China Piracy must stop
The United States is filing two trade complaints against China at the World Trade Organization over piracy of American books, music, video, and movies and limited market access for American products in China. Piracy and counterfeiting is extremely high in China in which costs an estimated $ 200 to $250 billion a year for the U.S.
The United States needs to request consultants with China to settle the disputes. CnnMoney.com says that if the matter isn't resolved within 60 days, then the U.S. may refer the matter to a WTO dispute settlement panel. Already under pressure from Congress to reduce the nation's $232.5 billion trade deficit with China, the Bush administration may have to issue a tariff tax on some goods it says are subsidized from China.
Thus, the economic issue here is basic supply and demand. The demand, in China, for U.S. piracy is high creating a large black market. If the piracy fails to stop, then there will begin a tariff tax on incoming products resulting in an increase in prices.
My statement is that if the tax is issued on these products, depending on the total amount, companies in the U.S. may begin to be able to produce these same products cheaper than they can be imported from China. Thus, more jobs and a positive economic impact will occur if the piracy fails to stop and a tariff tax is issued on certain products from China. Will this be positive or negative or maybe just negative in the short run?
2 comments:
The problem of piracy in China has been severe for years. Putting aside the problem of international trade affected by piracy, the really unsolved the problem is the "greedy" consumers of piracy in China. As a student from China, I know how Chinese peoople are addicted to cheap but high quality Piracy. Everyone's buying illegal DVDs and CDs that are incredible cheap but amazingly good in quality. It is an attraction that hard to deny. As long as there are consumers for Piracy, there will be people who dare to be the Pirates. Not to mention that it won't hurt that much to be a Pirate in China. Therefore, I think the legislation is still inmature both for people who are Pirate and people who are big fans of Pirates.
I believe the problem which of pirate in China is much serious. In this case, pirates had very lower break-even price than original goods, because the pirates had tax evasion. So we can see that the pirates will occupy the most market if it is not controlled by government. In my words, government should constitute the stricter punishments to both producers and consumers of pirate.
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