China's illegal copying of movies, music and software cost companies $2.2 billion in 2006 sales, according to an estimate by lobby groups representing Microsoft Corp., Walt Disney Co., and Vivendi SA. The WTO complaints are the first by the U.S. against China for breaching intellectual property rights, in a country where copying has extended to bags, golf clubs and even shampoo.The US claims that China isn't doing enough to protect intellectual property rights as counterfeiting and piracy there remain rampant (see the USTR's recent report on China for more), while China counter-claims that despite its efforts, the task of policing intellectual property violations is taxing given China's sheer size. Granted, China has taken some efforts to strengthen IP laws, though these do not appear strong enough to appease America. One of the arguments being made is that China should bolster its IP enforcement efforts for it will need to protect domestic IP as China develops a knowledge economy of its own:"The U.S. believes that now it's time to put more pressure'' on China, five years after the country became a WTO member, said Standard Chartered Plc's economist Stephen Green in Shanghai. "The U.S. believes that China has clearly infringed rules that it agreed to play by,'' prompting the action, he said...
"China has continued to demonstrate little success in actually enforcing its laws and regulations in the face of the challenges created by widespread counterfeiting, piracy and other forms of infringement,'' the U.S. trade office said in a report this week. "One major factor is China's chronic underutilization of deterrent criminal remedies.''
China's honeymoon period with the WTO on intellectual property and other issues may now be ending, and a real possibility exists that sanctions or retaliatory measures are on the horizon. But there may be strong non-coercive reasons for China's efforts to shore up its intellectual property regime as well. If China truly wants to become an innovation-oriented society -- there are sometimes suggestions along these lines -- it will have to do better in protecting its own creators of intellectual property.Folks, there are so many ongoing or pending US trade sanctions against China that I've almost lost count. To remedy this situation, I will make a comprehensive summary of these sanctions sometime in the near future. Maybe I should rename this site the "China Trade Sanction Blog"! You know it's true--everything I do, I do it for you [cue up Bryan Adams' power ballad.]
