WTO rejects China’s restriction on copyrighted products

WTO rejects ChinaÆs restriction on copyrighted products    The World Trade Organization's Appellate Body confirmed Monday that China's restrictions on the import and distribution of certain copyright-intensive products are inconsistent with China's WTO obligations.
   The Appellate Body's confirmation is considered a victory for U.S. shippers and distributors of theater films, DVDs, music, books and journals.
   'The Appellate Body's findings are key to ensuring full market access in China for legitimate, high-quality entertainment products and the exporters and distributors of those products,' said U.S. Trade Representative Ron Kirk, in a statement.
   'U.S. companies and workers are at the cutting edge of these industries and they deserve a full chance to compete under agreed WTO rules,' he added. 'We expect China to respond promptly to these findings and bring its measures into compliance.'
   The Appellate Body report, and the WTO panel report released on Aug. 12, call on China to eliminate discriminatory treatment that U.S. distributors of certain products face, such as discriminatory operating term and capital requirements, as well as to allow U.S. companies to partner with Chinese enterprises in joint ventures to distribute music and other sound recordings over the Internet.
   'This case is also an important part of our efforts to combat intellectual property piracy,' Kirk said. 'The panel and Appellate Body findings ensure that legitimate American products are granted market access so that they can get to market and beat out the pirates.'
   The United States initiated this WTO dispute in April 2007.
   On appeal, China asserted three claims:
   *The country contended that its restrictions on product imports at issue are justified by an exception related to the protection of public morals.
   *China claimed that while it had made commitments to allow foreign enterprises to partner in joint ventures with Chinese firms to distribute music, those commitments did not cover the electronic distribution of music.
   *The country claimed that its import restrictions on theater films and certain types of sound recordings and DVDs were not inconsistent with China's commitments related to the right to import, because those products were not goods and therefore were not subject to those commitments.
   The WTO Appellate Body rejected each of China's claims and upheld the panel's findings with respect to each claim.
   The WTO Dispute Settlement Body is expected to adopt the Appellate Body report and the panel report within the next 30 days. Within 30 days following adoption, China must announce its intentions with respect to implementation of the WTO's rulings, the Office of the U.S. Trade Representative said.