U.S. lawsuits lack punch in China
By Jeffrey Gold
The Associated Press
Article Last Updated: 02/11/2008 12:28:07 AM MST


Steve McElvain works on a scooter at Patmont Motor Werks in Minden, Nev. A lawsuit filed by the scooter company over Chinese trade practices failed. (Cathleen Allison, The Associated Press )NEWARK, N.J. — When an American scooter maker lost patience with cheaper Chinese- made models flooding the U.S. market, it got some attention by filing an antitrust lawsuit.

Patmont Motor Werks Inc. accused the Chinese government and companies there of making it impossible for the Minden, Nev.-based company to sell its products in China. One aim of the lawsuit was to open China's doors to American-made products.

That improbable goal is now in ashes, when Patmont's lawyers couldn't even track down the companies they were suing to serve them court papers.

More companies and individuals are likely to face similar frustration. The flood of Chinese imports has triggered a growing number of lawsuits, but individuals and companies often find it impossible to win damages or other legal redress, especially for lawsuits filed overseas. Foreign companies are also filing lawsuits in Chinese courts, and occasionally winning, against local companies caught violating trademarks, copyrights and patents.

The legal obstacles are unlikely to be removed soon, although China has pledged to curb its mounting trade surpluses with the U.S. and has carried out a nationwide campaign to improve product quality and safety.

Within a decade, however, China is likely to conform more closely to international legal standards, said Gary Hufbauer, a China expert at a Washington think tank.

Current obstacles arise because the targets of lawsuits are often companies partly owned by the Chinese government or army, or are allied with provincial governors, said Hufbauer. As a result, their clout can outweigh efforts by the trade ministry to adhere to international agreements, he said.

Washington's growing impatience over Chinese trade practices has prompted dozens of retaliatory bills in Congress, as the U.S. trade deficit with China for 2007 is expected to exceed a record $250 billion. The U.S. lawmakers view 2008 — when China hosts the Olympics — as an opportunity to highlight their grievances.

Experts in international law say they know of no case in which Americans collected any money from a verdict or court order against a Chinese company, although some have been paid through settlements.

http://www.denverpost.com/business/ci_8224911