China issue: U.S. knocks WTO doors

U.S negotiations with China have ended in a stalemate. The U.S has now approached the World Trade Organization and complained against China over copyright and piracy issues.

This action by U.S. Trade Representative Sue Schwab was highly appreciated by the entertainment and publishing industries. The U.S.
trade deficit with China soared to $232.5 billion, which propelled the U.S government to knock WTO’s doors. Moreover, the Democrats in the Congress had been accusing the government of not doing enough to confront China's lax enforcement against pirated products.

Referring to the announcement by The Supreme People's Court stating that manufacturing 500 or more counterfeit discs of software, movies or music could land the person in jail for up to three years, Schwab said, "That's clearly a step in the right direction, but it does not go far enough to solve the fundamental problem"

Schwab asserted that although China had taken important steps in cracking the whip on factories and stores that produce and sell pirated goods, the imitation levels in China remain incongruously high. This piracy costs U.S. firms and workers billions of dollars each year. Schwab said, "This is more than a handbag here or logo item there; it is often theft on a grand scale."

The gravity of the situation can be gauged from the fact that 90 percent of U.S. software commercially available in China is pirated at an annual cost to the U.S. economy of about $2 billion, with copyright losses reaching $3 billion.

Rep. Sander Levin, D-Mich., and chairman of the trade subcommittee in the House, openly accused China of piracy and said, "No country has done more to undermine American intellectual property than China, and yet we have not held them accountable to the rules of trade. Active enforcement must be a consistent part of American trade policy and practice, not a response to pressure."

United States has filed two cases against China. The first argues that China does not have a satisfactory legal structure to put into effect copyrights and trademarks. The other confronts China's barriers to foreign books, music and movies in its domestic market.