Economic and Trade Agreement Between the Government of the United States and the Government of the People's Republic of China

by the Governments of the People's Republic of China and of the United States of America

ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA

PREAMBLE

The Government of the People’s Republic of China and the Government of the United States of America (collectively the “Parties”),

RECOGNIZING the importance of their bilateral economic and trade relationship;

REALIZING that it is in the interests of both countries that trade grow and that there is adherence to international norms so as to promote market-based outcomes;

CONVINCED of the benefits of contributing to the harmonious development and expansion of world trade and providing a catalyst to broader international cooperation;

ACKNOWLEDGING the existing trade and investment concerns that have been identified by the Parties; and

RECOGNIZING the desirability of resolving existing and any future trade and investment concerns as constructively and expeditiously as possible,

HAVE AGREED as follows:

CHAPTER 1 INTELLECTUAL PROPERTY

Section A: General Obligations

The United States recognizes the importance of intellectual property protection. China recognizes the importance of establishing and implementing a comprehensive legal system of intellectual property protection and enforcement as it transforms from a major intellectual property consumer to a major intellectual property producer. China believes that enhancing intellectual property protection and enforcement is in the interest of building an innovative country, growing innovation-driven enterprises, and promoting high quality economic growth.

Article 1.1:

China and the United States hereby affirm that they undertake provisions with respect to intellectual property, as set forth in Sections A through K.

Article 1.2:

The Parties shall ensure fair, adequate, and effective protection and enforcement of intellectual property rights. Each Party shall ensure fair and equitable market access to persons of the other Party that rely upon intellectual property protection.

Section B: Trade Secrets and Confidential Business Information

The United States emphasizes trade secret protection. China regards trade secret protection as a core element of optimizing the business environment. The Parties agree to ensure effective protection for trade secrets and confidential business information and effective enforcement against the misappropriation of such information.^[1]

Article 1.3:

Scope of Actors Liable for Trade Secret Misappropriation

1. The Parties shall ensure that all natural or legal persons can be subject to liability for trade secret misappropriation.

2. China shall define “operators” in trade secret misappropriation to include all natural persons, groups of persons, and legal persons.

3. The United States affirms that existing U.S. measures afford treatment equivalent to that provided for in this Article.

Article 1.4: Scope of Prohibited Acts Constituting Trade Secret Misappropriation

1. The Parties shall ensure that the scope of prohibited acts subject to liability for trade secret misappropriation provides full coverage for methods of trade secret theft.

2. China shall enumerate additional acts constituting trade secret misappropriation, especially:

(a) electronic intrusions;

(b) breach or inducement of a breach of duty not to disclose information that is secret or intended to be kept secret; and

(c) unauthorized disclosure or use that occurs after the acquisition of a trade secret under circumstances giving rise to a duty to protect the trade secret from disclosure or to limit the use of the trade secret.

3. China and the United States agree to strengthen cooperation on trade secret protection.

4. The United States affirms that existing U.S. measures afford treatment equivalent to that provided for in this Article.

Article 1.5: Burden-Shifting in a Civil Proceeding

1. The Parties shall provide that the burden of production of evidence or burden of proof, as appropriate, shifts to the accused party in a civil judicial proceeding for trade secret misappropriation where the holder of a trade secret has produced prima facie evidence, including circumstantial evidence, of a reasonable indication of trade secret misappropriation by the accused party.

2. China shall provide that:

(a) the burden of proof or burden of production of evidence, as appropriate, shifts to the accused party to show that it did not misappropriate a trade secret once a holder of a trade secret produces:

(i) evidence that the accused party had access or opportunity to obtain a trade secret and the information used by the accused party is materially the same as that trade secret; (ii) evidence that a trade secret has been or risks being disclosed or used by the accused party; or

(iii) other evidence that its trade secret(s) were misappropriated by the accused party; and

(b) under the circumstance that the right holder provides preliminary evidence that measures were taken to keep the claimed trade secret confidential, the burden of proof or burden of production of evidence, as appropriate, shifts to the accused party to show that a trade secret identified by a holder is generally known among persons within the circles that normally deal with the kind of information in question or is readily accessible, and therefore is not a trade secret.

