The first-ever U.S. piracy czar demanded here Sept. 14 that officials show tangible results from ramped up efforts to crush the counterfeiting of films, drugs and clothes, and said he had the backing
BEIJING (The Hollywood Reporter) -- The first-ever U.S. piracy czar demanded here Sept. 14 that officials show tangible results from ramped up efforts to crush the counterfeiting of films, drugs and clothes, and said he had the backing of both Congress and big business.
Chris Israel, a former Time Warner public policy executive, said he met with China's Ministry of Commerce to explain his role as the U.S. Coordinator of Intellectual Property Enforcement, a post created in July by President Bush.
Chinese President Hu Jintao on Sept. 13 promised Bush that he would work to ease trade friction with Washington, including taking steps to prevent the perennial sticking point of piracy of intellectual property.
With a $2 million appropriation through September 2006 to back him, America's new IP cop chose China as his first trip abroad because of Washington's continued frustration with the flood of counterfeit products from China -- the source of about 70% of fakes that enter the United States, government estimates show.
"Coming to China early and often will quite likely be a critical part of my new job," Israel said, telling reporters he would be back as soon as November for an IP roundtable at the U.S. Embassy here and the next session of high-level U.S.-China trade talks, called the Joint Commission on Commerce and Trade.
President Bush is also due to visit China in November.
Israel said he will add his voice to U.S. demands that China arrest more pirates and try a greater number as criminals, leaving fewer to escape effective punishment in an administrative system whose nominal fines often are absorbed "as a cost of doing business for criminal enterprises that engage in piracy."
Israel said he, U.S. Trade Representative Rob Portman and a growing number in Congress are focused on China's adherence to the terms of its 1999 accession to the World Trade Organization.
"We take China's living up to that commitment very seriously, and the U.S.T.R. is in the process of exploring some of its options," Israel said.
Though Portman has said he is considering filing a complaint against China at the WTO, Israel told reporters in Beijing that he saw some progress in China's moves toward IP enforcement at the national level. Still, enforcement is thin in many local jurisdictions, he said.
"It gets very complicated at the local level, which we saw firsthand in Shenzhen," Israel said, referring to a southern industrial boomtown just north of Hong Kong where he met the vice mayor. "Three hundred yards away was a mall selling counterfeit sporting goods."
"There is a disconnect between those who are focused on this issue and the ability to effect enforcement on the ground," he said, adding that a host of U.S. agencies, from Customs to the FBI, were "ready, willing and able to cooperate with Chinese law enforcement officials."
In a visible case of such intergovernmental cooperation in March, two Americans and three Chinese were tried and sentenced in Shanghai to up to three years in prison for selling pirated DVDs online.
Fake DVD movies are China's most visible example of piracy, available on nearly every street in most major cities.
Hollywood studios estimate they lost $280 million in potential revenue last year in China to IP violations, a fraction of the estimated $250 billion U.S. companies in all industries lose annually.
"To me it's one of the most evident and obvious concerns and problems," Israel said. "Therefore, we have been making the case to the Chinese [that] it would carry a lot of weight with respect to the United States if there would be a concerted effort around [DVD piracy], because it is seemingly an easy and straightforward problem to address."
China's 1.3 billion people earn less than $1,000 a year on average and many opt to buy readily available illegal DVDs for $1 each over tickets to the nation's relatively few movie theaters. Those tickets can cost as much as $7 in Beijing.
"I don't think you can pay disproportionate attention to any industry when it comes to this topic," Israel said.