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WTO Rejects China’s Appeal Allowing U.S. Access to its Movie, DVD Market

By : Erik Gruenwedel | Posted: 13 Jan 2010

The World Trade Organization has formally rejected an appeal by China of an earlier ruling that allowed Hollywood studios easier access to the communist country’s theatrical and home entertainment markets.

The WTO late last month upheld a previous ruling that criticized the Beijing government’s guidelines requiring U.S. studios and record labels, among others, to distribute content through Chinese-owned firms and limited the number of Hollywood theatrical releases to 20 per year.

The Motion Picture Association of America hailed the latest ruling a “landmark victory” for the U.S. film industry.

“Now that this appeal has been rejected, we are hopeful that we will be able to work closely with U.S. and Chinese officials to implement the WTO ruling and find creative ways to open up the Chinese movie market,” said Dan Glickman, chairman and CEO of MPAA, in a statement.

Warner Bros., Disney, Paramount, Universal and 20th Century Fox were among Hollywood studios that filed complaints via the MPAA regarding unfair trade practices to distribute DVDs and theatrical content.

The initial 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.


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