China’s stained Trips record

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: After giving China a number of warnings for violating intellectual property rights (IPR), the US has finally asked the dispute settlement body (DSB) of the WTO to take action against China for infringing the Trade Related Aspects of Intellectual Property Rights (Trips) Agreement.

The WTO panel will formally investigate US complaints that China has failed to adequately protect IPR on goods such as software and movies, a move criticised by Beijing. WTO’s DSB on September 25 established a panel following Washington’s second request to look into its allegations against China. Findings from the inquiry would not be released until late 2008, a WTO official said.

The US is demanding that China get tougher on prosecuting those who breach copyright or trademarks and implement stronger laws on what happens to confiscated pirated material. Washington claims Beijing’s apparent failure to clamp down adequately on IPR violations has facilitated the growth of one of the world’s largest sources of pirated products, ranging from clothes and sporting goods to drugs, CDs and DVDs.

“The United States recognises that China has made the protection of IPR a priority, and that China has taken active steps to improve IPR protection and enforcement,” US trade official Dan Hunter told the DSB. “The fact remains, however, that bilateral discussions on specific matters described in the US panel request have not resulted in a mutually agreeable solution to our concerns.”

China hit back at the US panel request, describing it as “regrettable” that Washington had sought for the second time the panel’s establishment and vowing to defend its interests. China claims that it is making all efforts to protect the IPR of all concerned under the Trips agreement. Hence, the US should have waited before sending the second request for establishment of a panel to the DSB.

As allowed under WTO rules, China blocked Washington’s first request for a panel on August 31. WTO rules stipulate that a second request leads automatically to the establishment of a panel, unless the complainant withdraws its proposal. China alleges that the US is trying to impose obligations beyond the Trips agreement on developing countries. It also cited Trips provisions that the countries can determine appropriate methods of implementing the agreement within national legal frameworks.