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China Resists WTO Ruling

China cites worries about “public morals” as it appeals ruling that it restrained U.S. entertainment fare.

China will appeal a World Trade Organization decision that its tight limits on distribution of Hollywood movies and music amount to an illegal bar on world trade, citing worries about “public morals.”

 

The appeal was first reported Tuesday by the Wall Street Journal online. In August the WTO, acting on a complaint from the United States rejected China’s distribution limits.

 

China limits to 20 the number of foreign films that can be distributed in the country and requires they be distributed by one of two firms. The August WTO decision rejected the requirement to use one of the two firms, but did not affect the number of films to be distributed.

 

The Wall Street Journal, citing a copy of the appeal, quoted China as saying the original WTO action "committed errors of law and legal interpretation in concluding that none of the measures are ‘necessary’ to protect public morals."

 

China suggested that in fact its limits are needed to protect morals.

 

In the U.S., there was quick reaction to the Chinese decision to appeal rather than alter its curbs.

 

“We remain committed to the strength of the United States’ case," Greg Frazier, executive VP and chief policy officer of the Motion Picture Association of America, said in a statement. "The initial decision was a significant win for the U.S. film industry, and we are confident that the U.S. position will prevail, again, as the appeals process unfolds. 

 

“While we respect China’s right to appeal and its decision to do so, we regret that the Chinese government did not move to implement the changes to bring itself into compliance with its WTO obligations.  We will vigorously support the U.S.’s position in the appeal, while standing ready to discuss with the Chinese a mutually acceptable way to move forward to resolve this dispute.”

 

Deborah Meslow, a spokeswoman for the U.S. Trade Representative Ron Kirk, said the U.S. is reviewing the appeal.

 

“We have just received this document and are analyzing it now,” she said. “We anticipate results of the appeal at the end of the year."