Only a day after Democratic presidential nominee John Kerry criticized
President Bush’s China trade policy enforcement, the United States Trade
Representative (USTR) office said Thursday it would seek additional industry
input on Beijing’s enforcement of intellectual property laws.
Earlier this week, Kerry wrote an editorial in The Wall Street
Journal saying the Bush administration “refuses to show our competitors
that we mean business. They have brought only one WTO case for every three
brought by the Clinton administration, while cutting trade enforcement
budgets and failing to stand up to China’s illegal currency manipulation.”
In previous stump speeches, Kerry has said the United States should be
tougher in enforcing intellectual property rights in China.
The USTR last week rejected a petition to seek World Trade Organization
(WTO) sanctions against China for its refusal to allow its currency value be
set by the free market, contending progress is being made with China on the
issue.
Thursday afternoon, Deputy USTR Josette Shiner called an impromptu media
gathering to stress that the administration’s number one concern is
protecting intellectual property rights. Shiner then released a letter sent
to a number of IT groups and entertainment companies, including the U.S. Chamber of
Commerce, the Business Software Alliance and the Motion Pictures Association
of America, seeking specific examples of copyright piracy in China.
Shiner said in the letter the comments received would be used to “accurately
measure progress” in China’s WTO intellectual property obligations. The
request for comments came only a day after a comment deadline for a USTR
report on China to Congress.
“To effectively evaluate China’s progress and to protect U.S. intellectual
property rights (IPR) interests in China, we need industry to provide data
on the prevalence of IPR infringement in China and provide examples of
specific individual cases where IPRs in China have or have not been
respected,” Shiner wrote.
Last spring, China, while attending a Joint Commission on Commerce and Trade
in Washington, agreed to address a number of IPR issues by the end of the
year. At that same meeting, the Bush administration scored a major victory
in its trade negotiations with Beijing when China indefinitely suspended a
looming deadline to impose a proprietary wireless LAN encryption scheme
within its borders.
The IPR issues “included a list we [USTR] had honed over many months with
various U.S. stakeholders, including small and medium industries and
copyright industries, to really determine what areas they felt needed the
most immediate improvement,” Shiner told reporters.
In addition to seeking a large range of data, Shiner wrote, “We encourage
industry to provide its detailed evaluation of specific strengths and
weaknesses of China’s legal regimes for enforcement of IPRs in light of
relevant international standards and U.S.-China bilateral commitments.”
In a separate filing for the USTR report to Congress, the Information
Technology Association of America (ITAA) has already claimed that China is
failing to enforce intellectual property laws and refusing to extend its
commitments to Web services.
“Although China’s rhetoric strikes the right chord with the international
community, its actions behind the scenes hit a sour note,” said ITAA
President Harris N. Miller in a statement released Friday. “To China, every
court ruling, every regulatory interpretation seems to be another
opportunity to protect her players domestically and to secure competitive
advantage in the world at large.”
Miller added, “The door to international trade must swing both ways. Every
day that China resists opening her markets to international competition is a
missed opportunity for the Chinese people and the global economy.”
According to the ITAA, China has made progress in developing a legal
framework for intellectual property rights, but is failing in enforcement
efforts.
“The shortfall in China’s intellectual property protection lies not in its
legal framework but more in the area of intellectual property rights
enforcement,” The ITAA comments state. “Although China has established a
Supreme People’s Court to hear only intellectual property issues,
international companies have not received satisfying results.”
The ITAA claims civil litigation in China is a time consuming and difficult
process. In its comments to the USTR, the ITAA says, “Furthermore,
successful litigants on the legal principle frequently find that the awarded
damages are inadequate to compensate for their losses.”
U.S. copyright holders estimate they lost $2.6 billion last year to illegal
copies of books, music, film and software in China.
“Until steps are taken to improve this environment, companies doing business
in China still face a high risk of intellectual property rights
infringement,” the ITAA states.
In addition to dropping its proprietary encryption standards in April, China
announced in July it would end its policy of giving rebates to domestic
producers of integrated circuit makers, while levying a 17 percent Value
Added Tax (VAT) on imported semiconductors. U.S. based chipmakers and
manufacturers had argued that the policy was in effect a tariff designed to
keep other competitors out of China’s market for such chips.
