U.S. Panel Demands China Pay For Copyright Piracy

Nov. 16, 2006
Counterfeit products account for 15% to 20% of products made in China.

The U.S. should sue China at the WTO over rampant copyright abuses, and ban U.S. Internet companies from revealing their users' identities to Beijing, a top panel said Nov. 16. The U.S.-China Economic and Security Review Commission, a bipartisan panel of experts appointed by Congress, issued its recommendations in a hard-hitting annual report.

On the economic front, the experts said Congress should urge the administration "to press ahead aggressively with a WTO case against China for its manifest failures to enforce intellectual property rights (IPR)." It also recommended that "Congress prohibit disclosure by U.S. companies to the Chinese government, in the absence of formal legal action by the Chinese government, of information about Chinese users or authors of online content."

Internet portal Yahoo came under fire last year for supplying information to Beijing that led to the arrest of Chinese journalist Shi Tao, who was jailed for 10 years for passing on a government censorship order through his Yahoo e-mail account. The press rights group Reporters Without Borders claims to have uncovered at least three other cases of "collaboration" between Yahoo and the Chinese police.

The commission cited estimates that IPR violations in China are costing American companies up to $4 billion in lost trade every year. "Many local governments in China are so financially dependent on the counterfeit trade that they are reluctant to interfere with the violations, and officials at those levels often profit personally from counterfeiting," the report said. Where the central government does act, according to the commission, it imposes token administrative fines on companies that churn out rip-off goods instead of prosecuting them.

Carolyn Bartholomew, the panel's Democratic vice chairman, said that during a fact-finding trip to China in June, the commissioners were given nothing but "excuses".

"A stark contradiction presented itself: Chinese authorities had somehow managed to prevent any counterfeiting of the 2008 Beijing Olympics logos," she said.

The commission cited Chinese government data estimating that counterfeit products account for 15% to 20% of products made in China, or 8% of China's $2.2 trillion gross domestic product (GDP).

But the U.S. government has stopped short of launching the kind of overarching action at the WTO demanded by the commission and by many in Congress, which in January will pass back to Democratic control.

Copyright Agence France-Presse, 2006

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