U.S. firms fighting the flood of fakes

The United States posted its first intellectual property attache in Beijing in 2004 and plans additional attaches this year; dozens of copyright protection training programs have been conducted with Chinese officials since 2001, the U.S. government says.

Last year, America's trade envoy formally requested that China document what it was doing to enforce copyright protection under its WTO obligations; though China's response was "less than forthcoming," officials say they continue to push for those details.

The United States has also placed China on a U.S. “priority watch list” over concerns about Beijing's failure to improve protection of U.S. intellectual property.

‘Measured progress’ in China
A meeting between top U.S. and Chinese officials on the eve of President Hu Jintao's April visit to Washington "yielded measured progress" on the issue, according to Timothy Stratford, an assistant U.S. trade envoy for China affairs. China committed to take stronger action against producers of pirated optical discs and to make sure computers are pre-installed with legal operating system software.

Still, many were disappointed Hu did not make greater commitments to crack down on piracy when he met with U.S. President George W. Bush.

Above all, the United States has signaled its willingness to wield what's considered one of its most powerful weapons: a formal WTO complaint against China for inadequate enforcement of copyright protections; a ruling against China could lead to strict sanctions.

“Results are what matter to us,” Stratford recently told the U.S.-China Economic and Security Review Commission. “We will not shy away from using dispute settlement at the WTO when we feel China is not living up to its commitments.”

‘A paper tiger’
Critics say warnings are meaningless. The U.S. trade representative's office, Levin said, “is a paper tiger, I'm afraid.”

Lack of government leadership, the senator said, has forced the auto industry to "do too much of the policing itself and at great expense."

Bill Primosch, director for international business policy at the National Association of Manufacturers, said the U.S. government is faced with obstacles as it considers a WTO case. First, he said in an interview, it must make sure it can win. If the WTO ruled against the United States, for whatever reason, it could send a message to Beijing that its current approach is sufficient.

Fear of retaliation
Another problem is a reluctance by U.S. companies to cooperate publicly. Primosch said many are afraid that if they complain too loudly, China will retaliate, forcing them out of what's considered the most important major growth market in the world for U.S. manufacturers.

Until the problem is solved, industry representatives say many U.S. companies eyeing China face bleak prospects.

Patricia Schroeder, president of the Association of American Publishers, estimated in recent testimony that U.S. publishers in China lost $52 million last year, part of a "staggering amount of book piracy plaguing this most promising of markets."

Schroeder, a former member of Congress from Colorado, summed up the problem faced by many U.S. industries working in China: "China is a country that boasts millions upon millions of eager potential readers and scholars," she said.

"And these readers are largely being supplied with illegal goods."

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