By  on April 26, 2007

The U.S. brushed aside remarks by Vice Premier Wu Yi of China, who said the filing of two complaints against China in the World Trade Organization for alleged breaches of global intellectual property rights rules will damage bilateral trade relations.

During a keynote speech in Beijing Tuesday, Yi told an international conference that the opening of WTO proceedings this month "will seriously undermine bilateral cooperation on intellectual property rights," according to the official news agency, Xinhua, and China Daily. The WTO move by the U.S. "flies in the face of the agreement between the two countries' leaders to propose dialogue as a way of settling disputes," Yi said.

However, the office of U.S. Trade Representative Susan Schwab suggested that the Bush administration would remain firm, and also stay open to negotiations.

"We will continue to encourage China to address our concerns about IPR enforcement through dialogue, but retain the right to pursue WTO consultations or dispute resolution on this issue," said a spokesman for Schwab. "This is the standard procedure for settling differences between mature trading partners."

The cases were filed after mounting public pressure on the administration by executives from U.S. companies adversely affected by the widespread counterfeiting and piracy infringements of U.S. products. According to U.S. Customs, China was the top source for intellectual property rights seizures of infringed products in the 2006 fiscal year and accounted for 81 percent of the domestic value seized, up from 69 percent the previous year. Of the $125.5 million in goods seized in 2006, footwear accounted for $63.4 million, or 41 percent, apparel totaled $24.3 million, or 16 percent, and handbags, wallets and backpacks accounted for 9 percent.

In its WTO complaint, the U.S. noted that contrary to global trade norms, Chinese customs authorities allow goods seized to be sold on the markets after fake labels and other infringing trademarks are removed.

Meanwhile, a report by the Paris-based International Chamber of Commerce and the Business Action to Stop Counterfeiting and Piracy — an umbrella group of major companies and brand owners — said huge seizures took place last week in the U.S., the European Union, China and Australia of luxury goods, apparel and footwear. The report said China has "banned the unauthorized sale of 20 international name brands" in more than 600 apparel and small merchandise markets in Shanghai.Moreover, the monitoring study noted that in January, Chinese reports said customs officials in Tianjin seized 10 containers that included counterfeit athletic shoes, shirts and leather belts of brands such as Lacoste, Levi's, Adidas, Nike, Puma and Reebok.

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