The U.S. government filed a complaint against China at the World Trade Organization on April 10 over China's lax enforcement of intellectual property rights. The U.S. move is not the least bit surprising.

To cease being a paradise of product piracy, China should thoroughly enforce regulations to protect intellectual property rights.

Illegally copied DVDs and CDs of copyrighted movies and music are widely produced and sold in China. The motion picture and recording industries are economic powerhouses in the United States. The trade in illegally copied products amounts to 65 trillion yen annually worldwide, and most of the pirated merchandise is believed to be made in China.

After joining the WTO in 2001, China strengthened its policies to protect intellectual property rights, cracking down on pirated products and increasing criminal penalties.

In reality, however, the nation's regional governments are lax in enforcing regulations on pirated products, letting them proliferate throughout the country.

This is indicative of Chinese society's tendency to skirt copyright laws. The filing of the complaint with the WTO by the United States shows its dissatisfaction with China's stance.

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Protectionist mood in U.S.

At the end of last year, the administration of U.S. President George W. Bush launched a U.S.-China strategic economic dialogue, to try to solve trade issues with China with an amicable approach. However, protectionism has prevailed in the U.S. Congress and in many industries, as irritation mounts over the soaring U.S. trade deficit with China as well as the delays in reforming the yuan's exchange rate.

In February, the U.S. government filed a complaint with the WTO over Chinese export subsidy programs, saying they unfairly harmed U.S. companies. Also, in March, the United States decided to impose countervailing duties on imports of coated paper from China. This series of actions indicates the United States is taking a tougher stance toward China.

Following the filing of the complaint over intellectual property rights, trade negotiators from the United States and China will try to resolve the dispute within a 60-day consultation period. If that fails, a hearing would be convened, judged by a WTO panel. If the panel accepts the U.S. complaint, it will recommend China make changes to improve the situation.

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Restrained approach

The fact that the United States did not rush to take a unilateral approach by imposing sanctions based on its domestic law and instead is trying to resolve the dispute at the WTO may indicate restraint on the part of the U.S. government.

We hope the WTO's proceedings succeed in resolving the dispute.

Japan is also affected by Chinese pirated items such as illegally copied animated films and TV programs, game software and even automobile parts. The annual loss to Japanese companies due to pirated products are said to reach more than 9 trillion yen.

Along with the European Union, the Japanese government is weighing whether to join the WTO dispute between the United States and China as a third party. Japan should urge China to improve the situation, in the hope that the idea of safeguarding intellectual property rights would catch on in Chinese society.

Meanwhile, Japan has dispatched a mission to China comprising intellectual property specialists from both public and private sectors, to advise the Chinese on the issues involved, including development of legislation as well as fostering specialists on preventing product piracy. It is also important to continue such patient support.

Other nations should strengthen their crackdown at the border, aiming to ensure that Chinese pirated products do not spread throughout the world via Asian countries.

China is enjoying continuing high growth, so its trade surplus has been expanding. China must take appropriate action in accordance with its responsibility to support the multilateral trading system.