Targets Russia, China.

The United States has told Russia and China that they must step up enforcement against rampant piracy of intellectual property -- or face serious trade penalties.

The mounting frustration over the $4 billion in annual losses of U.S. copyright industries in those two countries is prompting increased attention from trade officials, Congress and now the White House, through the Department of Commerce.

Secretary of Commerce Carlos M. Gutierrez traveled to St. Petersburg, Russia, and Moscow and then to Beijing between May 28 and June 4 to discuss the Bush administration's fair trade agenda. He delivered the blunt message that the United States will no longer tolerate lax intellectual property enforcement.

"Ten years ago, we had a lot of educating of members to do," says Neil Turkewitz, executive VP of international for the Recording Industry Assn. of America. "Now everybody knows what's at stake." The record industry alone estimates that it lost $412 million in Russia and $202 million in China.

A Chinese government spokesman admits the piracy problem in China is huge but says that the government is cracking down on infringers.

Liu Guoxiong, president of Beijing-based, government-controlled rights body China Audio-Video Assn., said via an interpreter that government agencies, helped by the CAVA, have been conducting raids against the more than 100,000 shops selling audio and video products in the country, many of them selling only pirated goods.

"Unfortunately, as soon as you close these shops, others open for business," he says. "What we do is to keep them under pressure."

Additional reporting by Emmanuel Legrand in London.

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