3. The United States affirms that existing U.S. measures afford treatment equivalent to that provided for in this Article.

Article 1.6: Provisional Measures to Prevent the Use of Trade Secrets

1. The Parties shall provide for prompt and effective provisional measures to prevent the use of misappropriated trade secrets.

2. China shall identify the use or attempted use of claimed trade secret information as an “urgent situation” that provides its judicial authorities the authority to order the grant of a preliminary injunction based on the specific facts and circumstances of a case.

3. The United States affirms that existing U.S. measures afford treatment equivalent to that provided for in this Article.

Article 1.7: Threshold for Initiating Criminal Enforcement

1. The Parties shall eliminate any requirement that the holder of a trade secret establish actual losses as a prerequisite to initiation of a criminal investigation for misappropriation of a trade secret.

2. China shall:

(a) as an interim step, clarify that “great loss” as a threshold for criminal enforcement under the trade secret provision in the relevant law can be fully shown by remedial costs, such as those incurred to mitigate damage to business operations or planning or to re-secure computer or other systems, and substantially lower all the thresholds for initiating criminal enforcement; and

(b) as a subsequent step, eliminate in all applicable measures any requirement that the holder of a trade secret establish actual losses as a prerequisite to initiation of a criminal investigation for misappropriation of a trade secret. ====Article 1.8: Criminal Procedures and Penalties====

1. The Parties shall provide for the application of criminal procedures and penalties to address willful trade secret misappropriation.

2. China's criminal procedures and penalties shall at least encompass cases of trade secret misappropriation through theft, fraud, physical or electronic intrusion for an unlawful purpose, and the unauthorized or improper use of a computer system in the scope of prohibited acts.

3. The United States affirms that existing U.S. measures afford treatment equivalent to that provided for in this Article.

Article 1.9: Protecting Trade Secrets and Confidential Business Information from Unauthorized Disclosure by Government Authorities

1. To further strengthen the protection of trade secrets, as well as better encourage various enterprises to innovate, China shall prohibit the unauthorized disclosure of undisclosed information, trade secrets, or confidential business information by government personnel or third party experts or advisors in any criminal, civil, administrative, or regulatory proceedings conducted at either the central or sub-central levels of government in which such information is submitted.

2. China shall require administrative agencies and other authorities at all levels to:

(a) limit requests for information to no more than necessary for the legitimate exercise of investigative or regulatory authority;

(b) limit access to submitted information to only government personnel necessary for the exercise of legitimate investigative or regulatory functions;

(c) ensure the security and protection of submitted information;

(d) ensure that no third party experts or advisors who compete with the submitter of the information or have any actual or likely financial interest in the result of the investigative or regulatory process have access to such information;

(e) establish a process for persons seeking an exemption from disclosure and a mechanism for challenging disclosures to third parties; and

(f) provide criminal, civil, and administrative penalties, including monetary fines, the suspension or termination of employment, and, as part of the final measures amending the relevant laws, imprisonment, for the unauthorized disclosure of a trade secret or confidential business information that shall deter such unauthorized disclosure.

3. The United States affirms that existing U.S. measures afford treatment equivalent to that provided for in this Article.

Section C: Pharmaceutical-Related Intellectual Proper

Pharmaceuticals are a matter concerning people's life and health, and there continues to be a need for finding new treatments and cures, such as for cancer, diabetes, hypertension, and stroke, among others. To promote innovation and cooperation in the pharmaceutical sector and to better meet the needs of patients, the Parties shall provide for effective protection and enforcement of pharmaceutical-related intellectual property rights, including patents and undisclosed test or other data submitted as a condition of marketing approval.

Article 1.10: Consideration of Supplemental Data

1. China shall permit pharmaceutical patent applicants to rely on supplemental data to satisfy relevant requirements for patentability, including sufficiency of disclosure and inventive step, during patent examination proceedings, patent review proceedings, and judicial proceedings.

2. The United States affirms that existing U.S. measures afford treatment equivalent to that provided for in this Article.

