La Russophobe previously reported that Russia's anti-copyright, anti-rule-of-law chickens seemed to have come home to roost on the AK-47. Now, quoting Reuters, New Russian Corporatism reports that Russia has only just avoided being slapped with the lowest possible designation for piracy.

WASHINGTON (Reuters) - The U.S. Trade Representative's office on Friday rejected an industry request to slap its harshest piracy label on Russia, but warned Moscow could lose trade benefits unless it closes pirated music web sites and takes other steps to curb copyright theft.

In a beefed-up annual report on global piracy, USTR also warned it could bring a World Trade Organization case against China for failing to enforce anti-piracy laws and announced it would conduct a provincial-level review of piracy problems in China this year for the first time.

U.S. movie, music and other copyright industry groups that comprise the International Intellectual Property Alliance urged the USTR's office earlier this year to label Russia as a "priority foreign country," a designation reserved for countries with the most severe piracy problems.

The industry groups also asked USTR to immediately suspend trade benefits for Russia under the Generalized System of Preferences, which allows developing countries to ship many of their goods to the United States without paying duties.

USTR instead kept Russia and China on its "priority watch list," its second most serious designation, and said it would continue reviewing whether to suspend GSP benefits for Moscow. The IIPA estimates U.S. companies suffered more than $4 billion in lost sales due to piracy in the two countries last year.

While sparing both Russia and China from its worst piracy label, USTR directed a large portion of the report at both countries and said it would be closely monitoring their anti-piracy actions throughout the coming year. USTR for the first time also published a list of "notorious" pirate marketplaces, including the Russian web site www.allofmp3.com, which it called the world's largest server-based pirate web site and urged Moscow to shut down. Also listed were the Silk Street Market in Beijing and other markets in China, Russia, Mexico and South America where pirated and counterfeit goods are easily available.

The IIPA estimates global piracy losses for U.S. companies at $30 billion to $35 billion in 2005. Other estimates put total annual losses from world sales of pirated and counterfeit goods between $200 billion and $250 billion.
Eric Smith, president of the IIPA, welcomed USTR's plan to conduct an intensive review of anti-piracy enforcement activities at the provincial level in China.

But he criticized the government's decision not to name Russia as a priority foreign country and renewed the industry's call for an immediate suspension of Russia's trade benefits.

U.S. copyright groups also oppose Russia's entry into the World Trade Organization until Moscow does a much better job of stopping piracy, a view shared by many members of Congress who regret Washington did not push China harder on that point before Beijing joined the WTO in 2001.

"We see the potential of an ugly replay with Russia," said Rep. Adam Schiff, a California Democrat who is co-author of a congressional resolution opposing Russia's entry into the WTO as long as piracy problems remain unchecked. The United States has been in intense talks with Russia on terms of its entry into the WTO and some industry officials believe the two sides are close to a deal.