Wednesday, August 12, 2009

WTO Rules Against China On Copyrights

The World Trade Organization has delivered a victory to the United States in its two-year-old case against Chinese restrictions on importation and distribution of copyright-protected movies, music, books and other entertainment products, CongressDaily reported Wednesday (subscription required). The decision found that the limits on sales of U.S. entertainment wares violated global trade rules. In a statement, Trade Representative Ron Kirk said it would "level the playing field for American companies" and represented a "clear win" for the United States, whose trade relations with China have been increasingly testy.

Motion Picture Association of America Chairman Dan Glickman said the WTO decision "points a way forward that will begin to even the playing field" in an important market. He noted that the Chinese system for distributing U.S. films to Chinese audiences is among the most restrictive and burdensome in the world and the ruling, coupled with a recent announcement that the Chinese government intends to lower market access thresholds for the cultural industry, may be an opening movie studios have been seeking.

Recording Industry Association of America Executive Vice President Neil Turkewitz said the fact that the United States has prevailed does not mean that China has lost. "The adoption of rules that enhance the operation of legitimate markets will inure greatly to the benefit of the Chinese creative community and to Chinese society," he said. Chinese and U.S. creators alike face illicit enterprises that claim at least 80 percent of the physical market and an estimated 99 percent of the online market.

The RIAA also highlighted one aspect of the WTO report on which the finding was not clear. The panel did not explicitly find that China's discriminatory censorship process violated their WTO commitments. However, this finding - or lack thereof - was of a technical nature related to the panel's narrow reading of the relevant U.S. claim, Turkewitz said. The panel was troubled by discriminatory elements of the censorship review process but was unclear that the U.S. has pled a particular cause of action.