U.S.-China Accord Averts Trade War at Last Minute Pact Would Protect `Intellectual Property'

Article excerpt

After all-night talks, U.S. and Chinese negotiators reached a tentative agreement early Sunday, narrowly averting a trade war.

Charlene Barshefsky, deputy U.S. trade representative, said, "The agreement has not yet been signed, but all indications at this juncture are that it will be a broad-ranging and highly detailed agreement on strict enforcement of U.S. intellectual property rights as well as market access for U.S. companies and legitimate copyright works."

The 20-page, single-spaced enforcement plan calls on the Chinese government to inspect over the next three months every one of the 29 CD and laser disc factories in the country and to destroy pirated goods and equipment used to produce the goods.

U.S. officials have confirmed that six of those plants have already been shut down during the weeklong negotiations.

One key sticking point was resolved Sunday morning when the People's Liberation Army raided and closed down the Shenfei CD and laser disc plant in Shenzhen. U.S. officials considered the southern Chinese factory the most flagrant violator of copyrighted films and recordings in China. It gained notoriety for selling copies here of "The Lion King" video, which has not yet been released in the United States.

The accord also:

- Provides greater access for U.S. recording and film companies to the Chinese market.

- Lifts Chinese quotas on imported movies.

- Permits revenue-sharing and distribution arrangements between American film studios and Chinese partners.

In addition, the agreement addresses irritating issues for U.S. companies operating in China. Although Chinese courts can impose fairly substantial fines and other penalties on violators of copyrights, patents and trademarks, in practice government prosecutors rarely ask for the maximum penalties and often ask for the minimum. Under the accord, there are assurances about seeking stiffer penalties for producers of "knockoff" goods.

The two sides also pledged to share detailed information about violators who are caught and prosecuted to make sure enforcement actions are followed through. …