U.S. files piracy complaint against China

NEW YORK (CNNMoney.com) -- The United States filed two trade complaints against China on Tuesday at the World Trade Organization over piracy of American books, music, video and movies and limited market access for American products in China.

As expected, the Chinese government expressed "great regret" and "strong dissatisfaction" against the U.S. complaints at the WTO .

"Piracy and counterfeiting levels in China remain unacceptably high," U.S. Trade Representative Susan Schwab said in a statement. "Inadequate protection of intellectual property rights in China costs U.S. firms and workers billions of dollars each year, and in the case of many products, it also poses a serious risk of harm to consumers in China, the United States and around the world."

During a press conference Monday announcing the U.S. plans, Schwab said market access barriers for genuine American books, movies and music products in China was an equally serious issue.

"These are the products that are the prime targets of piracy. By removing these barriers it will open the market to legitimate commerce in China," Schwab said.

"The decision runs contrary to the consensus between the leaders of the two nations about strengthening bilateral economic and trade ties and properly solving trade disputes", Wang Xinpei, spokesman with China's Ministry of Commerce said in a statement posted to the ministry's Web site on Tuesday.

He also warned that the action by the United States would seriously undermine future trade and economic relations between the two trade superpowers.

The Commerce Department estimates that piracy and counterfeiting cost the United States about $200 billion to $250 billion a year, including as much as $24 billion from the sale of pirated goods in China.

Under WTO regulations, the first step is for the United States to request for consultations with China to settle the disputes. If the matter isn't resolved within 60 days, then the U.S. may refer the matter to a WTO dispute settlement panel.

The complaints are the latest move on trade by the Bush administration, which is under growing pressure from Congress to reduce the nation's $232.5 billion trade deficit with China, one of Washington's biggest trading partners.

The Commerce Department last month announced a 180-degree turn in U.S.-China trade policy, saying the United States would start slapping tariffs on some goods it says are subsidized from China.

The move reverses a 23-year old policy of not applying countervailing duties on cheap goods from countries like China.

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