US lodges WTO complaint over Chinese copyright piracy
04.10.07, 10:29 AM ET

GENEVA (Thomson Financial) - The United States has formally lodged its WTO complaint on copyright piracy in China, as fake DVDs and counterfeited luxury goods became the latest issue to sour trade relations between the giants.
¡°We can confirm that we have submitted the complaint (to the World Trade Organisation),¡± Magda Sieckert of the US trade delegation in Geneva told AFP.
Under World Trade Organisation rules, the two countries will now have 60 days to try to iron out their differences in bilateral negotiations.
If they do not reach agreement, Washington will then have the right to demand WTO arbitration.
The United States could then gain the right to impose retaliatory duties and tariffs on Chinese imports if a WTO settlement panel ultimately rules in its favour.
US Trade Representative Susan Schwab, announcing the action against China, had said Monday that piracy and counterfeiting levels remained 'unacceptably high' despite Beijing's stated commitments to tackling the problem.
US companies claim the wide availability of fake goods such as DVDs, software, luxury goods, books, auto parts, footwear and even pharmaceuticals deprives them of billions of dollars of revenue per year.
The United States also filed a separate case at the Geneva-based trade watchdog accusing China of restricting the distribution of foreign music, films and books, further sharpening tensions with the booming Asian giant.
China joined the WTO in 2001 and enjoyed a grace period in the first few years of its membership. However, members such as the United States are now flexing their muscles and demanding stricter enforcement of trade rules.
A report by the office of the US Trade Representative last December said China's record in implementing its WTO commitments was 'decidedly mixed.'
In March 2006, Washington launched a complaint over Beijing's tariffs on foreign parts for local vehicle assembly, which was subsequently joined by the European Union and Canada.
A little under a year later, in February 2007, the United States took China to the WTO in a complaint over industrial subsidies. And in an unprecedented decision late last month, Washington announced penalty tariffs on China to offset government subsidies for paper products.
China warned that the latest US move was ill-informed and would damage trade relations between the two countries.
China feels regret and is strongly dissatisfied (with the US decision),' commerce ministry spokesman Wang Xinpei said in a statement.
China has issued detailed regulations to fight piracy, but the continuing widespread availability of pirated goods -- from fresh Hollywood blockbusters on DVD to fake Louis Vuitton handbags -- is widely seen as proof that not enough is being done to combat the problem.
Under new rules issued last week in China, anyone who produces more than 2,500 discs of movies, music or computer software is now regarded a serious offender and can be jailed for seven years.
The new rules also allow for jail terms of up to three years for anyone manufacturing 500 discs.