By Doug Palmer
WASHINGTON, May 1 (Reuters) - The U.S. Trade
Representative's office criticized China on Wednesday for
failing to stop the growing theft of American trade secrets that
are the lifeblood of U.S economic might, in the latest sign of
Washington's frustration with the problem.
"Not only are repeated thefts occurring inside China, but
also outside of China for the benefit of Chinese entities," USTR
said in its annual report on countries with the worst records of
protecting U.S. intellectual property rights.
"The United States strongly urges the Chinese Government
take serious steps to put an end to these activities and to
deter further activity by rigorously investigating and
prosecuting thefts of trade secrets by both cyber and
conventional means," the report said.
U.S. corporate victims of trade-secret theft have included
General Motors, Ford, DuPont, Dow Chemical, Motorola, Boeing and
Cargill as well as lesser-known companies.
A target company can see the payoff from research investment
evaporate as a result of corporate espionage and lose market
position, competitive advantage and efficiencies.
The White House in February rolled out a strategy to address
the growing problems, which occur both through cyber-attacks and
older methods such as a disloyal employee stealing trade secrets
on the job and selling them to a rival company.
The Obama administration said its weapons would included
trade policy measures like USTR's annual intellectual property
rights report, working with like-minded countries and possible
While U.S. officials insisted the strategy was not aimed at
any particular country, a White House report list 17 cases of
trade-secret theft by Chinese companies or individuals since
2010, far more than any other country.
Two senior Democrats recently urged USTR to use the annual
intellectual property rights report to designate China as a
"priority foreign country" because of trade secret theft.
That would initiate a process that could lead to sanctions
on Chinese goods if U.S. concerns were not addressed.
The U.S. trade office stopped short of that action. But a
senior U.S. trade official, speaking on condition he not be
identified, said that remained an option, as did the possibility
of bringing a case at the World Trade Organization.
"We remain resolved to use all the appropriate trade policy
tools now and in the future to contribute to the
administration-wide response to that problem," the official
Meanwhile, the USTR report accused the Chinese government of
failing to take the issue seriously.
"Conditions are likely to deteriorate as long as those
committing the thefts and those benefiting continue to operate
with relative impunity, frequently entering into unfair
competitive relationships with their victims.
"Too often, Chinese authorities view trade secrets cases as
routine commercial disputes, rather than as serious violations
of law," the report said.