US official's China piracy anger
The US says Chinese counterfeiting is eroding support for expanding trade.
Last Modified: 14 Nov 2006 19:21 GMT
Gutierrez said "there are more infringing goods from China than from all [other] countries combined"

Carlos Gutierrez, the US commerce secretary, has said rampant Chinese counterfeiting is eroding American support for expanding bilateral trade, and held out a complaint to the World Trade Organisation (WTO) as an option.

He warned business executives in Beijing that illegal copying of medicines threatened consumers' health.

Gutierrez said many Americans "point to the lack of robust IP [intellectual property] protection in China as a top reason why we should put protectionist policies in place".

Washington is already considering complaining to the WTO about China's enforcement of patents and copyright.

Gutierrez said he preferred dialogue to settle US complaints, but an action before the Geneva-based trade umpire was one of the options if talks failed.

He said: "We have those tools at our disposal and we're not going to rule them out."

China friction
In a meeting with Gutierrez, Wen Jiabao, China's prime minister, urged Washington to resist any confrontation.

Wen said: "Consultation and dialogue are the right way to settle bilateral economic and trade frictions."

Gutierrez said commercial piracy was one cause of the United States' ballooning trade deficit with China, on course this year to break last year's record $202bn gap.

He said piracy was losing US industry about $2.3bn a year in revenues for films, music and digital goods.

In Beijing, pirate DVDs cost about $1, much cheaper than legitimate copies sold in wealthy countries.

Last year, US customs made 8,000 seizures valued at $93m. That figures has already been surpassed this year with more than 14,000 seizures valued at over $156m.

Worse nation

Gutierrez said: "There are more infringing goods from China than from all [other] countries combined."

He praised China's leaders for stepping up punishment of counterfeiters, but said "the reality, of course, is we are still behind the criminals and pirates".

Chinese officials say their country has made extraordinary progress in fighting pirates, but have also said it is unrealistic to expect the problem to disappear soon.

Bo Xilai, China's commerce minister, said last week that taking his country to the WTO over commercial piracy would be "senseless" and have an "extremely negative impact".

Gutierrez said staunching China's appetite for pirate products would ultimately depend on opening the country's market to more legitimate films and other goods.

China currently limits the number of foreign films that can be shown in cinemas to about 20 a year and their release is often delayed, allowing pirate DVDs to swamp the market.

Gutierrez said "market access is the key factor".

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