Battle Over Piracy Could Escalate To All-Out Trade War With China U.S. Threatens Sanctions If China Doesn’t Help Stop Copyright Infringements

The United States and China moved closer to an all-out trade war Saturday, although U.S. officials said they hoped that one last negotiating effort would be made before a Feb. 4 deadline.

Officials in both countries said that nine days of talks aimed at halting the piracy of American computer software, music and movies ended Saturday in Beijing without a final agreement.

U.S. Trade Representative Mickey Kantor told reporters that he had invited the Chinese to send a delegation to Washington next week for one final attempt to resolve the issue. He said he had not yet received word whether they would accept the invitation.

If the Feb. 4 deadline arrives without an agreement, Kantor said the administration would issue a final list of Chinese products which would be hit by punitive tariffs of 100 percent.

A month ago, the United States published a list of $2.8 billion worth of products, ranging from electronic goods to toys, from which the final target list of about $1 billion would be drawn. Kantor said the tariffs would take effect within a matter of days.

The Chinese have warned that if the United States does impose punitive tariffs, they are prepared to retaliate with trade sanctions against U.S. companies, triggering a fullfledged trade war between two of the world’s largest trading partners.

The United States has charged that American producers of computer programs, music CDs and movies are losing more than $1 billion annually from rampant piracy.

Kantor said that talks in Beijing broke down because the Chinese had failed to “demonstrate the will to take decisive action.”

However, China blamed the United States for the failure of the talks. Chinese negotiators “made ultimate efforts and showed considerable flexibility,” China’s state-run news agency reported.

U.S. negotiators made new demands as the talks were about to end that went “beyond the scope of intellectual property,” the Xinhua News Agency said.

Kantor told reporters during a telephone conference call Saturday that the discussions had resulted in some limited progress. But he said that more needed to be done in the areas of enhanced protection for trademarks, providing unimpeded access for American companies to sue violators in Chinese courts, establishing an improved verification system for copyrights and eliminating the purchase of pirated computer software by the Chinese government.

The latest round of talks began Jan. 18 in an effort to avert a trade war between two of the world’s largest trading partners.

Negotiators had been under pressure to wrap up the talks soon because China’s most important holiday, the lunar new year, is Tuesday.

“We don’t want to see a trade war,” Xinhua quoted an unidentified Ministry of Foreign Trade and Economic Cooperation spokesman as saying.

The official said China believes it is important to protect intellectual property rights. But he repeated China’s warning that it would not be pressured, saying China would immediately retaliate if trade sanctions are applied by the United States.

U.S. negotiators want China to close 29 factories in southern China producing 70 million pirated compact discs, laser discs and computer discs every year.

They also want China to allow more imports of American-made films, music and computer products in order to reduce demand for pirated copies.

China has claimed it has made significant progress in protecting intellectual property rights, but U.S. negotiators have said its enforcement of laws to protect these rights has been inadequate.