China’s Software Copyright Law Seen as Inadequate
New Chinese rules restricting piracy of computer software fall far short of the level of protection needed to head off imposition of punitive U.S. tariffs, a senior American trade official said here Saturday.
Under a new copyright law, computer software will for the first time receive some limited protection in China. But implementing regulations, which take effect Oct. 1, provide protection for foreign software only if it is registered in China within 30 days of publication outside the country. Programs already on the market are not protected.
“Clearly we have a great deal of concern that this degree of protection is not up to international standards,” Assistant U.S. Trade Representative Joseph Massey said at a news conference. “Caution and prudence would be appropriate watchwords for anyone seeking genuine protection.”
In April, China was put on a watch list of countries whose protection of intellectual property rights was inadequate. Under terms of the Special 301 Provision of the 1988 Trade Act, the U.S. trade representative’s office then began a six-month investigation of China’s practices in protecting copyrights, patents, trademarks and computer software.
U.S. private-sector estimates place the annual loss in U.S. computer software sales to China because of piracy at more than $400 million.
China has until Nov. 26 to address the U.S. concerns or face the likelihood of punitive tariffs against a variety of goods. Such tariffs would be intended to cause a drop in Chinese sales to the United States equal to the damage suffered in lost sales to China by U.S. copyright holders.
The United States ran a $10.4-billion deficit in its 1990 trade with China, partly as a result of such practices as computer software piracy and various Chinese import restrictions.
Complaints over Chinese practices form part of the background for congressional debate over whether conditions should be attached to renewal of China’s most-favored-nation trade status, which allows it to trade under terms as favorable as those granted to whatever countries have the best trading terms with the United States.
The Bush Administration has taken the position that unfair Chinese trade practices should be dealt with through direct negotiations and measures such as the 1988 Trade Act provisions, rather than an across-the-board cutoff of normal trade with China.
Massey said that during his talks in Beijing, his negotiating team also pressed China to reduce “prohibitive tariffs” and to increase the “transparency” of its foreign trade laws.
The United States remains “deeply concerned about the degree of protection that would be afforded software,” Massey said. “The protection afforded under the regulations does not extend to already published works, and we will in our negotiations have to address and remedy that.”
Chinese officials have been invited to Washington in August for further talks on the dispute.
“The closer we approach Nov. 26 without significant improvement, the greater the possibility of an outcome that we wish to avoid,” Massey said. “Our objective is . . . to promote an expansion of trade rather than a restriction of trade.”
Massey expressed some optimism, however, that China may take further steps to improve protection of intellectual property, noting that Beijing has expressed its intent to join the main international copyright conventions. Chinese officials also told him that China will in the relatively near future enact an unfair competition law to protect trade secrets, he said.
