WASHINGTON — U.S. trade officials on Thursday said the Chinese government has taken steps to crack down on counterfeiting, but needs to do more to stop the sale of infringing goods on Alibaba’s Taobao online marketplace.
The U.S. Trade Representative’s office called on China to continue addressing concerns raised by U.S. companies as it released its 2015 Special 301 report, an intellectual property rights protection and enforcement assessment of U.S. trading partners. China was also once again placed on a “priority watch list” in the report and has been listed in the report every year since its inception in 1989.
“We’re pretty clear in our report about the fact that more needs to be done by the Chinese government in this area,” said a U.S. trade official, who spoke on the condition of anonymity on a press call with reporters.
Alibaba has been under intense scrutiny in the past several months for its business practices, most recently drawing attention from USTR and the U.S. Securities and Exchange Commission.
The American Apparel & Footwear Association filed complaints with the USTR and SEC earlier this month, claiming that counterfeiting is worsening on Taobao and noting that U.S. apparel and footwear brands are losing millions of dollars in sales as a result.
In the new report, USTR pointed to a Chinese State Administration for Industry and Commerce white paper that raised concerns about the sale of counterfeit products on Alibaba’s e-commerce platforms.
“While both the State Administration for Industry and Commerce and local [agencies] have called on online trading Web sites to improve procedures for removing listings of IPR-infringing goods, these measures have not significantly deterred repeat and large-scale offenders who quickly place new postings offering infringing goods soon after complying with takedown notices,” the USTR report stated. “In a welcome development, the SAIC published a report on IPR infringement and other concerns at the online sales platform Taobao.”
But USTR reiterated that the SAIC found that only about a third of the products offered on the site were authentic. The white paper was later retracted after Alibaba agreed to cooperate with the SAIC.
“The United States commends SAIC’s commitment to address this concern and urges Taobao to promptly address concerns identified in the report, consistent with the recommendations in the 2014 Notorious Markets List [another U.S. government watch list],” the report said.
Alibaba has defended itself against the criticism and outlined several measures it has taken to prevent counterfeiting and pirated goods from being offered or sold on its marketplaces. The U.S. trade official said the office received conflicting reports from stakeholders about Taobao.
“Some stakeholders we hear from are saying there has actually been an increased level of attention on Taobao’s platform,” the official said. “Other stakeholders, of course, have significant and various concerns, so we think the best way to do this is to continue to engage with the Chinese government, which we do note has already, as part of its SAIC report, [indicated] that they want to do more in this area, as well, and they are looking at it.”
The trade official said, “This is where China can exercise more enforcement authority through its criminal and administrative enforcement authorities, but ultimately this is an area that we encourage them to work collaboratively with the platform on to be able to have, again, a strong framework and also to allow legitimate commerce to flow.”
He also noted that the U.S.is highly engaged on the issue with Chinese officials.
“We have a range of agencies in the U.S. government that are actively pressing these issues and encouraging the Chinese government to continue to take action,” the official added. “That is going to be a priority issue for the United States government over the coming years.”