U.S. Congress Questions Whether China is Playing Fair on Trade; SEMA Member Auto Meter Testifies against Illegal Chinese Knock-Offs

WASHINGTON--July 20, 2006--Efforts to fight off-shore piracy continued today as two House Small Business Subcommittees held a joint hearing to consider whether China is enforcing its laws on intellectual property rights (IPR). Auto Meter, a member company of the Specialty Equipment Market Association (SEMA), provided examples to U.S. lawmakers on the consequences of lax enforcement by that nation.

"Since 1999, Auto Meter has spent nearly 2 million dollars protecting itself against infringing imports, many of which are manufactured in China," said Auto Meter executive George Russell. "Auto Meter has been assisted in this effort by the U.S. federal courts, the U.S. International Trade Commission and the Customs Service, as well as SEMA and other trade associations. Yet these products continue to enter the U.S. market, and every year Auto Meter loses tens of thousands of dollars in sales to these illegal products."

Over the past two decades, the United States has pressed China to improve IPR protections. While the Chinese government has enacted new laws, enforcement has been lax and piracy and counterfeiting have spiraled. The U.S. government estimates that counterfeits constitute between 15 and 20 percent of all products made in China, and account for about 8 percent of China's gross domestic product.

"SEMA commends Auto Meter for taking a leadership role in the fight to protect valuable intellectual property rights and American jobs," said Chris Kersting, SEMA's president and CEO, following the hearing. "SEMA has instituted successful policies for enforcing its members' IP rights and continues to help keep this issue on the front burner of U.S. trade policy. However, the association remains concerned about the volume of counterfeit and knock-off products in the global marketplace. Given the large volume of trade with China, a focus on that country's lax IPR enforcement is timely and appropriate."

The hearing also considered whether China is manipulating the value of its currency. China has experienced huge economic growth and gains in productivity, a burgeoning export sector, and increased foreign investment. These are factors that normally cause a currency to appreciate in value yet that has not happened. Many economists estimate that the Chinese yuan is currently undervalued by as much as 40 percent. This leads to further outsourcing and a transfer of American jobs.

The Congressional hearing provided an opportunity for Congress to bolster the Bush Administration's efforts to compel China and other countries to respect intellectual property rights and provide the means for U.S. companies to enforce their rights in those countries.

Auto Meter designs, manufactures and markets a full line of automotive measuring devices - gauges and tachometers - for the high-performance automotive aftermarket, including race cars and street rods. Founded in 1957, with headquarters in Sycamore, Ill., Auto Meter is a $45 million enterprise with approximately 300 employees. Auto Meter's products are the gold standard for quality, performance, and customer service in the high-performance aftermarket. For more information, visit www.autometer.com.

SEMA represents the $34 billion specialty automotive industry. Founded in 1963, the trade association has 6,817 member companies. It is the authoritative source of research data, trends and market growth information for automakers and the specialty auto products industry. The industry provides appearance, performance, comfort, convenience and technology products for passenger cars, minivans, trucks, SUVs, crossovers and recreational vehicles. For more information, contact SEMA at 1575 S. Valley Vista Dr., Diamond Bar, CA 91765-3914; call 909-396-0289; or visit www.sema.org or www.enjoythedrive.com.