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China Trade War Finally Averted Clinton Hails 11th-Hour Deal, But U.S. Exporters Say Anti-Piracy Enforcement Key To Success

The Clinton administration on Sunday praised a last-minute agreement with China to avert a trade war between the two nations as a victory for U.S. exporters. But American businesses said the real benefits will come only if China enforces the deal.

President Clinton said the agreement by the Chinese would eliminate rampant piracy that has cost Americans thousands of jobs and more than $1 billion in high-value exports in such key U.S. industries as computer software, pharmaceuticals, chemicals, books, music and films.

“This is a strong agreement for American companies and American workers,” Clinton said in a written statement.

Because of the deal, U.S. trade representative Mickey Kantor said, the United States is withdrawing trade sanctions which would have imposed punitive 100 percent tariffs on $1.08 billion of Chinese products. Scheduled to take effect Sunday, they were the largest potential trade sanctions in U.S. history.

The United States suffered a $29.5 billion trade deficit with China last year, up 30 percent from the previous year and second only to America’s deficit with Japan.

For this reason, the administration views it as critical that China not only halt copyright piracy but also go much further to lower trade barriers to U.S. manufactured goods and farm products.

Kantor was flanked at a Washington news conference by more than a dozen representatives of American companies who have pushed the administration to take a tough line in the negotiations because of their losses from copyright piracy.

“This is not the end. It is a beginning,” said Jack Valenti, president of the Motion Picture Association, who said it is critical that the Chinese now enforce the agreements.

“Piracy must be rooted out and a climate established that is congenial to creators of intellectual property,” he said.

Robert Holleyman, president of the Business Software Alliance, said his industry views the agreement as critical because the rate of software piracy in China exceeds 98 percent.

“Although not a quick and easy remedy, the agreement reached today is an important milestone for all industries that rely on the protection of intellectual property,” he said.

Rep. Phil Crane, R-Ill., the head of the House Ways and Means trade subcommittee, also voiced support for the deal but said Congress will be closely monitoring enforcement by the Chinese.

The next big trade dispute between the United States and China is likely to be China’s request for membership in the World Trade Organization, the new organization created to govern trade.

Kantor said that, while China’s entry into the WTO was not directly linked to the piracy issue, the ability to reach an agreement on intellectual property “creates a better atmosphere” for U.S. consideration of the membership request.

He said that discussions with China over its WTO membership will proceed this year.

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