China, Russia, others on U.S. piracy 'watch list'

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WASHINGTON -- China and Russia continue to lead the world in copyright theft, the top U.S. trade negotiator said Monday when she released an annual report on the state of intellectual property worldwide.

U.S. Trade Representative Susan Schwab named those two nations and 10 others to the "priority watch list" -- a designation that subjects the countries to closer scrutiny and could lead to trade cases before the World Trade Organization.

China already is subject to a pair of U.S. actions before the WTO, charging that country with unfairly raising trade barriers and failing to enforce its laws protecting American copyrights and patents.

In comments released with the report, Schwab spoke of the economic necessity of protecting American intellectual property.

"Innovation is the lifeblood of a dynamic economy here in the U.S. and around the world," Schwab said. "We must defend ideas, inventions and creativity from rip-off artists and thieves."

Despite the tough words, Monday's report outlines the continuing difficulty the U.S. has with enforcing its copyright obligations abroad. It's no secret that China and Russia have been leaders in copyright piracy for years, and despite administration efforts, little ever appears to get done about the problem.

"Today's report indicates the scope of global piracy and serves as a sobering reminder of the challenges ahead," MPAA chairman and CEO Dan Glickman said. "The strength and competitiveness of our economy is powered by our ideas and creativity."

While Glickman and other copyright industry executives praised the way the USTR and the administration are attacking the problem, they said the difficulty the White House is having is endemic to the problem.

"Unfortunately, despite this work, conditions in far too many countries work against the ability to invest in the creation and distribution of original recordings, thereby undermining economic progress and cultural diversity," RIAA executive vp Neil Turkewitz said. "Once again, Russia and China top this list."

The annual report, known as a "Special 301 Report" for the section of U.S. trade law that it covers, said China has a special stake in upgrading its protection of intellectual property rights given that its companies will be threatened by rampant copyright piracy as they increase their own innovation.

For Russia, the report said the U.S. will be closely watching to see how Moscow fulfills commitments it made to upgrading copyright protection as part of a U.S.-Russia accord reached last year -- a milestone in Russia's efforts to join the WTO.

In addition to Russia and China, the countries on the priority watch list are Argentina, Chile, Egypt, India, Israel, Lebanon, Thailand, Turkey, Ukraine and Venezuela.

Elevating Thailand to the priority watch list illustrates the concern the administration has on a range of issues, including a "deteriorating protection for patents and copyrights." Thailand is in a dispute with international drug companies including Abbott Laboratories of the U.S. over the cost of drugs to fight AIDS and other diseases.

The report also recognizes progress achieved by U.S. trading partners. Brazil and Belize have been moved from the priority list to the watch list, and five U.S. trading partners -- Bahamas, Bulgaria, Croatia, the European Union and Latvia -- were removed from the watch lists altogether.

The Associated Press contributed to this report.
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