China falling short of WTO requirements: U.S. official

Asian Economic News, Sept 15, 2003

BEIJING, Sept. 12 Kyodo

A top U.S. commerce official criticized shortcomings in China's enforcement of anti-piracy laws Friday, saying that illegal manufacturing of goods from airplane parts to CDs threatens the nation's World Trade Organization compliance.

The United States is not considering a formal WTO complaint now and would rather work with Chinese officials to correct piracy enforcement problems, said William Lash, U.S. assistant secretary of commerce for market access and compliance.

''Obviously not much is truly being done to deter piracy,'' Lash said at a Beijing press conference on the second day of his three-day visit to China.

''We've had very little information as to actual sentencing of (intellectual property rights) violators. Laws on the books are important, but unless people are going to prison or paying severe fines, which we're not really seeing, it's hard to assume there's been true deterrents.''

He said that because China exports from $20 billion to $25 billion in goods to the U.S. per year, counterfeit issues are particularly important.

''It's not just DVDs or CDs. It is things like pharmaceuticals, which can be life-threatening, it's airplane parts, life-threatening, car parts, life-threatening, down to mundane things in daily life like chewing gum and playing cards,'' he said.

Lash met with officials of the Commerce Ministry and the Ministry of Labor and Social Security, top prosecutors, and members of the U.S. business community in China.

China joined the WTO in late 2001, becoming the international governing body's 143rd member after more than 15 years of negotiations. During the negotiations, foreign trade officials hesitated to approve China's entry for fear it would not comply with WTO rules. Since then, foreign countries have sparred with China over steel, farm products and intellectual property.

In June, U.S. agricultural trade negotiator Allen Johnson said he saw ''some progress'' on WTO-related farm product rules but criticized China's use of quotas to block U.S. imports of cotton, wheat, corn and soybean oil. Lash noted that other countries were also concerned.

In March, the Japanese Ministry of Economy, Trade and Industry said in a report that China had not followed WTO rules by allowing piracy of video games, CDs and taped movies. The ministry urged China to improve its law enforcement.

Intellectual property rights experts in Beijing say China has made improvements since joining the WTO but that problems persist at the street level, especially outside bigger cities.

''In the major cities, the government is winning,'' said Gu Baidi, a property rights attorney with the Jiahe law firm in Beijing. ''It's fair to say that over the last couple of years, progress has been made, but (piracy) is still there. The judiciary and the government are always fighting with the offenders.''

Piracy of music and videos has eased in bigger cities, Gu said. However, along a major street three blocks from where Lash gave his press conference, people routinely sell pirated CDs to foreign tourists.

Chinese people historically disobey government orders on business practices, said Kenji Hirakawa, director of intellectual property rights with the Sino-Japanese Economic Association. He said people in southern China violate copyright rules exceptionally often despite central government efforts to comply with the WTO. Lash said people in western China were violating anti-piracy laws.

Lash said the U.S. is prepared to help China work out the problems. He suggested China establish a special court for copyright and patent violators and advised relatively aware Beijing authorities to educate provincial leaders about the laws.

''We also understand this is not an easy market for China or anyone else,'' he said. ''The first step is to work with our colleagues.''