Espinel Comments on U.S. Win in WTO Complaint Against China

A U.S. trade official has indicated that the Bush administration has prevailed in part of its complaint against China in the World Trade Organization (WTO) regarding enforcement of laws governing copyright piracy and trademark theft, prompting comments by Professor Victoria Espinel on the importance of the decision.

Espinel told Bloomberg reporter Mark Drajem, "The scope of piracy in China is vast. Where the Chinese have set up roadblocks to enforcement, this case could be a big step forward."

The WTO judges' ruling comes in the organization's first case targeting enforcement of intellectual property protections and may result in future sanctions against China. The U.S. has complained about the scale of theft of trademarked and copyrighted goods by China and has argued for some time that China has not followed the dictates of global trade rules.

"We knew this had the potential to be a real seminal case," Espinel said. "It was one of the risks we took."

U.S. Wins Some Parts of WTO Complaint Against China, Bloomberg, October 9, 2008. By Mark Drajem.

"The U.S. prevailed in arguing that China is not destroying fake or pirated items that it confiscates, as it is required to do under global trade rules, the official said on the condition of anonymity.

"The WTO also sided with the U.S. in saying the Chinese government must provide copyright protection for movies, music and books before those items are cleared for sale in China by censorship authorities. Before the censors clear new movies or music, bootleg copies are often available for sale on the streets of Beijing or Shanghai, according to the U.S. filing.

"China was able to fend off a longstanding complaint by the U.S. that China creates safe harbors for copyright thieves by limiting criminal prosecution to large-scale producers or sellers, the official said. The WTO said the U.S. hadn't shown that those exemptions for low-quantity sales qualify as commercial-scale piracy, the official said.

"Depending on the details of that aspect of the legal decision, the case may also set a negative precedent for the U.S. as it tries to persuade China and other nations to take tougher actions to protect trademarks and copyrights."

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