GENEVA (AFP) — The WTO agreed on Tuesday to formally examine a US complaint about shortcomings in China's intellectual property protection, as friction over trade builds between the world's economic superpower and its emerging rival.
The World Trade Organisation's dispute settlement body set up a panel to rule on the dispute in a meeting here, following a complaint Washington first lodged in April, officials said.
The clash over intellectual property becomes the fourth case involving a formal US challenge to trade practices in China, whose ballooning trade surplus has become a political flashpoint.
The United States claims that Beijing's legal structure for protecting and enforcing copyright and trademark protections is unfairly deficient and does not comply with WTO rules.
China told the meeting it regretted the US request and said it was confident that its measures were in line with the trade watchdog's rulebook.
"We strongly oppose the US attempt to impose on developing members through this case," China said in a statement.
Beijing said the case went beyond what was prescribed in the "TRIPS" agreement among the 151 WTO members, which covers intellectual property and trade.
Chinese-made counterfeit goods -- from software and DVDs to luxury leather goods and watches -- are widely available in the US market.
Washington's complaint targets alleged shortcomings in patent protection for imported products in China, as well as in copyright protection, and also claims that some counterfeit goods seized by Chinese authorities find their way back onto the market.
"In pursuing this action, the United States is seeking to eliminate significant structural deficiencies that give pirates and counterfeiters in China a safe harbor to avoid criminal liability," the US Trade Representative's office said last month.
The decision to set up a panel was made automatically, following a first request on August 31 that China opposed, a standard practice in the WTO.
Officials said the United States told the meeting it had taken note of official Chinese statements about bolstering intellectual property protection and enforcement.
However, bilateral talks with Beijing in recent months had failed to resolve the specifics of this dispute, according to Washington.
WTO panels of independent specialists normally take about six months to examine and rule on disputes.
The number of complaints against China, which joined the global trade watchdog in 2001, started growing in 2006.
Washington's range of complaints against Beijing includes local content requirements affecting spare parts for cars, tax breaks for Chinese companies, and broadcasting rights.
China also resorted to the WTO's system for the first time last week by launching a formal complaint against the United States over US restrictions on imports of Chinese coated paper, the commerce ministry in Beijing said.
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