US-China Trade Collision Course Looks Avoidable

WITH their trade developing rapidly in recent years, the United States and China have nevertheless been on a collision course of late.

As the latest dispute dragged out this week - China's alleged $1 billion annual theft of US patents and trademarks - US trade negotiators say the last-minute effort by China to avoid a crash is no exception. Beijing had been characteristically slow to respond to US charges of piracy of American-made computer software, music, movies. The US considers this a severe infringement on its intellectual property rights.

Earlier this month, US Trade Representative [USTR] Mickey Kantor told his Chinese counterpart that a failure to arrest this illegal practice would result in more than $1 billion in punitive tariffs on Chinese exports. The deadline for Chinese compliance was set for Feb. 26, and last-minute negotiations have been tense. With just days left before sanctions take hold, Beijing is trying to show new resolve.

`There are signs coming out of China on this issue that we welcome,'' an optimistic Ambassador Kantor said at a Monitor breakfast earlier this week. ``One is that they've increased the raids on the factories in China that produce these pirated CDs and [laser discs]. That has not happened before.''

Other indicators are China's invitation to Deputy USTR Charlene Barshefsky to meet with its vice trade minister, Sun Zhenyu, and what Kantor calls ``measured comments by Chinese officials about these talks. There's not been the usual negotiating sabre-rattling going on.''

The welfare of American businesses and consumers is of paramount concern, Kantor says.

When he drew up the list of Chinese products subject to 100 percent punitive tariffs, Kantor says, he made sure that small and midsized businesses would not be adversely impacted by the higher-priced imports and that there will be ``no hardship of any kind on consumers in the US.'' He carefully chose ``goods where Chinese state enterprises were involved,'' and ``only chose products where there were substitutes, especially made by American workers.''

By focusing on China's future growth industries, the US threatens to send a stinging message to Beijing that Washington is ``quite capable of disrupting the ongoing Chinese economic transformation,'' says University of Michigan's Kenneth DeWoskin.

Even if China agrees to all of the US demands, American firms are still vulnerable to other violations around the globe. While China is the biggest pirate of US copyrights, there should be a host of other countries on the watch list, according to the Washington-based International Intellectual Property Alliance, a group representing American moviemakers, publishers, recording artists, and other producers of original work.

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