Transcripts

The U.S. Makes Its Case Against China With The WTO

SUSIE GHARIB: There could be trade trouble brewing at Tiananmen Square tonight. The Bush administration is about to formally file a complaint against China with the World Trade Organization because the Asian nation refuses to crack down on piracy and counterfeiting there. And that's not all. The administration's also taking China to task on barriers to trade in books and music. Stephanie Dhue reports.

STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: From the latest DVD release to best-selling CDs, illegal copies sold in China are a $1 billion a year business. The U.S. trade representative Susan Schwab says part of the problem the U.S. wants the WTO to resolve is the low threshold China sets before it will enforce piracy laws.

SUSAN SCHWAB, UNITED STATES TRADE REPRESENTATIVE: If I took just one DVD off the pile back there, just one, leaving 499 still in place and there was a raid, most Chinese - the most Chinese authorities could do would be to seize the goods and impose an administrative fine. The proprietor could resume business within a short period of time without fear of criminal prosecution.

DHUE: The U.S. admits China has made some progress in the protection of intellectual property rights, but not enough to live up to world trade standards. The movie industry estimates piracy cost it $18 billion a year in lost revenue. Dan Glickman heads the Motion Picture Association. He says the WTO case should help China play by the rules.

DAN GLICKMAN, CHMN. & CEO, MOTION PICTURE ASSOCIATION OF AMERICA: There's really no way that a legitimate rules-based world trading system, you can have one major power kind of opting out of the system. So that's what we're saying here. They need to be a part of the system.

DHUE: Today's trade complaint does not include business software, another key intellectual property rights issue. The Chinese government last year agreed to require all hardware come pre-installed with legal software. China expert Bates Gill says resolving pirated CDs, books and movies will be more difficult.

BATES GILL, CHINA STUDIES, CENTER FOR STRATEGIC AND INT'L STUDIES: There they found a mechanism through agreeing with the Chinese government to impose a kind of regulatory requirement. It's a lot harder to do when you're talking about millions of people buying millions of CDs for entertainment purposes.

DHUE: Today's case increases trade tensions with China. The administration earlier this year brought a case against Chinese government subsidies and recently paved the way for U.S. companies to put tariffs on some Chinese paper imports. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.