An Old Idea Comes Back: China-US Arbitration in a Neutral Country

In his assessment of the prospects of US-China relations, former Australian Prime Minister Kevin Rudd makes the following suggestion to resolve intellectual property (IP) issues:

Intellectual-property protection, however, is deeply problematic. Previous agreements reached under US president Barack Obama’s administration could be reconstituted. But the jurisdictional enforcement of breaches is still hopeless.

One possible mechanism is to subject relevant contracts between Chinese and foreign firms to international commercial arbitration bodies in Singapore or Switzerland, designed to deal specifically with the enforcement of IP protection.

In both contracts Vulcan signed with the Chinese for the sale of the 560 hammers and boiler (1981 and 1983,) our agent Amtech wisely included the following provision:

18. SPECIAL PROVISIONS: Arbitration in Sweden or Canada

Not all of these special provisions were wise (or at least to the Chinese’ taste) but this one was, although thankfully for both parties we never had recourse to this process.

One thing that has always struck this observer as unwise is the typical American attitude that everything should be everywhere just like it is in the US.  Old exporters (and Vulcan certainly had a good track record in that regard) knew better, but our voices have been ignored, especially in the years of US unilateralism following the end of the Cold War.  The rise of China, whose view of life is very different from ours, should occasion the revival of a more “multilateral” approach, but such an approach will require a different style of mind than has been exhibited up until now.

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