By Doug Palmer
WASHINGTON (Reuters) - U.S. lawmakers on Wednesday called for tough new measures to punish China for its failure to stop widespread piracy and counterfeiting of U.S. goods ranging from music CDs to manufactured products.
"I think we ought to consider this economic terrorism," Representative William Delahunt said, reflecting the frustration of many Democrats and Republicans at a House of Representatives Foreign Affairs Committee hearing.
High U.S. unemployment combined with a fragile economic recovery have stoked concerns in Congress about Beijing's trade practices, especially since China has emerged from the global financial crisis in much better shape.
The huge U.S. trade deficit with China, which rebounded to $22.3 billion in May, also has added to worries about lost U.S. jobs ahead of congressional elections in November.
Lawmakers repeatedly pressed President Barack Obama's chief intellectual property enforcement official, Victoria Espinel, to tell them what greater pressure the United States could bring on China to stop intellectual property theft.
"If we don't respond forcefully and hard against China until they clean up their act, it's going to send a message to the rest of the world that we're just spinning our wheels," said Delahunt, a Democrat.
The International Intellectual Property Alliance, which represents U.S. copyright industry groups, has estimated lost sales in China at more than $3.5 billion in 2009 due to piracy of American music, movies and software.
U.S. manufacturers also complain that China's counterfeiters rip off their goods and sell them in markets around the world, including the United States.
"China is by far the worst violator of intellectual property rights globally, and its government is complicit in ensuring that it keeps its number one position," said Republican Representative Ileana Ros-Lehtinen.
Last month, the chief executives of Microsoft and 11 other U.S. software companies met with Obama administration officials and lawmakers to urge increased pressure on China for failing to crack down on piracy.
Espinel told the panel the Obama administration already plans to make China a major focus of beefed-up effort to fight global piracy and counterfeiting.
But it may be necessary for Congress to pass legislation to put "more teeth" in U.S. enforcement tools, she said in response to persistent questioning from Republican Representative Dana Rohrabacher.
China's failure to protect U.S. intellectual property is even more troubling when combined with Chinese government industrial policies "aimed at putting us at a competitive disadvantage," Espinel said.
China also accounts for 80 percent of fake goods seized by U.S. customs authorities, she said.
Lawmakers threw out ideas for punishing China ranging from denying visas for Chinese that want to study in the United States to slapping retaliatory duties on Chinese goods.
But given the extensive U.S.-China trade relationship, both Congress and the Obama administration must be careful not to take steps that would have a "significant detrimental effect on other parts of our economy," Espinel said.
Democratic Representative Brad Sherman said the U.S. government should use cyber-combat techniques to take down Internet sites in China, Russia and other countries that sell pirated U.S. music and movies.
"That is something we're actively investigating," Espinel responded. But while it is technically possible, it does not take long for the sites to pop up in new locations, she said.
(Reporting by Doug Palmer; Editing by Eric Beech and Xavier Briand)