Article 1.11: Effective Mechanism for Early Resolution of Patent Disputes

1. If China permits, as a condition of approving the marketing of a pharmaceutical product, including a biologic, persons, other than the person originally submitting the safety and efficacy information, to rely on evidence or information concerning the safety and efficacy of a product that was previously approved, such as evidence of prior marketing approval by China or in another territory, China shall provide:

(a) a system to provide notice to a patent holder, licensee, or holder of marketing approval, that such other person is seeking to market that product during the term of an applicable patent claiming the approved product or its approved method of use;

(b) adequate time and opportunity for such a patent holder to seek, prior to the marketing of an allegedly infringing product, available remedies in subparagraph (c); and

(c) procedures for judicial or administrative proceedings and expeditious remedies, such as preliminary injunctions or equivalent effective provisional measures, for the timely resolution of disputes concerning the validity or infringement of an applicable patent claiming an approved pharmaceutical product or its approved method of use.

2. China shall establish a nationwide system for pharmaceutical products consistent with paragraph 1, including by providing a cause of action to allow the patent holder, licensee, or holder of marketing approval to seek, prior to the marketing approval of an allegedly infringing product, civil judicial proceedings and expeditious remedies for the resolution of disputes concerning the validity or infringement of an applicable patent. China may also provide for administrative proceedings for the resolution of such disputes.

3. The United States affirms that existing U.S. measures afford treatment equivalent to that provided for in this Article.

Section D: Patents

Article 1.12: Effective Patent Term Extension

1. The Parties shall provide patent term extensions to compensate for unreasonable delays that occur in granting the patent or during pharmaceutical product marketing approvals.

2. China shall provide that: (a) China, at the request of the patent owner, shall extend the term of a patent to compensate for unreasonable delays, not attributable to the applicant, that occur in granting the patent. For purposes of this provision, an unreasonable delay shall at least include a delay in the issuance of the patent of more than four years from the date of filing of the application in China, or three years after a request for examination of the application, whichever is later.

(b) With respect to patents covering a new pharmaceutical product that is approved for marketing in China and methods of making or using a new pharmaceutical product that is approved for marketing in China, China, at the request of the patent owner, shall make available an adjustment of the patent term or the term of the patent rights of a patent covering a new product, its approved method of use, or a method of making the product to compensate the patent owner for unreasonable curtailment of the effective patent term as a result of the marketing approval process related to the first commercial use of that product in China. Any such adjustment shall confer all of the exclusive rights, subject to the same limitations and exceptions, of the patent claims of the product, its method of use, or its method of manufacture in the originally issued patent as applicable to the approved product and the approved method of use of the product. China may limit such adjustments to no more than five years and may limit the resulting effective patent term to no more than 14 years from the date of marketing approval in China.

3. The United States affirms that existing U.S. measures afford treatment equivalent to that provided for in this Article.

Section E: Piracy and Counterfeiting on E-Commerce Platforms

In order to promote the development of e-commerce, China and the United States shall strengthen cooperation and jointly and individually combat infringement and counterfeiting in the e-commerce market. The Parties shall reduce piracy and counterfeiting, including by reducing barriers, if any, to making legitimate content available in a timely manner to consumers and eligible for copyright protection, and providing effective enforcement against e-commerce platforms.

Article 1.13: Combating Online Infringement

1. China shall provide enforcement procedures that permit effective and expeditious action by right holders against infringement that occurs in the online environment, including an effective notice and takedown system to address infringement.

2. China shall:

(a) require expeditious takedowns;

(b) eliminate liability for erroneous takedown notices submitted in good faith;

(c) extend to 20 working days the deadline for right holders to file a judicial or administrative complaint after receipt of a counter-notification; and

(d) ensure validity of takedown notices and counter-notifications, by requiring relevant information for notices and counter-notifications and penalizing notices and counter-notifications submitted in bad faith.

3. The United States affirms that existing U.S. enforcement procedures permit action by right holders for infringement that occurs in the online environment.

4. The Parties agree to further cooperate, as appropriate, to combat infringement.

Article 1.14: Infringement on Major E-Commerce Platforms

1. The Parties shall combat the prevalence of counterfeit or pirated goods on e-commerce platforms by taking effective action with respect to major e-commerce platforms that fail to take necessary measures against the infringement of intellectual property rights.

