America has warned Vietnam that it risks retaliation unless it acts against rampant intellectual property rights violations.

The United States deputy trade representative, Jon Huntsman, told reporters that Washington was prepared to downgrade Hanoi from its current status on a watch list of copyright violators unless action was taken.

Mr Huntsman isin Vietnam for the first review of a landmark trade agreement which took effect in December.

Mr Huntsman told reporters he had seen pirated videos, compact discs and DVDs being sold openly in a shop next door to the Trade Ministry in Hanoi.

But he said there had been good progress in drawing up laws to protect intellectual property.

From the newsroom of the BBC World Service