U.S. says sanctions possible in China copyright spat

By Andrew Callus

GENEVA (Reuters) – China said on Friday it complied with “most measures at issue” in an international trade ruling made against its restrictions on copyright-intensive goods such as films, books and music.

But the United States, which filed the case against China years ago, took a dimmer view of Beijing’s action to date and said the two sides had begun discussions of how to proceed if Washington decides to pursue a request to impose sanctions.

China’s statement made in Geneva at the World Trade Organization (WTO) headquarters came six days after a deadline to comply with the WTO ruling elapsed.

The United States says China’s restrictions on goods such as books, newspapers, films, DVDs and music create demand for pirated goods. China lost a WTO appellate body ruling in December 2009 and agreed with the United States that it would implement the decision by March 19, 2011.

China said the dispute was “embodied with more complexity and sensitivity than other disputes.”

“China made tremendous efforts to implement the DSB’s rulings and recommendations and so far has completed amendments to most measures at issue,” it said, referring to the WTO’s dispute settlement body.

But the United States said China still had a ways to go to comply with the ruling.

“The United States is troubled by the lack of any apparent progress by China in bringing its measures relating to films for theatrical release into compliance with the DSB (dispute settlement body) recommendations and rulings,” the United States said in its statement.

“The United States also has significant concerns about the incomplete progress relative to China’s measures relating to audio visual home entertainment products, reading materials and sound recordings,” it added.

U.S. officials informed the WTO membership that it has begun discussions with China on the possibility of the United States requesting WTO permission to impose sanctions in the dispute, known in WTO jargon as “suspending concessions.”

“The United States and China are in discussions regarding how to handle any eventual request for a compliance proceeding … and any eventual request for authorization to suspend concessions,” the United States said.

“The United States hopes to report progress in those discussions in the coming days,” it said.

(Additional reporting by Doug Palmer in Washington; editing by Philip Barbara)

U.S. says sanctions possible in China copyright spat