News Release Article from  Foreign Affairs, Trade and Development Canada

Canada Joins WTO Consultations on Intellectual Property Rights in China

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April 25, 2007
No. 62
The Honourable David Emerson, Minister of International Trade, today announced that
the Government of Canada has asked to participate as a third party in World Trade
Organization (WTO) consultations on China’s enforcement of intellectual property
rights. The United States initiated these consultations on April 9, 2007.
“We are seeking clarification from China on its intellectual property rights enforcement
regime, given concerns expressed by Canadian industry,” said Minister Emerson. “Our
goal is to resolve this issue through dialogue with the Chinese government and through
cooperation with our trading partners.”
This request is based on concerns expressed by Canadian stakeholders on a range of
issues related to China’s intellectual property rights regime. The consultations will
provide an opportunity for Canada to relay these concerns to Chinese authorities and to
assess the latest steps taken by China to bring its intellectual property regime into
compliance with its WTO obligations. If consultations do not succeed in resolving the
matter, a WTO panel could be requested to adjudicate the issue.
Counterfeit and pirated goods are a growing global problem, estimated by Canadian
industry to impact the Canadian economy by several billion dollars annually. On the
domestic front, the Department of Foreign Affairs and International Trade is working
with other government departments to enhance Canada’s intellectual property
enforcement regime.
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A backgrounder is attached.
For further information, media representatives may contact:
Jennifer Chiu
Press Secretary
Office of the Minister of International Trade and Minister for the Pacific Gateway and
the Vancouver-Whistler Olympics
613-992-7332
Trade Media Relations Office
Foreign Affairs and International Trade Canada
613-996-2000
http://www.international.gc.ca
Backgrounder
The Government of Canada has asked to participate as a third party in WTO
consultations with China on that country’s intellectual property rights (IPR) enforcement
regime. The United States requested consultations on this issue on April 9, 2007.
Consultations with Canadian industry have revealed concern with China’s IPR regime in
a wide range of areas. By joining these consultations, the Government of Canada would
be able to participate in discussions on the measures at issue with a view to gaining a
better understanding of their effect on Canadian interests.
Issue
The object of the consultations is to determine whether China is complying with the
WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement; more
specifically with Article 61, which provides for “criminal procedures and penalties to be
applied at least in cases of wilful... copyright piracy on a commercial scale”, because
China’s criminal statutes relating to IPR infringements include quantitative thresholds
that must be met in order to prosecute intellectual property rights violations.
Another issue of concern is that Chinese courts have decreed that the default rule for
calculating the value of illegal gains or business volume for copyright offences is to use
the infringer’s price, rather than the price of the genuine product, the former being much
lower than the latter.
Counterfeit and pirated goods are a growing global problem, estimated by the Canadian
Anti-Counterfeiting Network to account for billions of dollars worldwide. While there are
many sources, it is estimated that more than 60 percent of these goods come from
China.
Consultations represent the first stage in the WTO dispute settlement process. This
phase allows parties to discuss the measures at issue with a view to resolving their
dispute outside of a formal adjudicative process. China is under no obligation to
address issues presented by third party members during the consultations. If parties fail
to reach an agreement at this stage, a WTO panel can be requested to provide
recommendations or rulings on the issue.
In 2006, Canada exported $7.7 billion in goods to China and imported $34.5 billion
worth of goods.
Further information about the WTO dispute settlement process can be obtained from
the WTO website at http://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm.
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