2. China shall provide that e-commerce platforms may have their operating licenses revoked for repeated failures to curb the sale of counterfeit or pirated goods.

3. The United States affirms that it is studying additional means to combat the sale of counterfeit or pirated goods.

Section F: Geographical Indications

The Parties shall ensure full transparency and procedural fairness with respect to the protection of geographical indications, including safeguards for generic^[2] terms (also known as common names), respect for prior trademark rights, and clear procedures to allow for opposition and cancellation, as well as fair market access for exports of a Party relying on trademarks or the use of generic terms.

Article 1.15: Geographical Indications and International Agreements

1. China shall ensure that any measures taken in connection with pending or future requests from any other trading partner for recognition or protection of a geographical indication pursuant to an international agreement do not undermine market access for U.S. exports to China of goods and services using trademarks and generic terms.

2. China shall give its trading partners, including the United States, necessary opportunities to raise disagreement about enumerated geographical indications in lists, annexes, appendices, or side letters, in any such agreement with another trading partner.

3. The United States affirms that existing U.S. measures afford treatment equivalent to that provided for in this Article.

Article 1.16: General Market Access-related GI Concerns

1. China shall ensure that:

(a) competent authorities, when determining whether a term is generic in China, take into account how consumers understand the term in China, including as indicated by the following:

(i) competent sources such as dictionaries, newspapers, and relevant websites;

(ii) how the good referenced by the term is marketed and used in trade in China;

(iii) whether the term is used, as appropriate, in relevant standards to refer to a type or class of goods in China, such as pursuant to a standard promulgated by the Codex Alimentarius; and

(iv) whether the good in question is imported into China, in significant quantities, from a place other than the territory identified in the application or petition, and in a way that will not mislead the public about its place of origin, and whether those imported goods are named by the term, and Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/10 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/11 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/12 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/13 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/14 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/15 Cooperation activities and initiatives undertaken in connection with the intellectual property chapter of this Agreement shall be subject to the availability of resources, and on request, and on terms and conditions mutually agreed upon between the Parties.

Article 1.33:

The Parties agree to strengthen bilateral cooperation on the protection of intellectual property rights and promote pragmatic cooperation in this area. China National Intellectual Property Administration and the United States Patent and Trademark Office will discuss biennial cooperation work plans in the area of intellectual property, including joint programs, industry outreach, information and expert exchanges, regular interaction through meetings and other communications, and public awareness.

Section K: Implementation

Article 1.34:

Each Party shall determine the appropriate method of implementing the provisions of this Agreement within its own system and practice. If necessary, each Party shall provide suggestions for the amendment of laws to its legislative body according to its domestic legislation procedure. Consistent with the Bilateral Evaluation and Dispute Resolution Chapter, each Party shall ensure that its obligations under this Agreement are fully implemented.

Article 1.35:

Within 30 working days after the date of entry into force of this Agreement, China will promulgate an Action Plan to strengthen intellectual property protection aimed at promoting its high-quality growth. This Action Plan shall include, but not be limited to, measures that China will take to implement its obligations under this Chapter and the date by which each measure will go into effect.

Article 1.36:

The United States affirms that its existing measures are consistent with its obligations in this Chapter.

CHAPTER 2 TECHNOLOGY TRANSFER

The Parties affirm the importance of ensuring that the transfer of technology occurs on voluntary, market-based terms and recognize that forced technology transfer is a significant concern. The Parties further recognize the importance of undertaking steps to address these issues, in light of the profound impact of technology and technological change on the world economy.

To enhance mutual trust and cooperation between the Parties with respect to technology issues, protect intellectual property, promote trade and investment, and establish a foundation for addressing long-standing structural concerns, the Parties have agreed as follows:

Article 2.1: General Obligations

1. Natural or legal persons (“persons”) of a Party shall have effective access to and be able to operate openly and freely in the jurisdiction of the other Party without any force or pressure from the other Party to transfer their technology to persons of the other Party.

