U.S. Piracy Case May Raise Trade Tensions With China
WASHINGTON -- The Bush administration is preparing to take its longstanding spat with China over pirated movies, music and books to the World Trade Organization, a move that could notch up trade tensions between the two countries.
The administration this coming week will file twin cases challenging China's lax enforcement of its own antipiracy laws as well as its tight restrictions on the distribution of foreign movies, music and printed material. The antipiracy complaints will mark the culmination of several years of work within the administration to build a case against China over alleged intellectual-property abuses, which hit U.S. exports ranging from auto parts to scientific journals.
While supported by the U.S. movie and music businesses, the impending complaints have stirred unease among executives of other U.S. industries, including drug companies and high-tech manufacturers. Many fear that a clash with China over piracy could undermine the increasing cooperation they have won over the past year with local Chinese officials on combating the problem.
Industry groups that aren't expected to support the case include the Business Software Alliance, whose members include Microsoft Corp. and Apple Inc., and the Pharmaceutical Research and Manufacturers of America, the drug industry's main trade group. Both sectors have made their own market-access and antipiracy advances and don't want to see that work disturbed, administration and industry officials said.
The cases will add to a list of U.S. trade actions against China in recent months. The administration in February filed a WTO case alleging that Beijing doled out unfair subsidies to a range of Chinese industries, while last month the Commerce Department broke decades of precedent by opening the way for U.S. companies to seek higher tariffs on some Chinese paper imports found to have benefited from government subsidies.
The first case being filed this coming week will make a number of specific complaints against China's enforcement of its own piracy laws. Current Chinese law says that in the case of counterfeit CDs, for instance, one must be caught with at least 500 to be charged with a crime. The U.S. will argue that there should be no such threshold.
The case will also argue that it should be illegal to either distribute or produce counterfeit goods. Chinese law requires one to be caught doing both before being charged.
"This case is going to be very technical, very targeted and very specific," said one industry official with knowledge of the administration's case.
The other complaint will target what the U.S. alleges to be overly restrictive rules on the distribution of foreign CDs, DVDs, books and other media products. The case won't seek to overturn the limit placed by Beijing on foreign films that are allowed to show in Chinese theaters, which is now set at 20 films a year.
The cases come as China has taken a number of moves recently to crack down on piracy, increasing penalties and lowering the thresholds for what constitutes a criminal act. Chinese provincial authorities have worked alongside U.S. industries to carry out a series of raids against factories and warehouses trafficking in counterfeit goods.
From: Wall Street Journal, By NEIL KING JR.
Date: April 7, 2007 Back