The United States gave China more time last year to reduce piracy and counterfeiting of US good but is considering whether to take legal action, a US trade official said last night.
"Last October, we informed China we would be filing such a case but then agreed to hold off, with the support of US industry, when China asked for further bilateral discussion," Deputy US Trade Representative Karan Bhatia said at a House of Representatives hearing on China trade issues.
Five months later, "no settlement has been reached," Ms Bhatia said in testimony for the hearing. "If it becomes clear that negotiations will not be successful, then we will proceed with WTO dispute settlement."
The United States has been threatening a WTO complaint against China for failing to enforce US intellectual property rights for at least a year or more.
US software, music and book publishers estimate they lose billion of dollars of sales annually in China because of piracy. Other US companies are also hurt by Chinese sales of counterfeit drugs, auto parts and other goods.
Ms Bhatia said the Bush administration was consulting with Congress and industry before deciding its next move.
"The Chinese government, at a senior level is saying the right thing. China's got laws and regulations. The problem that we're seeing is not very much improvement in terms of piracy and counterfeiting levels," he said.