China faces WTO inquiry into fake goods
A formal investigation into China’s trade in pirated and counterfeit goods finally began today.
The World Trade Organisation is to examine US claims the country provides a safe haven for factories making fakes.
China is seen as one of the world’s biggest sources of illegally copies, ranging from DVDs, CDs and designer clothes to sporting goods and medications.
China blocked the inquiry last month, but was prevented today at a WTO dispute panel from delaying it a second time.
Beijing has said it is stepping up its fight against imitations of US copyrights and trademarks, and heavily criticised Washington earlier this year for starting the case, saying it could damage trade relations between the countries.
It could have huge impact on American industries from Hollywood to Silicon Valley in determining how they combat piracy.
The WTO panel’s scope will be limited to whether China has done enough to protect intellectual property rights.
But it could ultimately authorise US trade sanctions against worth billions of dollars annually – the amount the US claims its companies lose through fake copies.
Juan Millan, a US trade lawyer, told the dispute body last month that product piracy in China remains “unacceptably high.”
Mr Millan also complained that China refuses to criminalise piracy of American movies, music, books and software still being blocked from the Chinese market because of censorship review laws.
The US government has made a series of complaints to the WTO since last year amid pressure from Congress to do something about America’s soaring trade deficits and lost manufacturing jobs.
