EU gets testy with China


China and the European Union have agreed to set up a special panel that will look at ways to curb rampant Chinese piracy.

The panel, billed as a "high-level group," will hold its first meeting in March, and European officials warned that it will have to deliver results quickly if the EU is not to consider trade sanctions against Beijing.

The agreement, reached Wednesday at the 10th annual EU-China summit, came after a tense meeting in which the EU warned that Beijing's failure to clamp down on the escalating copying of DVDs and CDs is wearing European patience thin.

European Commission president Jose Manuel Barroso demanded that China remove the "artificial barriers" presented by copyright violations in order to enable EU businesses better access to trade with China. This is a key reason why EU exports to countries like Switzerland remained higher than those to China, Barroso said.

Chinese Premier Wen Jiabao responded by saying Beijing was "sincere and ambitious" in its efforts to protect intellectual property rights.

Hours before the leaders met, EU Trade Commissioner Peter Mandelson berated the Chinese government for failing to adequately protect the intellectual property rights of European companies. "China's push to become a high-tech producer will only succeed if the fight against intellectual property theft and counterfeiting can be won," he said.

Mandelson also warned that piracy has European business less confident about investing in China. "The problems continue to get worse, and the world — particularly China — is changing too fast to wait longer," he said. "The fake markets are cleaned out for a day, and then the traders creep back in. Our music and films are routinely stolen, and royalties are not paid."

The EU has held back from challenging China's limp intellectual property protection in the World Trade Organization, preferring to prioritize dialogue and cooperation instead. "But the sincerity of our approach is being tested," Mandelson warned.