Taiwan should stay on U.S. IPR list: expert

Speaking after testifying in front of the U.S.-China Economic and Security Review Commission (USCC) on Thursday, Smith said that while the government of President Chen Shui-bian has made some progress in tackling intellectual property crime, much remains to be done.

“Enforcement has improved, partially, but it’s not there yet,” he said.

While the final decision of whether Taiwan remains on the list will be made by the United States Trade Representative (USTR) on April 30, the IIPA’s recommendations, in general, are followed by USTR.

Smith, who will submit his recommendations to USTR on Feb. 13, described Taiwan’s continuing IPR problem as “perplexing.”

In the mid-90s “it was really looking good, then (Taiwan) let optical media production operations get completely out of control,” said Smith.

And, despite the passage of a new Copyright Law, the law was watered down at the last minute by the Legislature. The law is “deficient,” said Smith.

Pressing the government to pass copyright amendments is the No. 1 task that the IIPA is pursuing with Taiwan at the moment, to bring the laws up-to-date.

“We’re relatively optimistic they can do it after the election,” said Smith, as over the past year more night raids have been conducted on illegal CD and DVD burning operations. Yet, the ever adaptable criminal organizations, armed with the latest technology and increasingly selling their pirated goods online, are now operating smaller scale operations, that are harder to find and just as hard to regulate, according to Smith.

He also suspects some of the foot-dragging is a result of decision-makers in Taiwan not wanting to do what the U.S. wants them to do. “Don’t do it for us, do it for yourselves,” Smith urged. Taiwan needs to protect intellectual property rights for the sake of its domestic music and movie industries that have shrunk by 40 percent over the last 5 years, he said.

Ultimately, effective protection of intellectual property is “a political will issue.

“If you want to do it, it’s not that hard,” said Smith.

In related developments, though Taiwan has its own IPR problems to solve, the purpose of Thursday’s USCC hearing was to take a look at the mainland’s performance in the World Trade Organization (WTO), a picture that is of far greater concern to the U.S. administration.

Since entering the WTO on Dec. 31, 2001, one day before Taiwan, “China has made important headway,” Deputy Assistant U.S. Trade Representative (USTR) Charles W. Freeman III, told the commission.

Still, “China’s WTO compliance record falls short of the mark,” he said.

For this situation to change, the mainland government must open its agricultural markets, better enforce IPR, liberalize trading rights and distribution services, use fair and transparent standards and technical regulations, ensure the public has the right to comment on proposed measures, create national standards, including non-discriminatory taxation, and provide market access for U.S. goods and services, Freeman stressed.

“While we believe that China’s leadership is serious about economic reform and its WTO commitments, China still has a long way to go,” said James Jochum, assistant secretary of commerce for import administration.

“Clearly China needs to do better ... we’re not satisfied,” testified U.S. Deputy Assistant Secretary of State Randall Schriver. “We stand ready to use multilateral means, including WTO dispute settlement,” to ensure the mainland complies with its commitments, he said.

But, Richard Trumka, secretary-treasurer of the AFL-CIO, a federation of U.S. labor unions, representing more than 13 million Americans, has already lost patience with China and the country’s empty pledges to make good on its WTO commitments, as well as with the Bush administration for not getting tough on China. Trumka cited the growing multi-billion dollar U.S. trade deficit with China, the undervalued mainland currency and deteriorating worker rights and human rights in general in China, as just some of the reasons the U.S. government needs to put greater pressure on Beijing.

“We’re not playing by the same rules,” he said, and “the Bush administration needs to move beyond bilateral dialogue.” In terms of copyright piracy, “the market in China remains dominated by piracy,” with over 90 percent of product sold being illegal, Eric Smith told the commission. The level in Taiwan is around 40 percent in Taiwan, according to 2003 USTR data. As with Taiwan, the key failure in the mainland is a lack of enforcement, despite widely publicized seizures and destruction of pirated goods, according to Smith.

Though mainland authorities say they are “serious about reducing piracy ... the Chinese enforcement system has failed to significantly lower piracy levels in any significant way over the last 15 years since it passed a modern Copyright Law,” said Smith.

And, with mainland China yet to give full market access to the U.S. audio and audiovisual sectors, the resulting huge untapped market for illegal pirate operators to satisfy, and reap vast profits.

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