USTR Calls China Talks ‘Measured’

The United States and China are again negotiating over piracy and software
procurement practices. Meeting in Beijing last week, the talks resulted in
“measured” progress.

The meetings ended with a number of commitments by Beijing to address two
major areas of concern to the U.S. high tech industry: lowering China’s 90
percent piracy rate and forcing fair, open and nondiscriminatory government
software procurement procedures.

Beijing agreed to increase criminal prosecution of intellectual property
right (IPR) violations, curb exports of counterfeit goods, boost market
access for U.S. software companies and fulfill its World Trade Organization
(WTO) commitments in the areas of distribution rights and direct sales.

That, however, isn’t good enough, according to U.S. Trade Representative
(USTR) Rob Portman.

“There remain very serious concerns regarding American access to the Chinese
market,” Portman said in a statement. “China is a major beneficiary of the
global trading system. Along with that comes responsibilities, including
opening their market to our products and services just as we have opened

Earlier this year, the USTR placed China on the United States’ Priority
Watch List for intellectual property theft. Beijing joined Russia and 12
other trading partners that Washington says are not effectively protecting
or enforcing intellectual property rights (IPR).

Portman added in his statement, “Our work is far from finished. We remain
concerned about many areas and we will redouble our efforts to address these
issues with the Chinese Government.”

Although China joined the WTO in 2001, it is not a member of the WTO
Agreement on Government Procurement. To gain membership and access to the
worldwide government software business, China drafted regulations that
Washington claims stacks the deck against American companies.

“We were also heartened to hear that China will not issue software
procurement regulations pending further work with industry and governments,”
Robert Holleyman, president and CEO of the Business Software Alliance (BSA),
said in a statement. “[Our] members were also encouraged by China’s
commitment to hasten its efforts to join the WTO Government Procurement
Agreement (GPA).”

Holleyman also said the BSA is encouraged by Beijing’s piracy stance.
According to the BSA, software piracy in the Asia-Pacific region cost
manufacturers close to $8 billion in 2004.

Worldwide, losses due to software
piracy were estimated at more than $32 billion. The BSA puts piracy rates in
China at 90 percent and Russia at 87 percent.

“Deterring piracy requires adequate resources and enforcement actions and we
are encouraged by the commitments made by the Chinese government to take
these important steps,” he said.

The U.S. Chamber of Commerce and the tech trade group Americans for
Technology Leadership echoed Portman’s and Holleyman’s comments.

“The results of the meeting demonstrate that the process continues to be a
constructive one that delivers tangible results for U.S. exporters, and
investors,” said Myron Brilliant, chamber vice president for Asia. “But even
as we recognize China’s renewed commitment to enforce intellectual property
rights and address other U.S. commercial concerns, we underscore that words
are not a substitute for action.”

Jim Prendergast of Americans for Technology Leadership said, “We are
encouraged by this announcement, but ultimately the proof will be in the
action taken by the Chinese government.”

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