The Rules Apply to China, Too : Flagrant trade violations jeopardize its status in world community

Two years ago, in a dispute over intellectual property rights, the United States and China wrestled to the brink of a trade war. At the ultimate hour, agreement was reached that averted a costly and inevitably embittering round of reciprocal trade blows. Now a new deadline--Saturday--looms in the continuing dispute over China’s tolerance for the pirating of a wide range of American products.

A last-minute move toward a settlement is always possible. But the chances grow by the hour that Washington will be left no choice but to impose punitive measures. It shouldn’t shrink from that necessity. There’s no question that Chinese counterfeiting of U.S. goods robs American companies of tens of millions of dollars in royalties each year. Official Chinese laxity in trying to stamp out these activities is also apparent. China eagerly seeks acceptance as a full member of the world trading and economic community. A key qualification is that it play by the rules.

Last year, Beijing says, it showed its sincerity for protecting copyrights by seizing more than 1.5 million pirated books and 2.2 million laser discs. Yes, responds Mickey Kantor, the U.S. trade representative, but while this was going on nearly 30 other factories known to American officials were churning out 75 million counterfeit discs, mostly for the export market. Dens of piracy that U.S. officials can pinpoint surely are known to Chinese authorities.

The most likely targets for punitive U.S. tariffs of up to 100% are Chinese electronics, furniture and ceramics. China says it would retaliate by limiting imports of American alcohol, cigarettes, music and cosmetics. Despite that threat, many American companies doing business in China support tough U.S. action.

Last year the Clinton Administration was forced to drop its misconceived effort to link trade issues with human rights in China. This time it’s right and should stand firm. The timing of this latest controversy is unfortunate, with maximum leader Deng Xiao- ping reputedly on his deathbed and a possible power struggle looming. But the principle on which Washington stands is absolutely sound. Intellectual property rights must be protected. That’s the rule and China must respect it.