Bush Officials Ask China to Explain Piracy Reduction Efforts

WASHINGTON – The Bush administration, under pressure to deal with a soaring trade deficit with China, asked the Chinese Wednesday to outline what they are doing to reduce piracy (search) of American movies, computer programs and other copyrighted material.

The formal request for details on China's enforcement efforts was made through the Geneva-based World Trade Organization and could be a precursor to economic sanctions. Japan and Switzerland filed similar information requests.

"The United States is deeply concerned by the violations of intellectual property rights in China," U.S. Trade Representative Rob Portman (search) said in announcing the action. He said "piracy and counterfeiting remain rampant in China despite years of engagement on this issue."

Chu Maoming, a spokesman for the Chinese Embassy in Washington, said his government was doing a great deal to crack down on copyright piracy,including establishing a high-level task force headed by Vice Premier Wu Yi "which explicitly shows the Chinese government's determination to fight against violations of intellectual property rights."

The U.S. request sought information on how many enforcement cases have been brought by the Chinese, including a breakdown of how many resulted in criminal penalties and civil fines.

The U.S. is seeking a response by Jan. 23. U.S. officials said they were hopeful China would comply but that Chinese officials had given no indication during preliminary talks about what they intended to do.

American businesses contend they are losing billions of dollars a year because China is failing to enforce the laws it has on the books to prevent the piracy of American-made movies, music, computer software and other products. The U.S. industry has estimated that in some categories virtually 90 percent of the items being sold in China are pirated.

"Today's action speaks loudly to the will of the administration to press the Chinese government for key reforms that will help China meet its international obligations," said Mitch Bainwol, chairman of the Recording Industry Association of America.

Portman said that if China believes it is doing enough to protect intellectual property "then it should view this process as a chance to prove its case. Our goal is to get detailed information that will help pinpoint exactly where the enforcement system is breaking down so we can decide the appropriate next step."

U.S. business groups have been lobbying the administration to bring a formal WTO complaint, a step that could lead to economic sanctions if the United States wins its case.

China announced this summer after meetings with Commerce Secretary Carlos Gutierrez (search) in Beijing that it would file more criminal charges in copyright cases, crack down on Chinese exports of pirated products and focus special attention on movie piracy.

The administration is facing growing pressure from Congress to do more to narrow a soaring trade deficit with China, which hit a record $162 billion last year and so far this year is running 30 percent above the 2004 pace.

A number of lawmakers are supporting legislation that would impose 27.5 percent tariffs on all Chinese imports unless China goes further to allow its currency to rise in value against the dollar. U.S. manufacturers contend that the yuan is as much as 40 percent undervalued, giving Chinese products a huge competitive advantage.

U.S. industry would like the administration to target China in its next congressionally required report on whether any countries in the world are manipulating their currencies to gain unfair trade advantages. The administration said that report will be released in November.