Intellectual-property rights violations in China cost the U.S. billions each year, leading to complaints to the World Trade OrganizationFor years Washington has been pounding on the table to try to get Beijing to clamp down on rampant piracy and counterfeiting. But now the U.S. has decided that talking tough just isn't enough. On Apr. 10 it took the fight to the next level by filing a pair of formal complaints with the World Trade Organization.
"Inadequate protection of intellectual-property rights in China costs U.S. firms and workers billions of dollars each year," said U.S. Trade Representative (USTR) Susan Schwab. Predictably, Beijing is peeved. A statement posted on the Chinese Ministry of Commerce's Web site warned that the WTO action will "bring an unfavorable impact on bilateral trade."
In fact, it's the lopsided nature of that commercial relationship that compelled the U.S. to act. Congress has been pressuring the White House to take steps to narrow the U.S. trade deficit with China, which swelled to $233 billion last year. According to an American trade official, the USTR was about to haul China into WTO arbitration last fall, but Beijing secured a temporary reprieve. In the end, it boiled down to an issue of "face"—something the Chinese understand well. "It was important for our integrity and credibility for us to follow through," says the official.
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