The World Trade Organization (WTO) backed the United States on Wednesday this week in a major trade battle with China, issuing a ruling that could ease tight controls and open markets for U.S. makers of everything from DVDs to books and music downloads.
The decision came down decisively against Beijings policy of forcing American media producers to route their business through state-owned companies. The whole case lasted about two years since US appealed in 2007, and without a true precedent in the WTOs 14-year history, reflecting the complexity of the whole story. The findings in the 464-page document released to the public revealed dozens of complaints including publishers like McGraw Hill and Simon & Schuster, and major players in entertainment business such as EMI, SonyMusic Entertainment, Warner Bros. and Disney.
Americans say discriminatory Chinese rules are costing them millions each year in lost business opportunities.
However, China has committed itself to the WTO process and will likely try to come into compliance in some fashion. The government could set up new regulations and procedures for vetting and approving cultural imports that would allow a wider opening of the market, including lowering thresholds for Chinese ownership in joint ventures for distributing American goods.
Tom Allen, CEO of the Association of American Publishers, called it a landmark ruling. "It protects legitimate creators of valuable content and offers them fair access to this extremely important market," Allen said. "Both these long-standing market-access barriers and widespread piracy and counterfeiting in China cause serious economic damage to publishers, who make substantial investments in developing and promoting creative content."
EU, Japan and South Korea, who participated in the prosecution together with US, are likely to benefit from this WTO ruling.
Text adapted from Los Angles Times