April 10, 2006

Bush presses Hu on piracy concerns

By Doug Palmer

WASHINGTON (Reuters) - President George W. Bush urged
Chinese President Hu Jintao on Monday to address two major
trade irritants -- Beijing's currency policy and rampant piracy
and counterfeiting of American goods -- when he visits the
United States next week.

"He's coming into a country where there's over a $200
billion trade deficit (with China) and a lot of Americans are
wondering where's the equity in trade," Bush said in remarks at
The Paul H. Nitze School of Advanced International Studies at
Johns Hopkins University.

"I think he could help the Americans understand the
importance of a free trading world if he were to maybe make a
statement on his currency, for example," Bush said.

The United States has been pressing China to move to a
fully floating exchange rate for a number of years.

Beijing has taken a modest step in that direction, but U.S.
manufacturers maintain the yuan remains seriously undervalued,
giving Chinese companies an unfair advantage that has helped
fuel the record bilateral trade deficit.

The Bush administration also has been mulling a World Trade
Organization case against China for failing to adequately
enforce laws protecting intellectual property rights, namely
copyrights, patents and trademarks. American companies estimate
they lose billions of dollars annually because of the theft.

Bush said it was very important for Hu "to make a
declaration on international property rights," referring to
concerns about widespread piracy in China of U.S. music, movie
and software and counterfeiting of other American products
ranging from auto parts to pharmaceuticals.


"It's difficult for a nation that likes to trade, like
ours, to go into a country uncertain as to whether or not
patents will be protected or product will be protected from
copy," Bush said.

Top U.S. and Chinese trade officials will hold an annual
meeting on Tuesday in Washington ahead of the Hu visit, where
the Bush administration has hoped to make progress on issues
ranging from China's ban on U.S. beef to intellectual property
rights to regulations that block market access for U.S. goods.

The Chinese chair for that meeting, Vice Premier Wu Yi, has
been leading a large delegation of Chinese business executives
on a cross-country tour to sign dozens of contracts
collectively worth billions of dollars with American companies.

Boeing, Caterpillar and Motorola will sign additional deals
on Tuesday at the Commerce Department, according to the White
House. The Boeing deal is expected to be for 80 737s to fill
out an earlier Chinese commitment to buy 150 of the planes.

Senior Bush administration officials welcomed a recent
Chinese government directive aimed at reducing piracy by
requiring Chinese computer makers to pre-install legal
operating software before their goods leave the factory gates.

But they offered a cautious outlook for Tuesday's Joint
Committee on Commerce and Trade meeting, which is co-chaired on
the American side by U.S. Trade Representative Rob Portman and
Commerce Secretary Carlos Gutierrez.

"I think ... we're going to see a few (issues) cleaned up,
and we're going to see a few where there's partial (progress)
and we're probably going to see a few where there's very
little," a senior administration official said.

The same official urged China to quickly lift a
two-year-old ban on U.S. beef, saying failure to do that would
cast a pall on the April 20 Hu meeting with Bush.

(additional reporting by Tabassum Zakaria and Paul Eckert)