WASHINGTON  —  The Bush administration, responding to America's yawning trade deficit, said Friday in its annual report on copyright theft that China must do more to crack down on rampant piracy (search).

The administration said it was putting China and 13 other nations on a priority watch list, which subjects the countries to special reviews of their efforts to deal with the theft of U.S. copyrighted material (search) such as movies, music and computer software.

"China must take action to address rampant piracy and counterfeiting, including increasing the number of criminal (intellectual property right) cases and further opening its market to legitimate copyright and other goods," said acting U.S. Trade Representative Peter Allgeier.

In its report, USTR said that China was being elevated to the priority watch list because of serious concerns about piracy and counterfeiting rates that remain at extremely high levels due to China's inadequate enforcement system.

By some estimates, 90 percent of the movies, music and computer programs sold in China are pirated products. U.S. industry has estimated it is losing between $200 billion and $250 billion annually because of copyright piracy around the world, an enormous sum but still well below the record $666 billion current account trade deficit (search) the country recorded in 2004.

Besides China, the others put on the priority watch list were Argentina, Brazil, Egypt, India, Indonesia, Israel, Kuwait, Lebanon, Pakistan, the Philippines, Russia, Turkey and Venezuela.

They face special U.S. reviews and the potential threat of economic sanctions if the United States decides to bring trade cases against them before the World Trade Organization.

Another 36 nations from Azerbaijan to Vietnam were placed on a watch list for special reviews of their efforts to enforce intellectual property rights.

One nation, Ukraine, has been designated as a priority foreign country because of its property rights violations. It is currently subject to $75 million in U.S. sanctions.