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US Calls on China, Russia to Combat Intellectual Property Theft

U.S. lawmakers, trade experts and business leaders are calling on China and Russia to take immediate steps to combat the widespread theft of trademarked U.S. products, including technology, music and movies. The U.S. trade office says it is considering filing a case against China at the World Trade Organization if Beijing does not do more to protect intellectual property rights.

Trade experts say China is the largest source of counterfeit and pirated products in the world and the problem is growing.

The Office of the U.S. Trade Representative says Beijing is failing to uphold its WTO obligations to combat the piracy of intellectual property, costing the U.S. economy billions of dollars every year.

At a congressional hearing in Washington, Acting Assistant U.S. Trade Representative Victoria Espinel said the agency is "frustrated" with China's approach to intellectual property theft, nearly four years after the country joined the World Trade Organization.

She says Chinese authorities are not enforcing intellectual property laws, and have done little to crack down on counterfeiters. So, she says the U.S. trade office is examining all of its options including international litigation.

"We are committed to ensuring that China is compliant with its obligations, and we will take WTO action if we determine this is the most effective way to fix the problem that we are resolved to fix," she said.

Ms. Espinel explains that a WTO case against China could result in tariff sanctions.

Trade experts testifying before the Congressional panel added that American companies who buy cheaper Chinese products often made with counterfeit parts, are fueling the problem.

Eric Smith, the president of the Intellectual Property Alliance, which represents 1300 American companies, says piracy and counterfeiting is not a victimless crime.

"There is no question that organized crime and terrorism and gun running and money laundering are all part of a piece. And it's growing, and until this becomes and urgent matter and a zero tolerance issue, its going to continue to grow because there is just too much money in this business," he added.

Lawmakers and trade experts say the United States must learn from mistakes made with China as Russia seeks entrance into the WTO.

Russia is second only to China in the selling and manufacturing of pirated materials worldwide. Ms. Espinel says U.S. trade officials are in active dialogue with the Russian government over the issue. She says Moscow faces tough repercussions if it fails to fight piracy.

"We have continuing concerns that Russia's current IP regime does not meet WTO requirements related to protection of undisclosed information, geographic indications and IP enforcement,” she noted. “We are raising these and other concerns in the accession negotiations, and have made it clear to the Russian government that progress on IP will be necessary to complete the accession progress."

Both lawmakers and private industry officials agreed that the United States cannot end global piracy alone. They say there is growing cooperation with countries like Japan, France and Britain, to fight intellectual property theft.