August 13, 2009 - 3:30am
A World Trade Organization dispute panel, ruling in a case brought by the United States, said on Wednesday that China's system for importing and distributing audiovisual material such as books and films breaks international trade rules and should be revised. It was the third time a WTO panel had ruled against China, which is becoming increasingly assertive in pressing its own complaints against other countries at the world trade body. Besides, the system breached the terms of China's entry to the WTO in 2001, the panel said.
The United States immediately welcomed the ruling. U.S. Trade Representative Ron Kirk said in a statement: "These findings are an important step toward ensuring market access for legitimate U.S. products in the Chinese market, as well as ensuring market access for U.S. exporters and distributors of those products." The U.S. trade deficit with China totaled $103 billion in the first half of 2009, down 13 % from last year but still a source of tension between the two.
Washington believes widespread piracy in China of books, records, movies and software robs U.S. companies of the chance to make substantial sales. However, the panel did not support Washington in all its claims and declined to rule on others it agreed with China were outside its mandate. Both the United States and China will have to decide within the next 1 to 2 months whether to appeal any part of the ruling, the official said.
Neil Turkewitz, vice president of the Recording Industry Association of America, said in a statement: "We call upon the Chinese government to use this occasion to adopt measures across the board that will expand opportunities for creators regardless of their nationality and to abandon all practices that hinder legitimate commerce." The panel findings also call on China to allow U.S. companies to partner with Chinese enterprises to distribute sound recordings over the Internet.
The United States had complained China was restricting imports to a limited number of state enterprises and also restricting who could distribute these products. This not only contravened the fundamental WTO rule requiring equal treatment between local and foreign businesses, but also breached commitments made by China when it joined the WTO in 2001 to open up sales and distribution within three years. Washington complained this forced U.S. businesses to rely on Chinese middlemen or agents, pushing up costs and hurting marketing and sales.
That in turn also opened up an opportunity for pirates to plug the demand for U.S. products with counterfeit copies. Dan Glickman, president of the Motion Picture Association of America, said that recent statements from China's State Council provide additional reason to be optimistic about the chance for getting more legitimate U.S. films in the Chinese market.
The United States immediately welcomed the ruling. U.S. Trade Representative Ron Kirk said in a statement: "These findings are an important step toward ensuring market access for legitimate U.S. products in the Chinese market, as well as ensuring market access for U.S. exporters and distributors of those products." The U.S. trade deficit with China totaled $103 billion in the first half of 2009, down 13 % from last year but still a source of tension between the two.
Washington believes widespread piracy in China of books, records, movies and software robs U.S. companies of the chance to make substantial sales. However, the panel did not support Washington in all its claims and declined to rule on others it agreed with China were outside its mandate. Both the United States and China will have to decide within the next 1 to 2 months whether to appeal any part of the ruling, the official said.
Neil Turkewitz, vice president of the Recording Industry Association of America, said in a statement: "We call upon the Chinese government to use this occasion to adopt measures across the board that will expand opportunities for creators regardless of their nationality and to abandon all practices that hinder legitimate commerce." The panel findings also call on China to allow U.S. companies to partner with Chinese enterprises to distribute sound recordings over the Internet.
The United States had complained China was restricting imports to a limited number of state enterprises and also restricting who could distribute these products. This not only contravened the fundamental WTO rule requiring equal treatment between local and foreign businesses, but also breached commitments made by China when it joined the WTO in 2001 to open up sales and distribution within three years. Washington complained this forced U.S. businesses to rely on Chinese middlemen or agents, pushing up costs and hurting marketing and sales.
That in turn also opened up an opportunity for pirates to plug the demand for U.S. products with counterfeit copies. Dan Glickman, president of the Motion Picture Association of America, said that recent statements from China's State Council provide additional reason to be optimistic about the chance for getting more legitimate U.S. films in the Chinese market.