SCUTTLING HIGH-TECH PIRACY
MAY 8, 1996
The White House said it may impose restrictive trade restrictions on China. The restrictions would be in response to China's failure to live up to a trade agreement signed last year meant to protect intellectual property, U.S. trade officials said. China's piracy cost's American businesses $2 billion annually, industry officials estimate. The U.S.'s salvo of trade sanctions, though, could be the opening shots of a trade war that could also hurt American businesses. Following this exploration of the intellectual property, Elizabeth Farnsworth discusses the issue with two industry experts.
ELIZABETH FARNSWORTH: This was the scene in Beijing last year right after an accord was reached between the United States and China on intellectual property. The Chinese had promised their factories would stop reproducing American software, videos, and compact discs without payment to the copyright owners. This crushing of CD's was China's signal that it would comply with that agreement. U.S. Trade Negotiator Charlene Barshefsky and Chinese Trade Minister Wu Yi toasted each other in Beijing, and in Washington, Special Trade Representative Mickey Kantor made the official announcement.
MICKEY KANTOR, U.S. Trade Representative: (February 1995) With today's important agreement, China has committed itself to put in place practices that will both protect our rights and normalize access to its market for U.S. products.
ELIZABETH FARNSWORTH: But yesterday, the White House said that there is new evidence that Chinese factories are continuing to produce pirated American products and the administration said it isconsidering imposing trade sanctions in retaliation, perhaps new tariffs that would cost China as much as $2 billion. The complaint was the latest incident in an increasingly strained relationship between the two countries. In recent months, there have been sharp exchanges over China's human rights record, shipments of weapons,and nuclear materials to Pakistan and Iran, and over China's efforts to intimidate Taiwan.
PRESIDENT CLINTON: Today I would like to announce a series of important decisions regarding the United States policy toward China.
ELIZABETH FARNSWORTH: And this strained atmosphere coincides with the annual renewal of Most Favored Nation trade treatment for China. A congressional vote on MFN is due next month. On the intellectual property issue, the administration's threat of sanctions brought counter threats from Beijing. Officials said China would retaliate against U.S. businesses if Washington imposed sanctions. President Clinton met with top advisers this afternoon to discuss the matter,and throughout the day, political figures spoke out.
MIKE McCURRY, White House Press Secretary: China is very aware that May 15th is the deadline that we have for taking action with respect to China's obligations related to international-intellectual property rights. We've made some progress in our discussions, and we've made some progress in their handling of these issues, but since the agreement has been signed with China,we still don't believe we're seeing the type of enforcement that's necessary to comply with our own concerns.
ELIZABETH FARNSWORTH: Other administration officials expressed hope sanctions could be avoided.
WARREN CHRISTOPHER, Secretary of State: With respect to the intellectual property issues, last year an important agreement was worked out between the United States and China. It's important at that meeting that that agreement be faithfully implemented. We've had discussions with, with the Chinese at this point, we're disappointed with, with compliance, but those discussions are on going.
ELIZABETH FARNSWORTH: And for Congress, there was support for strong action from the administration.
REP. NANCY PELOSI, (D) California: The piracy has worsened, so it's time enough is enough -- it's time for the talking to stop and forus to take some actions to protect our intellectual property.
ELIZABETH FARNSWORTH: The administration has given China until May 15th to respond to the complaints about piracy of intellectual property.