WASHINGTON - A World Trade Organization (WTO) report saying that China has
violated the trade group's protocols by restricting imports of DVDs, software
and books and limiting the ability of foreign suppliers to distribute their own
products in China highlights the double-edged sword that WTO membership has
become for one of the world's largest and fastest-growing economies.
China joined the WTO in 2001 and has become an increasingly active member and
proponent of open and competitive markets. It faces the challenge of
maintaining and increasing access to markets around the world to maintain its
massive manufacturing-based economy, but protectionism of its own domestic
industries
has - in the past - been a crucial component of China's growth.
The WTO report, the result of a US-led 2007 dispute claim, concludes that China
violated WTO agreements by censoring or restricting the import of reading
materials, films and music.
Chinese import barriers took the form of censorship or requiring manufacturers
and distributors of copyrighted material to distribute through Chinese
companies.
The 469-page report found that China's policies were "discriminatory" in that
they put foreign firms at an unfair disadvantage for importing copyrighted
materials.
"Today, a WTO panel handed a significant victory to America's creative
industries," said US Trade Representative, ambassador Ron Kirk. "These findings
are an important step toward ensuring market access for legitimate US products
in the Chinese market, as well as ensuring market access for US exporters and
distributors of those products. We will work tirelessly so that American
companies and workers can fully realize the market opening benefits that this
decision signals."
Industry groups most affected by the ruling include: The Motion Picture
Association of America, the Recording Industry Association of America and the
Association of American Publishers.
While the report did find a number of the complaints filed by the US were
legitimate, it also found some complaints lacked merit - specifically
complaints claiming China's laws covering piracy are inadequate. Both China and
the US might appeal the report's findings.
The lack of an explicit condemnation of China's enforcement of intellectual
property laws - particularly with regards to pirated music, movies and software
- is a setback for industries that have long sought to force China to more
strictly enforce its existing copyright and intellectual property laws.
Beijing has made a strong response to the report, but a statement released on
China's Ministry of Commerce website said that China was disappointed that the
WTO had not rejected the US complaint about the import and distribution of
foreign-copyrighted materials.
"China has always fulfilled its obligations on market access for publications,
and the channels for foreign publications, films and audio-visual products to
enter the Chinese market are extremely open," said Yao Jian, spokesperson for
the Chinese Ministry of Commerce, according to Xinhua News Agency.
China's WTO membership was seen as requiring considerable concessions from
Chinese policymakers and younger, economic reformers had to fight hard to
convince older leaders that opening the Chinese economy in line with WTO rules
wouldn't destroy domestic industries.
"The leadership was willing to join the WTO on these terms since it had to
deliver on economic growth and prosperity," said chair of Asian studies and
professor of applied economics at Bates College, Margaret Maurer-Fazio. "The
WTO could serve as a foil for unpopular policies. It gives the leadership some
distance from difficult decisions that will hurt some people but have good
long-term benefits."
China has increasingly used the WTO's mechanisms to file its own complaints
against WTO members who it feels are discriminating against Chinese imports.
On July 31, China announced that it was filing a complaint with the WTO against
the European Union for anti-dumping measures it had taken against Chinese iron
and steel fasteners.
The EU will have 60 days to resolve the dispute through consultations, and if a
resolution is not reached China can ask for a WTO panel to investigate the
complaints and rule on whether the EU violated WTO rules.
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