U.S. targets China, Russia, 7 other nations on copyrights

WASHINGTON -- The Bush administration is accusing China, Russia and seven other nations of failing to protect American producers of movies, computer software and other copyrighted material from widespread piracy.

The administration on Friday placed the nine countries on a "priority watch list" that will subject them to extra scrutiny and could eventually lead to economic sanctions -- if the administration decides to pursue complaints before the World Trade Organization.

In addition to China and Russia, the other seven countries targeted were Argentina, Chile, India, Israel, Pakistan, Thailand and Venezuela.

The administration named another 31 countries to a lower-level watch list, indicating it has concerns about copyright violations in those nations but they don't warrant the highest level of scrutiny.

Because of improvements in their efforts to protect U.S. intellectual property rights, four countries -- Egypt, Lebanon, Turkey and Ukraine -- were taken off the "priority" list where they were last year and placed on the lower-level watch list.

While business groups praised the report, Oxfam, the international aid organization, criticized the document for targeting Thailand and India for their policies of making low-cost generic drugs available to poor people to battle HIV-AIDS and other diseases.

Rohit Malpani, an Oxfam policy adviser, said that 80 percent of the generic drugs used in developing nations to combat AIDS were manufactured in India while Thailand is supplying generic drugs to poor people in that country.

"Thailand is reducing the costs of key medicines to treat AIDS, cancer and heart disease and India has become the pharmacy for the developing world. What the administration is doing is completely inappropriate," he said, arguing that both countries have the right to do what they are doing under global trade rules.

Under rules supported by the WTO, countries can issue so-called compulsory licenses to disregard patent rights, but only after negotiating with the patent owners and paying them adequate compensation. If they declare a public health emergency, governments can skip the negotiating.

In releasing the annual report, which is required by Congress, U.S. Trade Representative Susan Schwab said copyright piracy is "one of the central challenges facing the global economy."

"Pirates and counterfeiters don't just steal ideas, they steal jobs and too often they threaten our health and safety," she said in a statement.

This year's report devoted attention to what it described as the growing problem of counterfeited pharmaceuticals and other products that threaten the health and safety of consumers worldwide.

Stan McCoy, assistant U.S. trade representative for intellectual property, told reporters in a briefing that both China and Russia had made improvements in protecting intellectual property over the past year but that a number of issues remain.

The United States has a WTO case pending against China in which it has accused the country of doing too little to crack down on rampant piracy of American music, movies, computer programs and other products.

Discussions between the United States and Russia over improving copyright protections have been a key sticking point in negotiations over that country's bid to become a member of the WTO, the Geneva-based organization that regulates world trade.

Business groups praised the administration's new report with the Copyright Alliance, a coalition of industry groups, saying stronger efforts were needed to attack global piracy, which it estimated was costing the U.S. economy $58 billion a year and nearly 375,000 lost jobs.

Neil Turkewitz, executive vice president of the Recording Industry Association of America, said the report "has identified some of the most notorious marketplaces for the sale or distribution" of pirated material, including street markets in the Czech Republic, Mexico and Argentina and Internet sites in Russia and China.

Robert Holleyman, president of the Business Software Alliance, said piracy remained the software industry's biggest trade barrier, costing nearly $40 billion a year.