2. Any transfer or licensing of technology between persons of a Party and those of the other Party must be based on market terms that are voluntary and reflect mutual agreement.

3. A Party shall not support or direct the outbound foreign direct investment activities of its persons aimed at acquiring foreign technology with respect to sectors and industries targeted by its industrial plans that create distortion.

Article 2.2: Market Access

Neither Party shall require or pressure persons of the other Party to transfer technology to its persons in relation to acquisitions, joint ventures, or other investment transactions.

Article 2.3: Administrative and Licensing Requirements and Processes

1. Neither Party shall adopt or maintain administrative and licensing requirements and processes that require or pressure technology transfer from persons of the other Party to its persons. Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/18 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/19

CHAPTER 3 TRADE IN FOOD AND AGRICULTURAL PRODUCTS^[3]

Article 3.1: General

1. To enhance mutual trust and friendly cooperation between China and the United States on issues affecting agricultural trade, to establish a foundation for addressing long-standing concerns, and to make agriculture a strong pillar of the bilateral relationship, the Parties:

(a) recognizing the importance of their agriculture sectors, of ensuring safe and reliable supplies of food and agricultural products, and of helping to meet the demand of the two countries’ peoples for food and agricultural products, intend to intensify cooperation in agriculture, to expand each Party’s market for food and agricultural products, and to promote the growth of trade in food and agricultural products between the Parties;

(b) considering that science- and risk- based sanitary and phytosanitary (SPS) measures play a crucial role in the protection of human, animal, and plant life and health, while the use of SPS measures for purposes of protectionism negatively impacts the welfare of consumers and producers, and recognizing the importance of ensuring that SPS measures are science-based, non-discriminatory, and account for regional differences in sanitary and phytosanitary characteristics, agree that neither Party shall apply sanitary or phytosanitary measures in a manner which would constitute a disguised restriction on international trade;

(c) considering that the benefits of an agricultural trading system are reduced when importers and exporters are unfairly impeded from taking full advantage of agricultural market access opportunities, recognize that tariff-rate quota (TRQ) administration should not be employed as a means of preventing the full utilization of agricultural TRQs;

(d) noting the ability of agricultural biotechnology to improve lives by helping to feed growing populations, by reducing the environmental impact of agriculture, and by promoting more sustainable production, intend to maintain, for products of agricultural biotechnology, science- and risk-based regulatory frameworks and efficient authorization processes, in order to facilitate increased trade in such products; and Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/21 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/22 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/23 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF 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CHAPTER 5 MACROECONOMIC POLICIES AND EXCHANGE RATE MATTERS AND TRANSPARENCY

Article 5.1: General Provisions

1. Each Party shall respect the other Party’s autonomy in monetary policy, in accordance with its domestic law.

2. The Parties recognize that strong fundamentals, sound policies, and a resilient international monetary system are essential to the stability of exchange rates, contributing to strong and sustainable growth and investment. Flexible exchange rates, where feasible, can serve as a shock absorber.

3. The Parties share the objective of pursuing policies that strengthen underlying economic fundamentals, foster growth and transparency, and avoid unsustainable external imbalances.

4. The Parties shall honor currency-related commitments each has undertaken in G20 communiqués, including to refrain from competitive devaluations and the targeting of exchange rates for competitive purposes.

Article 5.2: Exchange Rate Practices

1. Each Party confirms that it is bound under the International Monetary Fund (IMF) Articles of Agreement to avoid manipulating exchange rates or the international monetary system in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage.

2. Each Party should:

(a) achieve and maintain a market-determined exchange rate regime; and

(b) strengthen underlying economic fundamentals, which reinforces the conditions for macroeconomic and exchange rate stability.

3. The Parties shall refrain from competitive devaluations and not target exchange rates for competitive purposes, including through large-scale, persistent, one-sided intervention in exchange markets. Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/53 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/54

CHAPTER 6 EXPANDING TRADE

Article 6.1: Objectives

1. The Parties acknowledge that trade and economic structural changes resulting from this Agreement and from other actions being taken by China to open up its economy and improve its trade regime should lead to improved trade flows, including significant increases in exports of goods and services to China by the United States and other countries.

