Software group eyes wants deal in US-China talks

WASHINGTON, Dec 9 (Reuters) - Microsoft (MSFT.O: Quote, Profile, Research, Stock Buzz), Adobe (ADBE.O: Quote, Profile, Research, Stock Buzz) and other U.S. software manufacturers are pressing the Obama administration for a deal with China next week that could spur billions of dollars of additional U.S. software exports, an industry official said on Thursday.

A software agreement would help set the stage for a successful summit meeting in January between U.S. President Barack Obama and Chinese President Hu Jintao.

But U.S. business groups and lawmakers also are hoping for progress on several trade irritants -- including market access barriers to U.S. beef and medical devices -- at the U.S.-China Joint Commission on Commerce and Trade meeting next week.

Chinese Vice Premier Wang Qishan will head a delegation of nearly 100 officials for talks led on the U.S. side by Commerce Secretary Gary Locke and U.S. Trade Representative Ron Kirk.

Robert Holleyman, president of the Business Software Alliance, said his group met with Locke and other Obama administration officials early this month to make the case for a new strategy in trade relations with China.

"Our view, and I think it is increasingly understood by the U.S. government, is we have to measure any future progress by tangible results," Holleyman said.

"China has made a lot of promises in the past ... Yet, from a software industry perspective, there is still substantial hemorrhaging and bleeding in China. In just the last five years, the commercial value of software piracy has doubled from $3.9 billion in 2005 to $7.6 billion last year," he said.

BSA wants the Obama administration to press for a commitment to boost U.S. software sales and exports to China by at least 50 percent over two years, Holleyman said.

But to really address the piracy problem, U.S. software sales to China need to double every year for 5 years, Holleyman said, adding he also pressed his case with Wang on a recent trip to Beijing.

China pledged at a JCCT meeting in 2006 that government agencies and state-owned enterprises would only use licensed software. BSA welcomed that step, but U.S. software firms have not see a significant increase in sales, Holleyman said.

Legal software sales in China, from both domestic and foreign suppliers, totaled an estimated $5.4 billion in 2009.

Statistics on U.S. software exports to China were not immediately available. U.S. Census Bureau data showed the United States sold about $560 million of computers and $1.44 billion of computer accessories to China last year.

John Frisbie, president of the U.S.-China Business Council, said companies hoped for progress on a number of fronts in the JCCT talks next week.

One major concern is China's "indigenous innovation" policies, which threaten to force U.S. companies to transfer intellectual property to China to gain access to its vast government procurement market, Frisbie said.

U.S. companies also want China to lower investment barriers in a number of key services sectors, Frisbie said.

China is likely pressing the United States to maintain an open investment environment and to address its concerns about U.S. export controls and its designation as a "non-market economy" under U.S. anti-dumping law, he said.

Thu, Dec 9 2010

By Doug Palmer

Edited by Cynthia Osterman

Source: reuters.com