Thursday, July 10, 2003

Malaysian anti-piracy action riles US

BARADAN KUPPUSAMY in Kuala Lumpur

Ties between Malaysia and the United States are being further strained by disagreement over plans to fix price ceilings for music, film and software discs.
The US has warned this will go against the Southeast Asian country's long-term interests, but Malaysia has dismissed the warning out of hand.
Domestic Trade and Consumer Affairs Minister Muhyiddin Yassin said the US warning that price fixing would backfire was "nonsensical".
"This is a decision made based on our problem. They [US] should try to understand our way of handling problems. We will not bow to them," he said.
Mr Muhyiddin, a powerful vice-president of the ruling United Malays National Organisation and a key ally of prime minister-in-waiting Abdullah Ahmad Badawi, said the US should instead be "thankful" that Malaysia had almost wiped out disc piracy in a very short time.
"Malaysia will stick to its decision," he said. "Don't jump the gun and make nonsensical predictions and assumptions as though the price-control decision is not a wise move."
He was confident there would not be a backlash from the US entertainment industry.
US Department of Commerce Assistant Secretary William Lash said that price fixing would backfire and damage the country's race to build a knowledge-based society.
Mr Lash, who is visiting Southeast Asian countries to lobby for anti-piracy measures, said price fixing would drive away foreign producers.
"Price-control measures will have no effect on piracy," Mr Lash said. "It sends a wrong message to the investment community because it involves imposing price controls on luxury items."
He said price controls would affect investment, technology transfer and growth of small enterprises. "Now it is optical discs. What next? Shoes, apparel?" asked Mr Lash.
One Malaysian newspaper editor privately said the statement was "too frank" for a US trade official.
Prime Minister Mahathir Mohamad has made stinging anti-US comments in recent weeks, prompting American officials to retort that they looked forward to building better relations with successor Mr Badawi.
Malaysia's mainstream media played down the exchange between Mr Lash and Mr Muhyiddin, as it is widely understood that Mr Badawi, who takes over in October, is serious about mending fences with the US.
The US stands to lose more under price controls than other exporting countries, with nearly 70 per cent of disc contents originating from the US.
US trade officials had earlier said American industries lost about US$240 million to piracy in Malaysia last year.
After years of lip service, the government in May launched a concerted campaign against piracy, raiding 7,400 premises and seizing more than 25 million pirated discs. Police also closed down several large optical disc manufacturers. Pirated discs subsequently disappeared from pavements and night markets across the country.
But the artists and the entertainment industry are upset after the government ordered them last week to reduce prices or see the government fix prices.
They have two weeks to comply and must surrender their income and tax statements to ensure the proposed price reduction is commensurate with their profits.