Mandelson Urges China To Act On Counterfeiting, Trade Barriers

by Mary Swire, for LawAndTax-News.com, Hong Kong

09 November 2006

Speaking to reporters this week during a visit to China which aims to boost cooperation on trade and intellectual property protection matters, EU Trade Commissioner, Peter Mandelson suggested that a failure to address the latter issue could affect fledgling Chinese industries.

Commenting after a meeting with State Intellectual Property Office officials, Mr Mandelson revealed that piracy is "the biggest problem for companies trying to do business here", revealing that over half of all counterfeit goods stopped at European borders last year originated in China.

He went on to add that:

"Tolerating intellectual property theft is a dead end for China. If China continues to look the other way, this will come back and bite the Chinese."

He welcomed efforts by the Chinese authorities to address this issue, including the establishment of IPR complaint centres to assist aggrieved foreign businesses, stating that:

"Europe and China have established a good dialogue and cooperation on IPR matters and I do not want to do anything to undermine or weaken that relationship."

However, he called for strong action from the State authorities, especially with regard to the payment of royalties on European technology patents.

"I would like to see a strong public declaration by the Chinese government that they want to see the appropriate royalty payments being made in the future, without turning a blind eye to their non-payment as has been the case in the past," he announced, according to reports.

In a speech delivered on Tuesday at Tsinghua University in Beijing, Mr Mandelson sought to emphasise the importance of increased trade cooperation, observing that:

"Five years after its accession to the WTO, despite a lot of implementation work, China has still not fulfilled some of its commitments and the EU will push to see these met. China can still do more to open its markets and liberalise trade in services and investment. And it will gain from that, as liberalisation translates into higher living standards."

"We also expect China to compete fairly - to ensure that massive state intervention and distortion of costs and prices does not provide Chinese companies with an unfair trading advantage. Europe has no interest in challenging the exercise of legitimate comparative advantage in labour or production costs. That is tough competition but it is fair competition and we will respect it."

"But Europe will defend itself against unfair trade – just as China does all the time, and just as we are entitled to do under WTO rules."

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