EU's Mandelson threatens WTO action against China over piracy

(BRUSSELS) - EU trade chief Peter Mandelson toughened up Europe's line on China's "patchy" protection of intellectual property rights on Wednesday, raising the prospect of WTO action against Beijing.

Weeks after the United States lodged a complaint with the World Trade Organisation, Mandelson warned that the EU could follow in Washington's footsteps with its own case at the global trade referee.

"I do not rule out initiating or joining action at the WTO if in our view China is failing to take its responsibilities seriously," he told journalists in Brussels.

"China has agreed to protect (intellectual property rights). It did so when it joined the WTO and despite considerable efforts by the Chinese government, IPR protection in China remains patchy and uneven," he added.

Mandelson took a tougher stance than his colleague Viviane Reding, the EU's media and telecoms commissioner, who said during a visit in Beijing shortly after the US action that Brussels would not join the lawsuit.

With counterfeit DVDs and luxury goods widely available on the streets of Chinese cities, China's position on intellectual property rights is increasingly becoming a source of tension with its trading partners.

While claiming to have confiscated more than 90 percent of the pirated CDs and DVDs produced nationwide last year, authorities' resources are limited, according to one top Chinese copyright protection official.

Taking a more diplomatic approach than the United States to the problem so far, Mandelson has lobbied Beijing to crack down even harder on copyright piracy but stressed that the EU expected the "dialogue" to bear fruit.

"As we're seeing in the United States, Europe's patience could wear thin if we do not see our dialogue with the Chinese authorities delivering more change when it comes to IPR and other market access issues," he said.

Mandelson's comments came as he was presenting an updated strategy for bringing down trade barriers considered to be unfair to EU exports, including plans to pursue more cases at the WTO if need be.

While suing trade partners at the WTO was not the "instrument of choice" for prying open markets, Mandelson said he was prepared to do so "as a last resort."

The new strategy also included plans to put more trade staff "on the ground" in EU missions in emerging trade powers such as China and India to be better prepared to tackle potentially unfair trade barriers.

Although the new strategy gives a new focus to attacking individual barriers in specific countries, Mandelson said that the European Union's priority remained to make progress in the so-called Doha round of WTO free-trade negotiations.

He said that WTO members were at a "crucial moment" in the negotiations, with the major powers scheduled to hold three ministerial meetings in the next two months.

WTO members are struggling to revive the negotiations ahead of the end of June when the US administration's powers to give fast-track treatment to international trade deal expires.

Under the fast track procedure the US Congress can vote either to approve or reject -- but not amend -- trade deals signed by the administration. WTO negotiators fear that in the absence of fast track, Congress might be tempted to water down a Doha trade agreement.

The Doha Round, launched in 2001 in the Qatari capital, has repeatedly missed deadlines as wealthy and developing nations have struggled to strike a deal on opening up trade in agricultural, industrial goods and services.