US may file WTO case vs China over counterfeits

SHANGHAI - The United States may bring a World Trade Organization case against China over rampant counterfeiting in the country, but prefers to resolve such issues directly with Beijing, a senior US official said yesterday.

Franklin Lavin, US Under Secretary of Commerce for International Trade, said Washington continued to favor cooperation with China to help it tackle intellectual property theft.

"If there are cases where that's not successful, then the WTO is a mechanism we can pursue," Lavin told a press briefing.

"We are looking at possible WTO cases...Our attorneys are increasingly convinced that China is in violation, but we've got to have an evidentiary basis that ensures we're going to win the case."

Washington believes Beijing could open the door to billions of dollars of increased US exports through tougher enforcement of laws on piracy and counterfeiting, which cost US businesses an estimated US$250 billion annually.

US trade officials said last month that Washington could file two more cases against China at the WTO by early 2007 if Beijing did not respond to US concerns about piracy and honor commitments to open up its banking and insurance sectors.

Action by China on piracy could help to reduce tension over the size of the US trade gap with China, which reached US$202 billion in 2005, Lavin added.

"If the markets are fair, then I think people are a little less sensitive to whether there's a surplus or a deficit."

- REUTERS