U.S. battles China over copyright piracy

The administration of President George W. Bush announced Monday it is filing two new trade cases against China over copyright piracy and restrictions on the sale of American movies, music and books there.

The action, announced by U.S. Trade Representative Susan Schwab, represented the latest move by the administration to respond to growing political pressure at home to do something about soaring U.S. trade deficits.

Schwab said the United States was filing with the World Trade Organization a case that will challenge Beijing's lax enforcement of violations of copyrights and trademarks on a wide range of products.

American companies contend they are losing billions of dollars in sales because of rampant copyright piracy.

The second case will challenge China's barriers to the sale of U.S.-produced movies, music and books.

"Piracy and counterfeiting levels in China remain unacceptably high," Schwab said in announcing the new cases. "Inadequate protection of intellectual property rights in China costs U.S. firms and workers billions of dollars each year."

The two new cases represent the latest effort by the administration to increase pressure on China now that Democrats, many highly critical of China's trade practices, have won control of the House and the Senate.

The U.S. trade deficit set a record for a fifth consecutive year in 2006 — at $765.3 billion US — with the imbalance with China climbing to $232.5 billion, the highest ever recorded with a single country.

In late March, the administration announced it was imposing penalty tariffs on Chinese glossy paper imports in a case that broke a 23-year precedent that had barred U.S. companies from seeking protection from unfair subsidies provided by the Chinese government.

In February, Schwab announced the administration was bringing a WTO case against China on the government subsidy issue.

The decision to go to the WTO with the two new trade cases will trigger a 60-day consultation period during which trade negotiators from both countries will try to resolve the two disputes.

'Largest marketplace for pirated goods'

If that fails, WTO hearing panels would be convened. If the U.S. wins the cases, it would be allowed to impose penalty economic sanctions on Chinese products.

In a statement, the Motion Picture Association of America said that American industries lost an estimated $2.3 billion US in revenue to copyright pirates in China in 2005 with only one out of every 10 DVDs sold in China a legal copy.

"China is, by virtually any and every measure, the world's largest marketplace for pirated goods," said MPA chairman Dan Glickman.

Mitch Bainwol, chairman of the Recording Industry Association of America, said that his industry welcomed the administration's decision to file the WTO cases. "The theft of music is pervasive in China and takes place virtually without meaningful consequence." he said.