2. The Parties believe that expanding trade is conducive to the improvement of their bilateral trade relationship, the optimal allocation of resources, economic restructuring, and sustainable economic development, given the high degree of complementarity in trade between them.

3. The Parties recognize that the United States produces and can supply high-quality, competitively priced goods and services, while China needs to increase the importation of quality and affordable goods and services to satisfy the increasing demand from Chinese consumers.

4. The Parties accordingly seek to work constructively and cooperatively toward an improved bilateral trade relationship and to explore appropriate steps to acilitate increased trade.

Article 6.2: Trade Opportunities

1. During the two-year period from January 1, 2020 through December 31, 2021, China shall ensure that purchases and imports into China from the United States of the manufactured goods, agricultural goods, energy products, and services identified in Annex 6.1 exceed the corresponding 2017 baseline amount by no less than $200 billion. Specifically, China shall ensure that:

(a) For the category of manufactured goods identified in Annex 6.1, no less than $32.9 billion above the corresponding 2017 baseline amount is purchased and imported into China from the United States in calendar year 2020, and no less than $44.8 billion above the corresponding 2017 baseline amount is purchased and imported into China from the United States in calendar year 2021;

(b) For the category of agricultural goods identified in Annex 6.1, no less than $12.5 billion above the corresponding 2017 baseline amount is purchased and imported into China from the United States in calendar year 2020, and no less than $19.5 billion above the corresponding 2017 baseline amount is purchased and imported into China from the United States in calendar year 2021; Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/56 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/57 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/58 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/59 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/60 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/61 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/62 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/63 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/64 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/65 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/66 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/67 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/68 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/69 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/70 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/71 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/72 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/73 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/74 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/75 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/76 Page:ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA.pdf/77 CHAPTER 7

BILATERAL EVALUATION AND DISPUTE RESOLUTION

Article 7.1: Bilateral Evaluation and Dispute Resolution Arrangement

1. To ensure prompt and effective implementation of this Agreement, the Parties establish the following Bilateral Evaluation and Dispute Resolution Arrangement (the "Arrangement").

2. The purpose and mandate of the Arrangement are to effectively implement this Agreement, to resolve issues in the economic and trade relationship of the Parties in a fair, expeditious, and respectful manner, and to avoid the escalation of economic and trade disputes and their impact on other areas of the Parties' relationship. The Parties recognize the importance of strengthened bilateral communications in this effort.

Article 7.2: Arrangement Structure

1. High-level Engagement. The Parties shall create the Trade Framework Group to discuss the implementation of this Agreement, which shall be led by the United States Trade Representative and a designated Vice Premier of the People's Republic of China. The Trade Framework Group shall discuss (a) the overall situation regarding implementation of this Agreement, (b) major problems with respect to implementation, and (c) arrangements for future work between the Parties. The Parties shall resume macroeconomic meetings to discuss overall economic issues, which shall be led by the United States Secretary of the Treasury and the designated Vice Premier of the People's Republic of China. Both Parties shall make every effort to ensure that meetings of the Trade Framework Group and the macroeconomic meetings are efficient and oriented toward solving problems.

2. Daily Work. The Arrangement shall include a Bilateral Evaluation and Dispute Resolution Office for each Party.

(a) For the United States, the Bilateral Evaluation and Dispute Resolution Office shall be headed by a designated Deputy United States Trade Representative. For China, the Bilateral Evaluation and Dispute Resolution Office shall be headed by a designated Vice Minister under the designated Vice Premier.

(b) Each Party shall designate an official (the "designated official") to assist in the work of the Arrangement. By the date of entry into force of this Agreement, each Party shall provide the contact information of its respective designated official. Each Party shall update such information as necessary.

(c) The Bilateral Evaluation and Dispute Resolution Offices shall (a) assess specific issues relating to implementation of this Agreement, (b) receive complaints regarding implementation submitted by either Party, and (c) attempt to resolve disputes through consultations. In carrying out its work, each Bilateral Evaluation and Dispute Resolution Office may consult with government agencies with relevant expertise.

