A FORMAL investigation into China's trade in pirated and counterfeit goods finally began today.

The World Trade Organisation is to examine US claims that the country provides a safe haven for factories making fakes.

China is seen as one of the world's biggest sources of illegal copies, ranging from DVDs, CDs and designer clothes to sporting goods and medications.

China blocked the inquiry last month, but was prevented today at a WTO dispute panel from delaying it again.

Beijing has said it is stepping up its fight against imitations of US copyrights and trademarks, and heavily criticised Washington earlier this year for starting the case, saying it could damage trade relations between the countries.

It could have a huge impact on American industries from Hollywood to Silicon Valley in determining how they combat piracy.

The WTO panel's scope will be limited to whether China has done enough to protect intellectual property rights.

But it could ultimately authorise American trade sanctions worth billions of dollars annually.

Juan Millan, a US trade lawyer, told the dispute body that product piracy in China remains "unacceptably high."

Source: scotsman.com