GENEVA: The World Trade Organization has partly sided with the United States in a dispute with China over product piracy, officials said.
The WTO panel faulted China for not prosecuting pirates who copy CDs and DVDs before they are passed by censors, one trade diplomat who had reviewed the interim ruling said Thursday.
But Washington suffered a setback as the panel found that Chinese thresholds for prosecuting piracy do not break WTO rules, the official said.
The U.S. claims the thresholds allow pirates of everything from designer clothes to medicines to tailor their operations to avoid prosecution by staying just below the minimum level of 500 infringing copies.
Officials differed in their reading of the panel's decision on a third issue — concerning whether seized goods can be reintroduced into the market if the infringing material is removed.
A U.S. trade official said Washington won on that count too, favoring it in two of three issues in the case.
The officials spoke on condition of anonymity because of WTO rules.
The U.S. has for years complained that China is a safe haven for product piracy and counterfeiting and that it is one of the world's biggest sources of illegally copied goods.
The U.S. brought the case last year after negotiations with China to resolve the dispute failed. Beijing heavily criticized Washington for taking the issue to the WTO's dispute settlement panel, saying it could damage trade relations between the countries.
The interim ruling can be challenged by both parties, and a final decision may be years away.
Ultimately, the WTO can authorize U.S. trade sanctions against China worth billions of dollars annually — the amount the U.S. claims its companies lose because of China's lax enforcement.
The U.S. government has been under pressure from Congress to defend American interests before the WTO because of Washington's soaring trade deficit and lost manufacturing jobs at home, which critics blame in part on unfair trade practices by foreign nations.
1 comment:
U.S. Wins Some Parts of WTO Complaint Against China (Update1)
By Mark Drajem
Oct. 9 (Bloomberg) -- The Bush administration prevailed in part of its complaint at the World Trade Organization against China over its enforcement of laws against copyright piracy and trademark theft, a U.S. trade official said.
Today's ruling is confidential and was given to representatives for the countries in Geneva. The ruling from the WTO judges comes in the first case at the trade body that targets the enforcement of intellectual property protections.
The decision may result in future sanctions against China, giving the U.S. more leverage to press China to cut down on piracy rates that industry groups say are among the highest in the world. Illegal copying of movies, music and software in China cost companies more than $3.5 billion a year in lost sales, U.S. industry groups estimate.
``The scope of piracy in China is vast,'' said Victoria Espinel, a law professor at George Mason University in Virginia. ``Where the Chinese have set up roadblocks to enforcement, this case could be a big step forward.''
The U.S. prevailed in arguing that China is not destroying fake or pirated items that it confiscates, as it is required to do under global trade rules, the official said on the condition of anonymity.
Copyright Protection
The WTO also sided with the U.S. in saying the Chinese government must provide copyright protection for movies, music and books before those items are cleared for sale in China by censorship authorities. Before the censors clear new movies or music, bootleg copies are often available for sale on the streets of Beijing or Shanghai, according to the U.S. filing.
China was able to fend off a longstanding complaint by the U.S. that China creates safe harbors for copyright thieves by limiting criminal prosecution to large-scale producers or sellers, the official said. The WTO said the U.S. hadn't shown that those exemptions for low-quantity sales qualify as commercial-scale piracy, the official said.
Depending on the details of that aspect of the legal decision, the case may also set a negative precedent for the U.S. as it tries to persuade China and other nations to take tougher actions to protect trademarks and copyrights.
`Seminal Case'
``We knew this had the potential to be a real seminal case,'' Espinel said. ``It was one of the risks we took.''
After years of complaining that China is at the center of a worldwide network that makes knockoffs of items such as Viagra and golf clubs, the U.S. brought the case in April 2007. The ruling will be published in early 2009, and at that point either side can appeal.
A spokesman for the Chinese Embassy in Washington didn't answer two telephone calls seeking comment.
The complaint about the widespread sale of pirated disks dates back more than a decade with China. In 1996, the U.S. was set to levy billions of dollars of sanctions against China before the Chinese agreed at the last minute to new measures to curb the export of pirated recordings and computer software.
Over the past three years, U.S. officials have complained about what they say is the scale of theft of trademarked and copyrighted goods in China.
To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net
Last Updated: October 9, 2008 17:02 EDT
Post a Comment