China's IP Policy Threatens Global Trade

From a New York Times Magazine article:

"Foreign companies lose control of their goods in two related ways: to counterfeiters who copy products and then sell them under different or altered brand names, and to pirates who make look-alikes and try to pass them off as the real thing. Using a lost-sales calculus, which measures the losses to foreign companies by determining the value of the dubious goods sold, the U.S. Department of Commerce estimates that American companies, as a result of counterfeiting and piracy, lose between $20 billion and $24 billion annually. The Japanese sacrifice even more: $34 billion. Throw in the sales lost by the European Union, and the cumulative losses for the three economic blocs approach $80 billion.

While losses to American and other advanced economies are high, China's appropriation and dissemination of the world's most valuable products and technologies, if they continue unabated, will ultimately mean a lot more than dollars lost. China's pirating and counterfeiting could radically change the way entertainment, fashion, medicine and services are created and sold. The companies, big and small, that Americans work for could be weakened. Chinese practices might reduce the prices of what we buy, by undermining the powerful companies that now control essential but expensive goods like drugs and computer software -- or these practices might, should China's unwillingness to accede to American copyright demands ignite trade wars, drive prices up.

A U.S. consular official in China who requested anonymity -- few American officials are willing to speak openly about sensitive issues relating to China -- told me: ''Nothing has a higher priority in our trade policy than the fight to protect American intellectual property. It is every bit as important as the war against weapons of mass destruction."

Via I/P Updates.