20. The representative of the United States said that for her delegation the transitional review mechanism continued to be a useful mechanism that helped to provide additional transparency for China's trade regime and allowed Members to better understand and assess China's progress in implementing and complying with its WTO obligations. Turning to his delegation's submission before the Council, she noted that the United States appreciated the importance China attached to the protection of intellectual property rights and the active steps that it had taken to improve IPR enforcement and protection, including a vigorous enforcement campaign during last year's Olympics as well as notable prosecutions of large software piracy operations.
21. At the same time, the United States remained concerned about several aspects of China's regime for the protection and enforcement of intellectual property rights, in particular about reports that Chinese officials, especially at the provincial and local level, had been urging a more lenient enforcement of IPR laws in light of the global financial crisis. Her delegation believed that the current situation called for a strengthened approach to IPR protection and enforcement in China, in order to grow and sustain a more robust and innovative economy in the longer term. It was critically important that China and other WTO Members maintained regimes that respected all intellectual property rights regardless of national origin. While she understood the importance that China placed on promoting its domestic industries through indigenous innovation polices, her delegation encouraged China to ensure that these polices did not undermine the rights of non Chinese owners of intellectual property rights or otherwise ran afoul of WTO rules. The United States also continued to see evidence of unacceptable levels of IPR infringement, particularly in the numbers of Chinese goods seized at US borders. Mid year statistics for 2008 showed that China remained the source of the vast majority of infringing goods seized at US borders, accounting for 81 per cent of seizures by value, and it was troubling that the seizure of Chinese goods had been increasing, not decreasing, each year since China had joined the WTO in 2001.
22. Exports of counterfeit and pirated goods, however, were only part of the problem. United States industries continued to report high rates of infringement within China. More work was needed to address growing challenges involving internet counterfeiting and piracy in China, such as offering infringing products for sale to businesses and consumers or deep linking to infringing files. At the same time, the problem of physical counterfeiting and piracy in China continued and was widespread as illustrated by the continuing operation of large wholesale and retail markets for counterfeit and pirated goods in a number of jurisdictions in China. The range of industry sectors affected by infringement within China was quite broad, including, among many others, pharmaceuticals, electronics, batteries, auto parts, industrial equipment, toys, and musical instruments. The United States was further concerned because many of the counterfeit products made in China continued to pose a direct threat to the health and safety of consumers not only in China, but in the United States and elsewhere around the world.
23. In conclusion, her delegation looked forward to receiving China's responses to its questions, and to continuing to engage bilaterally with China on a wide range of IPR issues. The United States appreciated the cooperative spirit in which the two countries had intensified IPR discussions under the Joint Commission on Commerce and Trade and other bilateral mechanisms, and continued to believe that deeper multilateral and bilateral dialogue and cooperation would provide an important path to progress.