The counterfeiting of popular media, designer clothing, sporting goods and medications is practically a free-for-all in China. On Tuesday, the United States took a stand against the loss of billions of dollars and what U.S. Trade Representative Susan Schwab describes as an "unacceptably high" level of piracy. After years of attempting to use diplomatic means to press China to reduce its trade deficit with the United States, it has filed two complaints with the World Trade Organization over copyright policy and restrictions on the sale of American movies, music and books.
In truth, it could be years before the WTO would hand down retaliatory sanctions. Yet, intellectual property deserves legal protection. If China wants to participate fully in trade, failing to enforce copyright and trademark protections could undermine economic and trade relations between it and the United States.
Although there is overwhelming evidence of illegal copying of everything from basketball shoes to designer dresses, China expressed "strong dissatisfaction" at the United States' actions. China's top intellectual property official, Tian Lipu, went so far as to say, "To do a better job in combating piracy, we need dialogue and cooperation, not confrontation and condemnation," the official Xinhua News Agency reported. In fairness, negotiation did produce one big victory for the American computer software industry last year when China agreed to sell all computers with operating software.
Otherwise, the Bush administration's economic team appears to have lost patience with China on other trade matters. It doesn't help matters that China's trade deficit with the United States now stands at $323 billion.
The second case filed at the WTO alleges that Beijing has failed to remove import and distribution restrictions on copyrighted U.S. goods such as newspapers, magazines, DVDs , CDs and video games. For some of these products, distribution is limited to Chinese state-owned companies, according to the WTO filings.
As China inches closer to hosting the 2008 Summer Games, one wonders how it will be able to comply with the very stringent copyright requirements of the International Olympic Committee. Although Beijing is bristling at the United States' decision to file complaints with the WTO, it should instead consider this an opportunity to bolster its enforcement of copyright and trade protections before committing gaffes of Olympic proportions.