08/12/2009

News / Trade Panel Tells China to Allow More U.S. Entertainment Imports

By Stephen Kaufman
Staff Writer

Washington — A World Trade Organization (WTO) dispute-settlement panel upheld a United States claim against China, saying China has not acted consistently with its international trade obligations because it places restrictions on the import and distribution of U.S. films, music, books and other copyrighted products.

The decision could reduce the market for counterfeit and pirated products in China.

The August 12 ruling said that by limiting the import of U.S. copyright-intensive products, including theatrical films, DVDs, music, books and journals, to a few Chinese state-owned companies, and restricting who could distribute those products, China had “nullified or impaired benefits accruing to the United States” under the General Agreement on Trade in Services and the General Agreement on Tariffs and Trade 1994.

China’s actions effectively mean that the U.S. products are more expensive and harder to sell to the Chinese public because U.S. companies are forced to rely on a few selected Chinese middlemen, according to news analysts. Because of the high popular demand for American films, music and other copyrighted products, the situation also creates a profitable market for pirated versions.

The WTO panel recommended that China eliminate its discriminatory practices to conform to its trade agreements, and also allow U.S. and Chinese companies to establish joint ventures to distribute and sell sound recordings over the Internet.

In an August 12 statement, U.S. Trade Representative Ron Kirk said the WTO decision was “a significant victory” for America’s creative industries, and is an important step toward ensuring there will be a market for U.S. copyrighted products in China

“This decision promises to level the playing field for American companies working to distribute high-quality entertainment products in China, so that legitimate American products can get to market and beat out the pirates,” Kirk said. He also said the ruling will create more open trade between the two countries.

“We will work tirelessly so that American companies and workers can fully realize the market-opening benefits that this decision signals,” Kirk said.

The WTO decision did not address all U.S. concerns. The dispute-settlement panel said some complaints went beyond its terms of reference or the scope of its review. For example, the United States objected to what it says are China’s burdensome approval requirements for foreign distributors and its restrictions on people who subscribe to imported reading materials and import electronic publications. The WTO did not rule on those concerns.

The panel also said there was not enough evidence to support U.S. concerns that imported music CDs are being discriminated against in favor of music which has gone through China’s censorship regime and is available over the Internet. It also said it did not find enough evidence to show that China has offered fewer distribution opportunities for imported films than for domestic films.

http://www.america.gov/st/eap-english/2009/August/20090812155203esnamfuak0.4810144.html?CP.rss=true

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