The Bush administration is close to filing a formal complaint against China at the World Trade Organization, saying that China has failed to prosecute most of the people involved in selling bootlegged copies of American music and movies. Many people within the business and entertainment industries are growing impatient with the lack of movement against China, and the United States is finally prepared to take action.
China, however, has argued that is working to stem piracy. On March 26 of this year, China's National Anti-Piracy and Pornography Office said that it had raided a facility in Guangzhou and seized about 1.6 million copies of pirated movies and television shows, and earlier this week, the Chinese Embassy declared that China's Supreme Court had lowered the threshold under which people can be charged with criminal piracy. Prior to this new law, administrative penalties could be imposed only if an individual had 1,000 illegally copied DVDs, but that number is now 500. However, China's actions are likely to not be enough, as it is still far too easy to buy and sell pirated copies of movies and music.
According to lobby groups representing Microsoft Corp., Walt Disney Co., and Vivendi SA, China's illegal copying cost companies $2.2 billion in sales in 2006. Also in that year, China's trade surplus against the United States reached a record $232.5 billion, and US lawmakers blamed that on both the rising value of the yuan and on Chinese piracy.
There will likely be two complaints filed against China. One will address the lack of prosecution of bootleggers, and the second will address expanding the market in China for American products. WTO procedures will require the United States to formally ask for consultations with China, and after 60 days it will be able to ask for an independent panel to adjudicate the dispute. It is still unclear whether or not the World Trade Organization will side with the United States in this matter and if it does, what punishments it will allow against China.
