The World Trade Organization has upheld a ruling requiring China to allow Hollywood studios the right to partner with Chinese distributors of their choosing on theatrical and DVD releases.
China’s loss on its appeal of an earlier WTO ruling represents a big win for the majors, which are currently required by the Chinese government to work with one of two state-owned distributors.
In 2007, the U.S. Trade Representative challenged the maze of Chinese laws and regulations that restrict the ability of U.S. companies to release their pics in the world’s most populous nation.
There are several more steps to undertake, however. A settlement dispute body within the WTO will now have to adopt the finding, generally a pro forma process. China then has 30 days to announce its intentions to abide by the ruling.
“With today’s rejection of China’s appeal, the WTO has taken a major step forward in leveling the playing field for America’s creative industries seeking to do business in China,” MPAA chair-CEO Dan Glickman said.
“At this time of economic difficulty, gaining access to the Chinese market is of the utmost importance to the working men and women of this country,” Glickman said.
The MPAA persuaded the Office of the U.S. Trade Representative to take action against China through the WTO over intellectual property protection and market access two years ago. Chinese officials were outraged that state policies on its quota of 20 film imports per year, blackout periods (when only local films show) and other restrictions would be scrutinized by the WTO.
Glickman said he is hopeful that the MPAA can work closely with U.S. and Chinese officials to implement the WTO ruling and find “creative ways to open up the Chinese movie market.” He said the move also would help to fight piracy in China by making Hollywood films more available.