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China Appeals WTO Ruling on U.S. Films, Music Dispute

22 Sep, 2009 By: Erik Gruenwedel

China has formally appealed last month’s ruling by the World Trade Organization (WTO) that criticized the Beijing government’s guidelines requiring U.S. studios and record labels, among others, to distribute content through Chinese companies.

Although a copy of China’s formal appeal was not made public, the WTO said it had informed its member countries of the action, reported the Associated Press.

A three-member panel from the WTO Aug. 12 found that China’s restrictive system for distributing imported Hollywood theatrical movies, DVDs, CDs, downloads and books violated international trade rules.

Warner Bros., Disney, Paramount, Universal and 20th Century Fox are among the Hollywood studios that fielded complaints via the Motion Picture Association of America (MPAA) regarding unfair trade practices to distribute DVDs and theatrical content.

The ruling involved a 2007 case brought before the WTO by the U.S. government that claimed state-owned companies in the communist country monopolized the importation of theatrical movies, limited the number of movie DVDs U.S.-owned companies operating in China could import and erected unnecessary barriers preventing studios from selling DVDs directly to Chinese consumers.

When China joined the WTO in 2001 it pledged to ease trade laws that would allow U.S. companies to compete in its markets.

The WTO has no legal authority to force compliance among member countries, but it can allow aggrieved parties the right to impose tariffs and other punitive remedies.

The WTO is expected to rule on the appeal some time next year.

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