Your Trade Sanctions Style Is No Match for my Fist of Ten Thousand Pirate DVDs by mattsteinglass
April 10, 2007, 11:51 am
Filed under: China, Trade, United States

The NY Times today covers the US’s move to take China to the World Court over intellectual property issues.

kung fu clones
The harder we sanction them, the faster they make copies! But how???

The article concentrates on the question of whether a more aggressive US posture will help or hurt the cause of Chinese economic reform (fewer subsidies, more domestic consumption, loosening the yuan) — i.e. whether aggressive US moves will only reinforce the conservative forces in the Party who are closely tied to export-driven businesses. It also looks at how sanctions are driven by newly empowered protectionist-populist forces in the Democratic Party.

The new policy risks angering or embarrassing those in Beijing who may be trying to reform economic policies as Washington wants. In addition, many trade experts worry that China might retaliate against American imports or cut back on cooperation sought by Washington on other issues, like diplomatic problems involving Iran, North Korea and Sudan.

Still, the new policy was widely seen by trade specialists and industry spokesmen as necessary to send a signal not only to Beijing but also to Democrats in Congress, who plan even tougher sanctions against China if the administration does not act.

This is interesting, as far as it goes. What’s strange, though, is that the article doesn’t mention anything about the substantive merits of the case against China on intellectual-property grounds, or about how much the US thinks it’s losing each year to Chinese intellectual piracy.

Obviously, there are space considerations, and you can’t address everything in every article. But it looks increasingly as though the US is going to have to cede much of its manufacturing to China, but can still mount a strong defense of its symbolic-analyst industries: entertainment, software, publishing, and so on. There’s a very solid logic to going after China in an arena where it’s clearly violating international law (intellectual property theft is rampant in China) and where the US stands to potentially make a tremendous amount of money and redress its trade deficit at least a bit. I’d like to see someone do some good bird’s-eye coverage of how much the US could stand to gain by forcing China to enforce the intellectual property laws it instituted to get into the WTO.


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