The nation's top trade negotiator pushed China to do more to prevent copyright piracy and sent a warning to Russia that its behavior toward pirates needs to change, but his efforts fell far short of t


WASHINGTON, D.C. (The Hollywood Reporter) -- The nation's top trade negotiator pushed China to do more to prevent copyright piracy and sent a warning to Russia that its behavior toward pirates needs to change, but his efforts fell far short of the tough measures sought by the intellectual property industries.

The administration said it was putting China and 13 other nations on a priority watch list, which subjects the countries to special reviews of their efforts to deal with the theft of such U.S. copyrighted material as movies, music and computer software.

"China must take action to address rampant piracy and counterfeiting, including increasing the number of criminal [intellectual property rights] cases and further opening its market to legitimate copyright and other goods," acting U.S. Trade Representative Peter Allgeier said April 29.

In its report, the USTR said that China was being elevated to the priority watch list because of serious concerns about piracy and counterfeiting rates that remain at extremely high levels because of China's inadequate enforcement system.

By some estimates, 90% of the movies, music and computer programs sold in China are pirated products. The U.S. industry has estimated it is losing $200 billion-$250 billion annually because of copyright piracy worldwide, an enormous sum but still well below the record $666 billion current account trade deficit the country recorded last year.

Although copyright industry officials said the USTR's action was a good step, many industry executives think it didn't go far enough.

"Without question, [the] report makes it abundantly clear that issues of intellectual property rights are front and center in U.S. engagement with China," Recording Industry Assn. of America executive VP International Neil Turkewitz said. "While we had proposed that consultations with China be initiated immediately in the World Trade Organization for China's manifest failure to provide the kind of criminal enforcement contemplated by [the Trade Related Aspects of Intellectual Property Rights Agreement], we are nevertheless supportive of the efforts announced [April 29]."

This year, the International Intellectual Property Alliance asked the USTR to immediately begin the consultations, which are the first step in bringing a case before the World Trade Organization. The Motion Picture Assn. of America and the Recording Industry Assn. of America are IIPA members.

Besides China, the others put on the priority watch list were Argentina, Brazil, Egypt, India, Indonesia, Israel, Kuwait, Lebanon, Pakistan, the Philippines, Russia, Turkey and Venezuela.

"The fact is we need strong, effective action to combat the rampant intellectual property piracy in Russia and China," MPAA president/CEO Dan Glickman said.

In February, the IIPA asked the USTR to take decisive steps to force Moscow to curb copyright piracy in Russia.

"It is unfortunate that, despite the Russian government's wholly inadequate response to the massive piracy that is taking place in that country, the USTR has decided not to identify Russia as a Special 301 Priority Country this year," Glickman said. "The situation in Russia is bad and getting worse. We need the strongest possible action, including the possibility of keeping Russia out of the WTO, until the rampant theft of intellectual property is addressed in a meaningful way by the Russian government."

The IIPA estimates that bootleg software, movies, music and other works account for about 80% of all intellectual property sold in Russia last year. The annual price tag for piracy there runs about $1.7 billion, and Russia is becoming a major exporter of illicit copyrighted material, the IIPA said.

In its submissions to the USTR, the IIPA asked the government to end Russia's Generalized System of Preferences status. The GSP allows a country to escape many tariffs and other trade limitations. Those pleas of the copyright industries appear to have fallen upon deaf ears, however, as sources with knowledge of the USTR's findings say both recommendations were rejected.