De facto US ambassador Douglas Paal sternly warned Taiwan yesterday that it needs to ensure the protection of intellectual property rights (IPR) or risk damaging its economy.
"Ensuring IP protection is the linchpin for Taiwan's economy," Paal told a gathering of US and Taiwanese business leaders yesterday.
PHOTO: CHIANG YING-YING, TAIPEI TIMES
"I also encourage Taiwan to continue to close down the factories making illegal pre-recorded CDs and DVDs."
The enormous economic impact of rampant piracy "diminishes Taiwan's international investment reputation," Paal said.
IPR protection has been a major sticking point in relations between Taiwan and the US. In April, the Office of the United States Trade Representative is expected to place Taiwan back on its Special 301 Priority Watch List of intellectual property violators because the government is not doing enough to stamp out the piracy of movies, music and software.
"Despite positive steps, the lax protection of IPR in Taiwan remains very serious," the 2002 Special 301 report said.
Paal was a guest speaker at the American Chamber of Commerce's annual year-end dinner at the Formosa Regent Hotel in Taipei. Speaking prior to Paal at the event, President Chen Shui-bian (陳水扁) said "Taiwan acknowledges its responsibility and obligation to uphold, defend and protect IPR."
Chen applauded the efforts of the government's anti-piracy task force, saying they investigated 5,000 cases of IPR infringement, filed charges against another 6,000 suspects and seized counterfeit goods worth US$300 million last year.
"Government agencies are also evaluating measures for revising relevant laws that will allow for stiffer penalties for IPR offences and provide greater deterrence," Chen said.
Paal urged the revision of the nation's Copyright Law, allowing police to take the initiative in tackling piracy.
Chen pledged that amendments to the law that take into account US recommendations will be forwarded to the Legislature for review. No timetable for the review has, however, been set.
Paal warned that failure to improve the IPR environment will scare off potential foreign investors.
"Increased attention to IPR enforcement, among others, lay the groundwork for Taiwan to address investor concerns," he said.
Foreign direct investment in Taiwan has plummeted since President Chen took office, falling 33 percent in 2001 to US$5.1 billion. Inbound investment tumbled another 36 percent last year to US$3.3 billion, the Ministry of Economic Affairs' Investment Commission reported yesterday. Figures for January are equally depressing -- down 41 percent in January year-on-year to US$210 million.
At the same time overseas investment in China grew 12.5 percent last year to top US$52.7 billion, the People's Daily reported last month.
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