Point out China and Russia as violators.
In two back-to-back hearings May 17, House lawmakers called on the U.S. Trade Representative (USTR) to go to the mat with pirate nations China and Russia over lax copyright protection and enforcement.
Witnesses -- including officials of U.S. record and movie studios -- told lawmakers that piracy in the two countries is rampant and costing U.S. copyright industries billions of dollars in losses annually.
“We're stymied,” said Matt Gerson, senior VP, public policy and government relations, for the Universal Music Group. Gerson pointed out that infringement cases against Russian pirates usually result in “slap on the wrist” penalties or are even dismissed. He also said that both physical and hosted-server Internet piracy are huge problems.
Bilateral House leaders asked an official of the USTR for a timetable for trade options designed to force change in the countries' policies. Paramount among the options for the United States, the witnesses suggested, would be to bring a case against China before the World Trade Organization (WTO) of which it has been a member since 2000. Such a case would cite feeble enforcement and the lack of criminal penalties.
Officials echoed the comments of Eric Smith, president of the International Intellectual Property Alliance, that Russia “has a legacy of failed commitments” in copyright protection and is rife with corruption. Gerson and Smith recommended trade sanctions, denial of U.S. most-favored-nation trade benefits and conditioning upcoming Russian membership to the WTO on effective copyright enforcement. He and others also believe the United States must work with Japan and European nations on the piracy in both countries.
In April, the USTR placed China on its priority watch list, reserved for nations with the most egregious intellectual property piracy and toothless enforcement. Russia was once again placed on the list -- for the ninth time.
Chairman Lamar Smith showed some impatience with USTR's response that the trade agency is “looking” at various options, such as a possible WTO action.
“I think instead of 'looking' we should be 'acting,'” Smith told Victoria Espinel, acting assistant U.S. Trade Representative. Espinel said she agreed with other witnesses that the United States should focus on preparing a WTO action in six months. Witnesses suggested the USTR initiate a second out-of-cycle review of China's anti-piracy policies this year.
The trade deficit with China has become a political issue. From nearly zero in the 1980s, it now stands at $103 billion last year. President Bush also discussed intellectual property piracy in Russia at the most recent summit in Moscow with Russian prime minister Vladimir Putin.