BRUSSELS, Belgium (AP) -- Compared to Washington, the European Union has been serene about piracy in China of its trademarks, copyright and patents. Can that last?
Violations of intellectual property rights, trademarks and patents held by EU companies and researchers will be high on the agenda when European Commission President Manuel Barroso leads a large delegation into two days of economic and trade talks in Beijing starting Thursday.
The EU estimates pirated goods cost EU businesses euro21 billion (US$33.3 billion) in lost trade annually -- about a third of current EU exports to China. But unlike the United States, it has to date not pursued any Chinese piracy cases in the World Trade Organization.
Still, the EU has put China in the category of worst violators of intellectual property. It is the only country in that category because its anti-piracy efforts are so weak that 80 percent of counterfeit goods imported into the 27-nation bloc are Chinese-made.
Other issues include EU complaints that China's currency is undervalued and has pushed the EU's trade deficit to euro170 billion (US$270 billion) in 2007. The EU also feels investing in China too often means having to launch joint ventures and transfer technology developed by Europeans.
Barroso will lead a delegation of nine EU commissioners -- one-third of the EU executive -- including EU trade chief Peter Mandelson.
Before he left, the EU's main business lobby BusinessEurope called on the two sides to ''place exchange rates, trade and investment at the core of their relations.''
''A more flexible currency regime is essential for a rebalancing of the Chinese economy, allowing for a more rapid appreciation of the Chinese currency,'' said Ernest-Antoine Seilliere, the head of BusinessEurope. He also urged Barroso to enroll China in a global climate change deal, since the country is overtaking the US as the world's biggest polluter.
The Beijing talks coincide with a cooling of relations over human rights. The crackdown on Tibet has led to calls in Europe for a boycott of the opening of the Beijing Olympic Games.
That prospect that horrifies Mandelson as much as it does China.
''We must also not lose sight of the fact that we are bound to work with China, to live alongside China, to help China succeed,'' he said last week.
Mandelson has repeatedly criticized blatant sales of fake goods throughout China that cost European and U.S. businesses dearly. To counter this he has nudged China into a 2007-2011 venture designed to boost enforcement of Chinese piracy laws by providing expertise and training.
''It is important to offer the Chinese all possibilities to put their house in order,'' says Luc Devigne, head of intellectual property issues at the European Commission's trade directorate. ''We are not always convinced there is a willingness to stamp out piracy.''
That's as tough as the piracy language gets at the EU.
''We are not naive, of course,'' says Devigne. But, he adds, there is more future in making clear to China that it is in its own interest to punish those who steal other people's ideas, designs and inventions. ''You cannot develop an economy without protection of intellectual property.''
What keeps the EU from legal action through the WTO, says Claire Innis of consultancy Global Insight, is that China is not as big a factor in Europe as it is in the United States.
''In America, there are strong feelings of protectionism in the Congress. And the U.S.-China relationship is much more complex, more interdependent. There is America's huge trade deficit with China. China has leverage over the U.S. because it holds significant amounts of U.S. Treasury debt. And there are security issues like Taiwan and North Korea.''
By comparison, says Innis, Europe ''is much more in an appeasement mode with China.''
That is ''a bad thing,'' says Stuart Newman, head of the Brussels-based Foreign Trade Association whose 100 members include Europe's biggest supermarket groups and textile importers. ''We should be going after China in a tough way on intellectual property rights violations.''
But Newman acknowledged that while the U.S. is one country and can act alone, the EU has 27 member states.
Trade is seen differently depending on the EU capital. Britain, Sweden, Germany and the Netherlands tend to favor free trade and massive imports of cheap goods but clothing and shoe manufacturers in Italy see their industry disappearing due to competition from low-wage Asian economies.
While he favors legal action through the WTO, Newman does not underestimate the job of eradicating piracy in China.
''I don't think it's possible to resolve this problem completely in a country of the size and remoteness of China and with a very centralized government.''
Innes of Global Insight believes the Beijing meeting will nudge China to raise the value of the yuan.
''China tends to do this following these meetings. For the Europeans this is important. The euro is very strong as it is bearing the brunt of corrections in the US dollar.''
