[Congressional Record Volume 151, Number 159 (Tuesday, December 13, 2005)]
[House]
[Pages H11335-H11336]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CHINA--PIRACY OF U.S. PRODUCTS
The SPEAKER pro tempore. Pursuant to the order of the House of
January 4, 2005, the gentleman from Florida (Mr. Stearns) is recognized
during morning hour debates for 5 minutes.
[[Page H11336]]
Mr. STEARNS. Mr. Speaker, counterfeiting is a growing international
concern that requires international cooperation to defeat. It threatens
our national security interests in areas of health, economics, and of
course homeland defense. The Food and Drug Administration estimates
that counterfeit drugs account for 10 percent of all drugs that are
sold in the United States. An estimated 14 percent of these drugs that
are sold through the mail are counterfeit, they are mishandled, or
expired. Pfizer Pharmaceutical recalled 16.5 million Lipitor pills
nationwide as a result of an FDA investigation that uncovered evidence
that these pills were counterfeit.
Counterfeit technologies have caused immense harm as well. For
example, in California a 13-year-old boy sustained severe injuries from
a counterfeit battery that exploded in his cell phone. The phone
exploded with such force that fragments of the phone lodged into the
ceiling of his family's home.
Exploding batteries, doctored medications, foods, dangerous cosmetics
and skin products, fake shampoos and soaps, doctored teas, substandard
auto and airplane components, the list of counterfeit goods grows
daily. Even fake and dangerous baby foods have been reported. In China,
for example, infants suffered severe malnourishment and a dozen died
after being fed fake infant formula that contained few nutrients.
The hazards of counterfeit products have also affected our
transportation. In 2003, the Motor and Equipment Manufacturers
Association cited safety violations due to counterfeit auto parts:
Brake linings made of compressed grass, sawdust, or cardboard;
transmission fluid made of cheap oil that is dyed, and oil filters that
use rags for the filter element. Additionally, the FAA estimates that 2
percent of the 26 million airline parts installed each year are
counterfeit, equaling approximately 520,000 parts. While still the
safest form of travel, a Business Week investigation found that bogus
airplane parts played a major role in at least 166 U.S. based accidents
and mishaps during a recent 20-year period.
According to the U.S. Chamber of Commerce, approximately 5 to 7
percent of world trade is in counterfeit goods. The FBI estimates that
intellectual property theft costs the United States companies between
$200 and $250 billion a year in revenue. According to the U.S. Customs
and Border Protection, counterfeit merchandise is directly responsible
for the loss of more than 750,000 American jobs, in addition to tens of
thousands more lost of privacy of software programs, movies, and music.
The auto industry could hire 200,000 additional workers if sale of
counterfeit auto parts was eliminated.
In some cases, the counterfeiters are not only breaking the law, they
are supporting terrorists. According to Interpol, seized al Qaeda
training manuals recommend selling fake goods to finance illegal
activities. One example is the confiscation of $1.2 million of
counterfeit German brake pads and shock absorbers in Lebanon in October
2003. The profits from the products were earmarked for supporters of
Hezbollah. Another poignant example is the 1993 World Trade Center
bombing, which was financed partially through the sale of fake Nike t-
shirts from a store on Broadway.
We are currently involved in trade with a country that refuses to
enforce these laws. Mr. Speaker, I am referring to China, which has
ignored its own anti-piracy laws on American movies, music, computer
software, and other products. In 2003, China accounted for 66 percent
or $62.4 million of all counterfeit goods seized by the U.S. Customs
Service at ports of entry into the United States. In 2004, U.S.
industries lost between $2.5 and $3.5 billion due to privacy alone.
Some reports estimate virtually 90 percent of products in some
industries sold in China are pirated from the United States.
In June, Under Secretary John Dudas testified in a hearing I held in
the House Commerce, Trade and Consumer Protection subcommittee, ``This
administration has been pressing China to impose prison sentences and/
or stiffer fines on violators, provide little or no deterrence.''
Chinese government efforts since have yielded no results.
U.S. Trade Representative Bob Portman recently announced the U.S.
would be requesting from China an explanation of the steps it has taken
to curb privacy of U.S. products. In the announcement he said, ``Piracy
and counterfeiting remain rampant in China despite years of engagement
on this issue.''
In conclusion, requiring accounting ability is an essential first
step to stopping Chinese abuse of U.S. intellectual property rights. I
support this request, and I hope the President's trip to Asia this week
will further convince Chinese officials of the need for enforcing
intellectual property rights laws.
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