Larry Kudlow Is DEAD WRONG On China And Intellectual Property

Joanne Butler | Former Staffer, House Ways and Means Committee

While having Larry Kudlow as the head of the White House Economic Council is terrific, I’m cold on his idea about how to stop China from stealing intellectual property rights (IPR).

When it comes to intellectual property theft, the People’s Republic of China has had decades of experience. Back in the 1990s, I was the USDA representative on several panels reviewing thefts of IPR by various countries, including China.

As then-President Bill Clinton had plans to obtain membership for China in the World Trade Organization, our review panels were meaningless. No matter how many IPR violations China had, it never met the Clinton threshold for sanctions.

However, since China was not yet a WTO member, the United States could have put sanctions on China very easily (due to a law about trade with communist countries).

Clinton’s U.S. Trade Representative would give China a hearty wet-noodle slap across the wrist, and that was it.  The George W. Bush and Barack Obama administrations did likewise, but in fairness, this was after China had become a WTO member. The communist country trade law no longer applied and any sanctions the U.S. would impose would undergo a time-consuming WTO review.

Those administrations viewed U.S. imposition of sanctions as an iffy bet. Chances were good the WTO would find the U.S. to be the guilty party, and allow the sanctioned country (e.g., China) to retaliate against the U.S.

President Donald Trump, thankfully, has abandoned the wet-noodle strategy of the past 30 years. But where does Larry Kudlow fit in?

Mr. Kudlow has proposed the U.S. assemble a coalition of countries to take on the problem of China’s IPR theft.

Bluntly, this is a horrible idea.

It’s horrible because building a coalition would delay action on China by years.

And it’s unnecessary. The United States, China’s is largest market, and we do not need a coalition to strengthen our argument

Let’s look at the second-largest market Kudlow likely would want in his coalition: the European Union.

As the EU is allergic to anything proposed by the U.S., it’s unlikely to join the IPR coalition. Even worse, waiting for the EU to take a decision on joining would involve years.

How many years? Five or 10 would be unsurprising. The EU labyrinthine system of consultative groups, working parties, review committees, etc., boggles the mind. And on a super-sensitive subject such as China’s IPR violations, the full force of the EU labyrinth would be used.

Thus, Mr. Kudlow should steer clear of any discussions of ‘coalitions’ if the Trump administration is to significantly and promptly crack down on China’s IPR violations. By the time the EU came to a decision to join the coalition, it’s likely the second Trump administration would be coming to an end – with no action taken against China.

Discussing coalitions on television is easy; building them is hard and time consuming. And President Trump is not a patient man.

A word to the wise, Mr. Kudlow.

Joanne Butler is a graduate of the Kennedy School at Harvard, was a professional staff member (Republican) at the House Ways and Means Committee and served in President George W. Bush’s administration. The Ghanaian poet, Kwesi Brew, has described her as ‘vibrant.’


The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.

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