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