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Last Updated: Tuesday, 10 April 2007, 12:20 GMT 13:20 UK
China slams US piracy complaint
Chinese vendor of counterfeit bags
China is one of the world's largest producers of counterfeit goods
China has criticised the US over its decision to file a formal complaint with the World Trade Organization over copyright piracy and counterfeiting.

The US says that China's failure to enforce copyright laws is costing software, music and book publishers billions of dollars in lost sales.

The US also argues that China makes it hard for legitimate firms to operate.

China "expressed great regret and strong dissatisfaction at the decision", the state news agency said.

Tighter enforcement

The Xinhua news agency quoted Intellectual Property Office commissioner Tian Lipu as saying that it was "not a sensible move for the US government to file such a complaint" at the World Trade Organization (WTO).

"By doing so, the US has ignored the Chinese government's immense efforts and great achievements in strengthening intellectual property rights protection and tightening enforcement of its copyright laws," the commissioner added.

Excessively high legal thresholds for launching criminal prosecutions offer a safe harbor for pirates and counterfeiters
US Trade Representative

On Monday, the US trade representative Susan Schwab said that piracy and counterfeiting levels in China remained unacceptably high.

The US said that despite China's promises to crackdown on fake software, DVDs, luxury goods, car parts and shoes, many of the goods were still widely available throughout the country.

China is one of the world's largest producers of counterfeit products, ranging from designer clothes, to pirated films and music, to luggage.

Many of the goods find their way into Europe and are knowingly bought as fakes by shoppers at markets and from street vendors. Firms claim that the poor quality copies dent their brand and divert profits and potenital clients.

'Criminal sanction'

The US has been threatening a WTO complaint against China since 2005.

It said on Tuesday that the two cases had been submitted to the WTO.

One case claims that Beijing's poor enforcement of copyright and trademark protections violates WTO rules. The other contends that illegal barriers to hamper sales of US films, music and books.

"Excessively high legal thresholds for launching criminal prosecutions offer a safe harbor for pirates and counterfeiters," the US said.

"Pirates and counterfeiters who structure their operations to fit below those thresholds face no possibility of criminal sanction."

A 60-day consultation period follows for negotiators to try to resolve the disagreements. Should this fail, then a WTO panel would rule on the case.

Implications of the copyright row

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