China, Russia and 10 other nations were targeted by the Bush administration for failing to sufficiently protect American producers of music, movies and other copyrighted material from widespread piracy.
The Bush administration on Monday placed the 12 countries on a “priority watch list” which will subject them to extra scrutiny and could eventually lead to economic sanctions if the administration decides to bring trade cases before the World Trade Organization.
Another 31 countries were placed on lower level monitoring lists, indicating the concerns about copyright violations in those nations did not warrant the highest level of scrutiny.
The designations occurred in a report that the administration is required to provide Congress each year highlighting problems American companies are facing around the world with copyright piracy, which they contend is costing them billions of dollars in lost sales annually.
“We must defend ideas, inventions and creativity from rip-off artists and thieves,” U.S. Trade Representative Susan C. Schwab said in a statement accompanying this year’s report.
The administration earlier this month announced that it was filing two new trade cases against China before the World Trade Organization. One of those cases charged that China was lax in enforcing its laws on protecting American copyrights and patents.
The annual report, known as a “Special 301 Report,” for the section of U.S. trade law that it covers, said that China has a special stake in upgrading its protection of intellectual property rights, given that its companies will be threatened by rampant copyright piracy as they increase their own innovation.
For Russia, the report said the United States will be closely watching to see how Russia fulfills the commitments it made to upgrading copyright protection as part of a U.S.-Russia accord reached last year which was seen as a key milestone in Russia’s efforts to join the World Trade Organization.
In addition to Russia and China, the 10 countries placed on the priority watch list were Argentina, Chile, Egypt, India, Israel, Lebanon, Thailand, Turkey, Ukraine and Venezuela.
In elevating Thailand to the priority watch list, the administration said it was concerned by a range of issues including a “deteriorating protection for patents and copyrights.” Thailand is currently in a dispute with international drug companies including Abbott Laboratories of the United States over the cost of drugs to fight AIDS and other diseases.
The Thai government in January issued compulsory licenses allowing the use of much cheaper generic versions of two leading drugs in Thailand.
Representatives of U.S. companies applauded the new administration report but Oxfam America denounced the administration for what the international development agency said was a misstatement of the rights of U.S. companies under international trade rules.
“The report ignores important international agreements signed by the U.S. government ... which clearly state that developing countries have the right to place public health and the public interest over intellectual property rules,” said Rohit Malpani, a policy adviser with Oxfam.
Neil Turkewitz, an official with the Recording Industry Association of America, said the administration was right to single out China and Russia for special criticism in the report.
He said that large-scale piracy of sound recordings was continuing unabated in China and that Russia was home to some of the biggest criminal enterprises involved in piracy of music as well as “some of the world’s most notorious pirate Web sites such as allofmp3.com.”
Dan Glickman, head of the Motion Picture Association of America, said the new report indicated “the scope of global piracy and serves as a sobering reminder of the challenges ahead.”
The countries placed on a lower-level watch list were Belarus, Belize, Bolivia, Brazil, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Hungary, Indonesia, Italy, Jamaica, South Korea, Kuwait, Lithuania, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Romania, Saudi Arabia, Taiwan, Tajikistan, Turkmenistan, Uzbekistan and Vietnam.
In addition, the administration said that Paraguay would be subject to special monitoring to see if it is addressing copyright concerns.