrow the government of President Bashar al-Assad. The Saudi-Iranian rapprochement badly isolates the US and Israel.
From such a perspective, it stands to reason that the US is once again stirring up the Syrian cauldron. Lately, Russian aircraft have been reported as frequently flying over the US’s military base At Tanf on the Syrian-Iraqi border where training camps for militant groups are known to exist.
Israel too is a stakeholder in keeping Syria unstable and weak. In the Israeli narrative, Iran-backed militia groups are increasing their capability in Syria in the last two years and continued US occupation of Syria is vital for balancing these groups. Israel is paranoid that a strong government in Damascus will inevitably start challenging its illegal occupation of Golan Heights.
A key factor in this matrix is the nascent process of Russian mediation between Turkiye and Syria. With an eye on the forthcoming presidential and parliamentary election in Turkiye in May, President Recep Erdogan is keen to achieve some visible progress in improving the ties with Syria.
Erdogan senses that the Turkish public opinion strongly favours normalisation with Syria. Polls in December showed that 59 percent of Turks would like an early repatriation of Syrian refugees who are a burden on Turkish economy, which has an inflation rate of 90 percent.
Significantly, Erdogan telephoned Russian President Vladimir Putin on Saturday and the Kremlin readout mentioned that amongst “topics concerning Russian-Turkish partnership in various fields,” during the conversation, “the Syrian issue was touched upon, and the importance of continuing the normalisation of Turkish-Syrian relations was underlined. In this regard the President of Türkiye highlighted the constructive mediatory role Russia has played in this process.”
It is entirely conceivable that Erdogan has sought Putin’s help and intervention to reach a modus vivendi with Assad quickly. Of course, this is a spectacular success story for Russian diplomacy — and for Putin personally — that the Kremlin is called upon to broker the Turkish-Syrian normalisation.
The China-brokered Saudi-Iranian normalisation hit Washington where it hurts. But if Putin now brokers peace between two other rival West Asian states, Biden will be exposed as hopelessly incompetent.
And, if Turkiye ends its military presence in Syria, the limelight will fall on the US’ illegal occupation of one-third of Syrian territory and the massive smuggling of oil and other resources from Syria in American military convoys.
India should take the Russia-China summit in its stride
The prospects of a joint communiqué emerging from the G 20 summit in September in India are becoming dim, notes Kanwal Sibal, a former Foreign Secretary to the Government of India, Ambassador to Turkey, Egypt, France and Russia.
The G20 meeting of the Finance Ministers/Central Bank Governors as well that of the Foreign Ministers ended with the Chair’s summary and not a joint document because no consensus could be reached on how the Ukraine conflict should be reflected in it. The West remains determined to include language condemning Russia in all joint statements whereas Russia, with China’s support, has hardened its position and is no longer willing to accept the language it had agreed to at the G 20 summit at Bali, in part because of India’s constructive diplomacy.
Since Bali the situation on the ground has become more destructive rather than the doors of dialogue and diplomacy being slowly opened.
The West’s strategy remains one of arming and financially aiding Ukraine not only to sustain its resistance but to enable it to launch a counter offensive to recover enough of the Russian annexed territory to force Russia to come to the negotiating table. Ukraine’s appeals, backed vociferously by Poland and the Baltic states, for more lethal arms, including artillery, tanks and now fighter aircraft, have found increasing support. In the background of the expanding militarisation of the conflict in the months after Bali, it is not surprising that positions on both sides have become harder.
US Secretary of State has warned that at the New Delhi G20 summit the West will not relent on its demand to condemn Russia. He foresees the G20 summit failing to issue a joint statement because of Russian and Chinese opposition, though that, in his view, will not lead to the collapse of the G20 process as there will be agreement on a whole host of other issues.
This is being unduly sanguine, as a failure at the summit level will expose the limitations of G 20 format to deal with various pressing issues of development, financial stability, economic growth, climate change and the like that the international community faces.
Other than this, if one of the objectives of the G20 is reviving multilateralism, the divisions within the G20 between the G7 and Russia and China in particular will in fact deal a further blow to multilateralism, as a format larger than the UN Security Council without any veto provisions would also have proved ineffective.
If the goal of the West is to isolate Russia, that is not being achieved.
Russian diplomacy in Africa and West Asia is active. Russia has just organised a Russia-Africa parliamentary conference in advance of the Russia-Africa summit in July 2023. Israel is being cautious in not aligning fully with the West’s position. Russia’s role in Central Asia is unaffected. The SCO processes are proceeding uninterruptedly, with the SCO summit to take place in India later this year. India is maintaining its close ties with Russia, with Minister Jaishankar stressing recently their steadiness over the yeas and their current economic expansion. Russia’s ties with China are being strategically consolidated further.
Chinese diplomacy has achieved a visible success in brokering an agreement between Iran and Saudi Arabia on restoration of their diplomatic ties, which fits into Russia’s close understandings with Saudi Arabia and Iran.
With Russia, Iran and India working on boosting the International North South Corridor, trade flows with Russia will increase. Russia as a permanent member of the UN Security Council cannot be isolated, as on many issues member states have to reach out to it diplomatically. Russia is a major arms supplier, as well as a major space power.
Being a major nuclear power it has an important role to play in the IAEA, for instance, as also in the area of peaceful nuclear cooperation in which it is cooperating with a few countries.
On the Ukraine issue, the US and NATO are putting open pressure on China not to supply lethal military arms to Russia. This ignores the fact that Russia itself is a major arms supplier to China, including the S400s. If the West can supply lethal arms to Ukraine to counter Russia, why is it wrong in principle for China to supply such arms to Russia? Why is it that China is being asked to be neutral and prove its neutrality while the West can fight a proxy war against Russia?
If India can pursue a degree of independence in its foreign policy despite open pressures from the US to dilute ties with Russia, why should one assume that Russia will not exercise its independent judgment on its relations with India and will yield to any Chinese pressure?
If Russia is satisfied with our neutrality on the proxy war between it and the West in Ukraine, why should we not be satisfied if Russia is neutral on issues between India and China?
We should take a balanced view on such matters, recognising of course the need to navigate very carefully in the choppy waters ahead. Our expectations from a successful G20 summit need to become much more realistic, concludes Kanval Sibal.
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