EU might join WTO China suit


BRUSSELS -- In what could represent an about face in EU policy, EU trade commissioner Peter Mandelson said Thursday that he has not ruled out joining the U.S. in its World Trade Organization suit against China over counterfeiting and piracy.

The warning came a week after his commission colleague, audiovisual and media commissioner Viviane Reding, had suggested the EU would not take part in such an action against the flood of pirated movies, music and software originating from China.

Mandelson said that China has a poor record when it comes to protecting intellectual property rights and warned that the EU could follow in Washington's footsteps with its own case at the Geneva-based WTO.

"If dialogue doesn't work, there are other instruments at our disposal, including the initiation of WTO cases. I do not rule out initiating or joining action at the WTO if in our view China is failing to take its responsibilities seriously," he said. "China has agreed to protect IPR. It did so when it joined the WTO and, despite considerable efforts by the Chinese government, IPR protection in China remains patchy and uneven."

Any decision by the EC -- the EU's executive authority -- to join the U.S. suit would be initiated by Mandelson, not Reding, though it would have to be backed by the EC's 27 members. EU officials tried to play down the apparent dissonance between the two commissioners, but Mandelson's comments suggest either a turnaround in Brussels' handling of Chinese piracy, or that Reding was speaking out of turn.

The argument, ironically, pits both commissioners in unlikely positions. Mandelson instinctively believes that free trade is the best guarantee for economic well-being across the globe, yet he is flirting with interventionist measures to deal with China. At the same time, Reding has been a passionate defender of quotas and subsidies for European filmmakers and television, but is now advocating a more hands-off approach to Beijing.

China is the fourth-biggest supplier to Europe of pirated DVDs and CDs -- after Thailand, Malaysia and Pakistan -- accounting for 8% of seizures.

Earlier this month, Washington sought consultations with Beijing over piracy and blocked access for U.S. films, music and software. Despite a number of crackdowns by the Chinese government, counterfeit goods are still widely available in the country.

U.S. movie, music and other intellectual property-based companies say they lost more than $2.6 billion in China last year because of pirates, who control as much as 90% of the market.