Article 7.3: Requests for Information

A Party may request at any meeting, or prior to a meeting, information from the other Party regarding a matter relating to the implementation of this Agreement. The other Party shall provide a written response containing the requested information. In the event that a Party is not able to provide the requested information, the response shall contain a specific explanation of why the information cannot be provided within the time limit and the specific date when the information will be provided. Nothing in this provision shall obligate a Party to provide confidential information to the other Party.

Article 7.4: Dispute Resolution

1. Appeal. Where one Party (the "Complaining Party") believes that the other Party (the "Party Complained Against") is not acting in accordance with this Agreement, the Complaining Party may submit an appeal ("Appeal") to the Bilateral Evaluation and Dispute Resolution Office of the Party Complained Against. An Appeal shall be in writing and shall contain sufficient information to allow the Party Complained Against to make a proper assessment of the matter. The Appeal may, but need not, include information that could identify any company at issue or business confidential information. The Appeal and any information and matters related to it are confidential and shall not be shared beyond the Bilateral Evaluation and Dispute Resolution Office, absent the agreement of the Parties.

2. Scope of Appeal.

(a) The dispute resolution process covers all matters that occur after the date of entry into force of this Agreement.

(b) Any measure, including an action, of a Party taken prior to the date of entry into force of this Agreement, which is maintained or continues to have effect after that date, is also subject to the dispute resolution process. For an Appeal of such a measure, the Complaining Party shall provide to the Party Complained Against an explanation of the continuing effect of the measure.

3. Assessment. The Party Complained Against shall carry out and complete an assessment of the Appeal. The Party Complained Against shall consider the facts, nature, and seriousness of the issues presented by the Appeal. After the assessment is completed, the designated officials shall begin consultations.

4. Dispute Procedures. Both Parties will attempt to resolve the Appeal in the most efficient manner using the following procedures:

(a) If the Appeal cannot be resolved by the designated officials, the concerns may be raised to the designated Deputy United States Trade Representative and the designated Vice Minister. If the Appeal is not resolved at the deputy or vice-ministerial level, the Complaining Party may present the issue to the United States Trade Representative and the designated Vice Premier of the People's Republic of China.

(b) If the concerns of the Complaining Party are not resolved at a meeting between the United States Trade Representative and the designated Vice Premier of the People's Republic of China, the Parties shall engage in expedited consultations on the response to the damages or losses incurred by the Complaining Party. If the Parties reach consensus on a response, the response shall be implemented. If the Parties do not reach consensus on a response, the Complaining Party may resort to taking action based on facts provided during the consultations, including by suspending an obligation under this Agreement or by adopting a remedial measure in a proportionate way that it considers appropriate with the purpose of preventing the escalation of the situation and maintaining the normal bilateral trade relationship. The Party Complained Against can initiate an urgent meeting between the United States Trade Representative and the designated Vice Premier of the People's Republic of China before the effective date of the action to be taken by the Complaining Party. If the Party Complained Against considers that the action by the Complaining Party pursuant to this subparagraph was taken in good faith, the Party Complained Against may not adopt a counter-response, or otherwise challenge such action. If the Party Complained Against considers that the action of the Complaining Party was taken in bad faith, the remedy is to withdraw from this Agreement by providing written notice of withdrawal to the Complaining Party.

5. Notwithstanding the provisions of subparagraph 4(a), if either the United States Trade Representative or the designated Vice Premier of the People's Republic of China considers that an implementation issue is a matter of urgency, either one may raise the matter directly at a meeting between them without prior discussions at lower level meetings. If such a meeting cannot be timely scheduled for this purpose, the Complaining Party may resort to taking action as provided in subparagraph 4(b).

Article 7.5: Implementation Period

The Arrangement shall be in effect at the same time as this Agreement and shall remain in place as long as this Agreement is in effect. The Parties may assess the Arrangement and discuss any necessary adjustments to it at Trade Framework Group meetings.

Article 7.6: Miscellaneous

1. The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other agreements to which the Parties are party.

2. In the event that a natural disaster or other unforeseeable event outside the control of the Parties delays a Party from timely complying with its obligations under this Agreement, the Parties shall consult with each other.

