[Congressional Record Volume 142, Number 62 (Tuesday, May 7, 1996)]
[House]
[Pages H4435-H4436]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    CHINA'S VIOLATIONS OF UNITED STATES INTELLECTUAL PROPERTY RIGHTS

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentlewoman from California [Ms. Pelosi] is recognized 
during morning business for 5 minutes.
  Ms. PELOSI. Mr. Speaker, I rise today to call to the attention of our 
colleagues legislation which I plan to introduce this week to impose 
sanctions against China for violations of our intellectual property 
rights.
  Mr. Speaker, regardless of where Members are in this body over the 
annual debate on most-favored-nation status for China, an issue 
separate from that but clearly about America's competitive advantage 
internationally, our intellectual property, is one where I think we 
will have agreement.
  Mr. Speaker, over the last 7 years, the United States trade deficit 
with China has increased by over 1,000 percent. In 1988, the deficit 
was $3 million. In 1995, the deficit was $35 billion. It is

[[Page H4436]]

projected to grow to well over $40 billion for this year, and shortly 
will surpass Japan as the country with our largest trade deficit.
  Mr. Speaker, much of this is due to lack of market access for United 
States products which are not allowed into China, products made in 
America. But today, I want to call to my colleagues' attention to the 
intellectual property violations and piracy. That figure of $2.5 
billion lost in 1995 alone is over and above the trade deficit.
  The deficit figure of $35 billion for last year does not include the 
loss to our economy from China's violations of United States 
intellectual property rights, including the piracy of compact discs, 
videos, and software, which cost the United States economy $2.3 billion 
in 1995, by industry figures.
  My bill would impose increased tariffs on Chinese products to 
compensate for the loss to the United States economy resulting from 
China's intellectual property rights violations. It would leave the 
discretion to the President of the United States to determine the 
figure and the criteria for what the sanctions would be.
  Since 1991, the United States Government has repeatedly tried to 
encourage the Chinese Government to halt the piracy and to provide 
market access for United States products. The efforts, which I will 
outline briefly, have not been successful.
  In 1991, and 1992, the Bush administration initiated a special 301 
investigation of China's intellectual property rights practices and 
published a list of Chinese products for possible sanction. Shortly 
thereafter, the Chinese Government, as a response to that, agreed to 
sign a memorandum of understanding designed to address piracy concerns.
  Mr. Speaker, under the MOU they agreed to strengthen their patent, 
property rights and trade secret laws and to improve protection of U.S. 
intellectual property. None of this happened, and the piracy of U.S. 
IPR continued.
  In 1994, the Clinton administration's United States Trade 
Representative initiated another special 301 investigation, noting that 
while China had implemented several new laws, they were not enforcing 
the laws. The United States Trade Representative added to his list of 
concerns trade barriers restricting access to China's markets for 
United States movies, videos, and sound recordings.
  In 1995, the USTR issued a list of products once again which would be 
subject to increased tariffs as a result of China's lack of action on 
IPR and piracy.
  Mr. Speaker, despite all of these efforts by United States officials, 
the Chinese Government is not abiding by the agreement, piracy is 
increasing, and market access to United States products is being 
denied. In addition, the Chinese Government today has castigated the 
United States for considering protecting its own intellectual property.
  Mr. Speaker, this comes at a time that we are telling the workers of 
America that we live in a global economy, that many products which are 
labor intensive must be made in areas where labor is less costly, but 
that the comparative advantage of the United States is our intellectual 
property, our ideas, information, our software. If this is so, then all 
the more reason for this Congress and this administration, the Clinton 
administration, to call a halt to the theft of our intellectual 
property by China.
  Mr. Speaker, we have tried year in and year out with memoranda of 
understanding and with agreements. Enough is enough. The theft of 
intellectual property hurts American workers, costs American jobs, and 
undermines our global economic competitiveness.
  I hope that my colleagues will agree to cosponsor my bill to 
implement sanctions against China for its intellectual property 
violations. I hope Members will call my office to say they would like 
to be original cosponsors, before the bill is introduced this week for 
American workers, for American competitiveness.

                          ____________________