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A fragile peace

After warnings, threats and 10 hours of post-deadline haggling, U.S. and Chinese negotiators last weekend averted a trade war by reaching agreement on a series of measures to protect U.S. intellectual property.
An America trade representative quickly touted the accord as “the single most comprehensive” enforcement agreement in the area of intellectual property the United States has ever concluded.
China’s trade minister was equally buoyant, saying that “we are determined to do well in protecting intellectual property rights.”
So, it’s back to business as usual between the two countries.
And what that means is, expect more friction and shots across the bow.
It’s useful to remember this is not the first time the United States and China have announced a major intellectual property rights pact. In 1991, the Chinese passed a set of laws designed to prevent piracy of computer software, compact discs, videotapes, movies and similar products.
But enforcement of those laws was almost non-existent. And laws without enforcement aren’t worth the paper on which they are written.
The same goes for trade agreements.
This time things will be different, trade officials on both sides insist, pointing to the provision that requires the Chinese–with U.S. consultation–to implement a detailed enforcement plan. Another provision calls for nearly two dozen anti-piracy task forces.
Still, a bit of skepticism is warranted–and not only because of China’s track record. As Greg Mastel of the Economic Strategy Institute in Washington, D.C., told the Wall Street Journal: “The greatest weakness in U.S. trade policy is the tendency to declare victory quickly.”
China has much to lose in trade hostilities with the United States and much to gain by demonstrating that it can hold up its end of a constructive economic relationship. But China also is a country in flux, and with the death of Deng Xiaoping apparently close, its stability will be sorely tested.
For the United States, firm resolve balanced by a degree of patience is likely to produce the best results–now and for years to come.

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