Annex 7-A

WORKING PROCEDURES OF THE BILATERAL EVALUATION AND DISPUTE RESOLUTION ARRANGEMENT

Schedule of Meetings

1. Meetings of the Trade Framework Group shall be held every six months.

2. The macroeconomic meetings shall be held regularly.

3. The heads of each Party’s Bilateral Evaluation and Dispute Resolution Office shall meet on a quarterly basis.

4. The designated officials of each Party shall meet at least once a month.

5. During the first two years after this Agreement enters into force, the frequency of meetings may be increased as appropriate. Meetings may be held in person or through any means available to the Parties.

Responses to Requests for Information

Pursuant to Article 7.3, a Party shall respond within 15 working days to any requests for information from the other Party.

Dispute Resolution Timeline

1. Pursuant to Article 7.4.3, the Party Complained Against shall have 10 working days from the date of the receipt of the Appeal to carry out and complete an assessment of the Appeal.

2. Pursuant to Article 7.4.4(a):

a. The designated officials shall have 21 calendar days from the date of the receipt of the Appeal to reach a resolution.

b. If the Appeal is not resolved by the designated officials, the designated Deputy United States Trade Representative and the designated Vice Minister shall have 45 calendar days from the date of the receipt of the Appeal to reach a resolution.

c. If the Appeal is not resolved at the deputy or vice-ministerial level and the Complaining Party presents the issue to the United States Trade Representative and the designated Vice Premier of the People’s Republic of China, these officials shall hold a meeting within 30 calendar days from the date the Complaining Party requests such a meeting.

3. Pursuant to Article 7.4.5, if either the United States Trade Representative or the designated Vice Premier of the People’s Republic of China requests to meet on a matter of urgency, a meeting shall be scheduled within 30 calendar days from the date of receipt of that request.

4. The Parties may agree, in writing, to extend the time periods set forth in this Annex.

5. The calculation of working days in this Annex is based on the official calendar of the government of the Party Complained Against.

CHAPTER 8 FINAL PROVISIONS

Article 8.1: Annexes, Appendices, and Footnotes

The annexes, appendices, and footnotes to this Agreement constitute an integral part of this Agreement.

Article 8.2: Amendments

1. The Parties may agree, in writing, to amend this Agreement.

2. An amendment shall enter into force 60 days after the date on which the Parties exchange written notifications of the approval of the amendment in accordance with their respective applicable domestic procedures, or such other date as the Parties may decide.

Article 8.3: Entry into Force and Termination

1.This Agreement shall enter into force within 30 days of signature by both Parties or as of the date on which the Parties have notified each other in writing of the completion of their respective applicable domestic procedures, whichever is sooner.

2. Either Party may terminate this Agreement by providing written notice of termination to the other Party. The termination shall take effect 60 days after the date on which a Party has provided that written notice to the other Party, or on such other date as the Parties may decide.

Article 8.4: Further Negotiations

The Parties will agree upon the timing of further negotiations.

Article 8.5: Notice and Comment on Implementing Measures

Except as otherwise provided in this Agreement, each Party shall provide no less than 45 days for public comment on all proposed measures implementing this Agreement. Each Party shall consider concerns raised by the other Party in any final measure or amendment intended to implement this Agreement.

Article 8.6: Authentic Texts

The English and Chinese versions of this Agreement are equally authentic.

IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective Governments, have signed this Agreement.

DONE, at Washington, District of Columbia, in duplicate, this 15th day of January, 2020.

FOR THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA:

FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA:

Footnotes

1. The Parties agree that the term “confidential business information” concerns or relates to the trade secrets, processes, operations, style of works, or apparatus, or to the production, business transactions, or logistics, customer information, inventories, or amount or source of any income, profits, losses, or expenditures of any person, natural or legal, or other information of commercial value, the disclosure of which is likely to have the effect of causing substantial harm to the competitive position of such person from which the information was obtained.
2. The term "generic" may be deemed by a Party to be synonymous with "a term customary in the common language as the common name for the associated good."
3. Article 8.5 (Final Provisions) shall not apply with respect to any proposed or final measure, including an amendment to an existing measure, intended to implement this Chapter, including its Annexes and Appendices.