NEW YORK -- The World Trade Organization this week opened a formal investigation on allegations that China is providing a safe haven for product piracy and counterfeiting.

The WTO panel's scope will be limited to whether Beijing has taken sufficient action to protect IP rights, but it could ultimately authorize U.S. trade sanctions against China valued at billions of dollars annually -- the amount the U.S. claims its companies lose because of China's alleged lax enforcement. A final decision could take years.

China publicy complained about the measure, which the country blames on the U.S. It said it is going after companies and invidivuals who infringe U.S. copyrights and trademarks, and the U.S.'s actions could hurt trade relations between the two nations.

China last month blocked a U.S.-led attempt to form a panel. WTO rules prevented the country from delaying the investigation a second time.

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