BSA Calls for New Direction in U.S.-China Trade Policy

In Ways and Means testimony, Robert Holleyman calls for clear, measurable increases in US exports to China as the primary measure of success in U.S.-China trade

WASHINGTON, June 16 /PRNewswire-USNewswire/ -- A comprehensive, results-based U.S. trade policy with China is needed to replace the "one-off, issue-by-issue approach that guides the current relationship," Robert Holleyman, president and CEO of the Business Software Alliance (BSA), said in testimony today before the U.S. House Committee on Ways and Means. Holleyman called for a specific goal of increasing U.S. software exports to China by 50 percent by 2012.

Currently, the U.S. government works to address specific trade policies or practices in China, only to see new barriers erected by the Chinese government. Focusing on overall results, rather than particular policies, would help address persistent market barriers that are negatively impacting U.S. software companies doing business in China, including the high rate of software theft. "Two Chinese practices stand in the way of American software companies' ability to compete in China: massive illegal use of software and indigenous innovation policies that limit our access to a broad swath of the Chinese market," Holleyman said.

Click here for the full text of Holleyman's prepared testimony.

Holleyman said China's protectionist trade policies and complete disregard for intellectual property rights are allowing "Chinese firms to undercut the sales of U.S. goods and services, reducing the revenues of U.S. companies, and depriving U.S. workers of good jobs."

Holleyman noted that the CEOs of 12 BSA member companies — including Adobe, Autodesk, CA Technologies, Microsoft and Symantec — came to Washington last week to meet with President Obama's senior economic team and congressional leaders. "Their message was simple — the U.S. software industry is key to the U.S. economy and China is a critical market" for the future growth of the U.S. software industry, Holleyman told the Ways and Means Committee.

BSA estimates that 79 percent of PC software installed in China in 2009 was pirated. The commercial value of stolen software in China last year was $7.6 billion, double the value of software stolen in China just four years ago.  

Holleyman testified that China's indigenous innovation policies — which restrict U.S. companies' access to the Chinese market while promoting domestic champions — are compounding the challenges posed by intellectual property theft.  Portions of the indigenous innovation policies would require the transfer of U.S. intellectual property to Chinese entities as the price of entry to the China market.

In addition, Holleyman argued that the United States should "hold China accountable for its commitments to combat software theft" and "undertake a full examination of trade policy remedies, including whether China's practices are nullifying or impairing expected U.S. benefits under trade agreements."

Holleyman's testimony before the Ways and Means Committee follows his testimony on Tuesday before the U.S. International Trade Commission on the U.S. economic impact of China trade practices.

About BSA

The Business Software Alliance (www.bsa.org) is the world's foremost advocate for the software industry, working in 80 countries to expand software markets and create conditions for innovation and growth. Governments and industry partners look to BSA for thoughtful approaches to key policy and legal issues, recognizing that software plays a critical role in driving economic and social progress in all nations. BSA's member companies invest billions of dollars a year in local economies, good jobs, and next-generation solutions that will help people around the world be more productive, connected, and secure. BSA members include Adobe, Altium, Apple, Autodesk, AVEVA, AVG, Bentley Systems, CA Technologies, Cadence, Cisco Systems, CNC/Mastercam, Corel, Dassault Systemes SolidWorks Corporation, Dell, HP, IBM, Intel, Intuit, Kaspersky Lab, McAfee, Microsoft, Minitab, PTC, Progress Software, Quark, Quest Software, Rosetta Stone, Siemens, Sybase, Symantec, Synopsys, and The MathWorks.

SOURCE Business Software Alliance