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April 9, 2007 at 12:51 PM

More trade actions with China

MANUEL BALCE CENETA/AP

U.S. Trade Representative Susan Schwab holds a pirated DVD copy of “Night at the Museum,” a couple of weeks before the DVD is scheduled to be released on April 24.

On the heels of a Commerce Department decision to impose punitive duties on Chinese paper imports, the Bush administration announced today it would file two new cases against China with the World Trade Organization.

The WTO complaints focuses on poor enforcement of intellectual property rights in China that has allowed rampant piracy of movies, music, books, software and pharmaceuticals.

China has set “excessively high thresholds for launching criminal prosecutions” against distributors of pirated products, the first complaint states. The second complaint challenges a policy that allows only state-owned importers to distribute foreign books, DVDs and other items, creating a bottleneck that encourages piracy.

“This is more than a handbag here or logo item there; it is often theft on a grand scale” said U.S. Trade Representative Susan Schwab.

The action sets in motion a 60-day period in which trade officials from the U.S. and China will try to resolve the disputes. It also raises tensions in an already anxious political climate.

The precarious but hugely important U.S.-China trade relationship was the subject of a major speech last week by Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. The Washington State China Relations Council has a good analysis of the speech here, saying his “tough love” approach and engaging China in a “dialog of the possible” represent the best policy option in the current environment.

Economists from Stanford University’s Center for International Development have taken a contrarian perspective that the U.S. actually benefits from the trade deficit with China. Read their paper here.

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