CZECHS WILLING TO DRAW GREATER EC FOCUS ON CHINA

UNCLAS PRAGUE 000984 SIPDIS SIPDIS STATE FOR EUR/NCE ERIC FICHTE, EB/TPP/BTA EDWIN SAEGER, EB/TPP/IPE EVAN FELSING, EAP/CM CRANE STATE PLEASE PASS USTR POSNER, WINTER, MCCOY COMMERCE FOR ITA/MAC/EUR MIKE ROGERS E.O. 12958: N/A TAGS: ECON ETRD AORC KIPR EURM WTRO USTR CH EZ SUBJECT: CZECHS WILLING TO DRAW GREATER EC FOCUS ON CHINA IPR VIOLATIONS; COMMENTS ON DOHA REF: STATE 126703 ¶1. Econoff delivered reftel demarche August 7 to Ministry of Industry and Trade (MIT) Multilateral Department Director Ladislava Votavova, who agreed that Chinese intellectual property (IPR) violations are a serious concern for the CR and the GOCR would be willing to draw greater EC attention to the situation in the CR. Votavova was somewhat surprised and dismayed to hear that the EC believes there has been a dearth of complaints about China,s IPR enforcement efforts received from member States, especially in light of EU Trade Commissioner Mandelson,s June 2006 visit to China focusing on IPR-related issues. She speculated that the EC,s impressions may be based on the fact that not enough companies from member States complain directly to the EU on this issue. ¶2. Although Chinese IPR violations have been a significant problem for Czech companies, only a few have actively voiced their concerns to the GOCR or to Brussels, according to Votavova. A number of Czech firms are losing money due to cheap, counterfeit Chinese products of Czech motorcycles, Czech porcelain, and Czech automobile parts. Votavova mentioned the case of a Chinese firm selling counterfeit Czech sparkplugs at a Czech trade fair in Brno (second largest Czech city) earlier this year. Votavova explained that Czech companies take the issue very seriously, yet no one from the Czech business community invited to a July 7 conference in Brussels on China IPR violations attended, presumably because July 7 followed a three-day Czech holiday. Despite the passive nature of Czech companies, Votavova explained that the GOCR had already forwarded to the EC a summary of problems with Chinese IPR violations and enforcement issues. In addition, Deputy Minister of Industry and Trade Martin Tlapa raised the issue directly with Chinese counterparts during his visit to Beijing in July. ¶3. Econoff also delivered reftel demarche August 13 to MFA Department of Trade Policy and Agriculture Director Jiri Havlik and Deputy Director Tomas Kuchta. Both are following Chinese IPR violations closely and agreed that Chinese IPR violations are a problem for Czech manufactures. They highlighted the case of Blata Motorbike Company, which has lost nearly USD 20 million to Chinese reproductions. Kuchta expressed frustration at Chinese efforts to close down operators, saying that Chinese officials will target one manufacturer for closure only to have several more pop up in its place. ¶4. On Doha, Votavova indicated that EU Member States are still strongly unified. The EU is going through a period of reflection now and a 133 Committee meeting is scheduled for September 7 to discuss next steps. Votavova expressed hope that under the direction of the Finnish Presidency, DDA may come to some sort of a resolution. CABANISS