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U.S, China Avert Trade War

Prague, June 18 (RFE/RL) - The United States and Beijing yesterday reached a last minute agreement on deterring copyright theft in China. The deal has, for the moment, pulled the two countries back from a trade war.

Washington had threatened 100 percent punitive tariffs on 2,000 million dollars worth of Chinese exports to the U.S. unless Beijing complied with a 1995 agreement to close about 30 factories that have been producing millions of illegal copies of American music, videos and computer programs. The Chinese government had vowed to retaliate against U.S. tariffs with sanctions on U.S. products.

But acting U.S. Trade Representative Charlene Barshefsky said last night that there is evidence Beijing has made genuine efforts in the past two weeks to curb the piracy.

She said 15 pirate audio CD factories had been closed recently, including three underground plants. And she said more closures are expected among the 15 remaining authorized plants.

Critics say there is no evidence Beijing will come any closer to carrying out its new promises than it did in upholding the promises it had made last year. China had closed some pirate factories in early 1995 only to allow them to reopen several months later after western media attention shifted away from them.

Kevin Kearns, head of a coalition trying to convince the U.S. Congress to overturn President' Bill Clinton's decision to renew China's most-favored-nation trade status, called the new agreement "a public relations stunt" designed to "fool the Congress and the public."

But industry officials aren't expressing any doubts publicly for now. They say the new agreement could work where last year's deal failed. That's because there are provisions to strengthen industry officials' ability to monitor the situation.

The new agreement would establish a 24-hour monitoring system to make sure plants that continue to operate don't make pirated products at night. The monitors would include U.S. government officials as well as industry-backed anti-piracy groups. China also pledged to extend its piracy crackdown for another seven months in Guangdong province, where many of the pirate plants are located.

Officials of private sector representative offices would be permitted to collect information on piracy and present their findings to Chinese authorities. Previously, western piracy monitors had to flee the country after alerting Chinese officials about infringements because the monitors faced arrest as spies. As in Bulgaria and other eastern European countries, many of China's pirate factories are state-owned and have direct links to the military.

Finally, Beijing has agreed to open its markets for U.S. film and music producers, and to deploy police instead of administrators to deal with copyright theft.

Chinese officials had earlier opposed demands to open their markets for legitimate production of music, films and books. They said Washington wanted to influence China's ideological sovereignty.

Jack Valenti, head of the Motion Picture Association of America, said he doesn't want to judge yesterday's agreement by the failed agreement of 1995. He said he thinks there is a "new commitment and a new resolve" from both the Chinese and U.S. governments.

Jack Berman, chairman of the Recording Industry Association of America, said he was "relieved and delighted" with developments.

But Greg Mastel, a trade expert at the Washington-based Economic Strategy Institute, said the Clinton administration could be taking a political risk if it becomes apparent later this year that the pirate plants have reopened.

Mastel said: "Given our 10-year history of negotiating with China on intellectual property, we shouldn't get too optimistic."