China warns U.S. piracy cases will harm trade tries

By Ben Blanchard

BEIJING (Reuters) - U.S. complaints to the WTO over commercial piracy in China will "badly damage" cooperation, Vice Premier Wu Yi warned on Tuesday, insisting that China has made great strides in protecting patents and copyrights.

Earlier this month, Washington launched two cases at the World Trade Organization claiming that Beijing was not doing enough to punish illegal copiers of films and music and that its restrictions on entertainment imports violated trade rules.

China denounced Washington's move and Wu, who heads the country's economic dialogue with Washington, bluntly warned that the complaints would bruise bilateral trade ties.

"The United States Trade Representative, the USTR, has totally ignored the massive strides China has made," Wu told an intellectual property forum in Beijing.

The U.S. action "flies in the face of the agreement between the two countries' leaders to propose dialogue as a way of settling disputes," Wu said, adding that never before had a WTO member simultaneously mounted two cases against another country.

"This will have an utterly negative impact and will inevitably badly damage bilateral intellectual property cooperation," she said, while also warning it would "harm" cooperation over market access issues.

"The Chinese government is extremely dissatisfied about this, but we will proactively respond according to the related WTO rules and see it through to the end," Wu added.

In Washington, U.S. trade officials defended their decision to launch the cases.

"We will continue to encourage China to address our concerns about IPR (intellectual property rights) enforcement through dialogue but retain the right to pursue WTO consultations or dispute resolution on this issue. This is the standard procedure for settling differences between mature trading partners," said Steve Norton, a spokesman for the U.S. Trade Representative's office.

"SPIDEY 3" ALREADY

Widespread bootlegging of films, music and software in China has long irked Washington, where many officials and ,lawmakers blame piracy for a portion of the massive U.S. trade deficit.

Underscoring the problem, DVDs claiming to contain the latest Hollywood blockbuster movie "Spider-Man 3" are already on sale on Beijing streets, almost two weeks before it officially hits the screens in the United States.

On Monday, China sought to demonstrate its determination to stop commercial piracy by releasing an intellectual property action plan.

It will draft and implement 14 laws on intellectual property rights and usage, and issue explanations and guiding policies for handling IP violation cases, according to a notice.

Wu defended China's record of combating piracy, pointing out that 988 people were arrested for IP infringement last year and that courts heard 6,441 IP cases.