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WTO backs U.S. in China dispute

Beijing breaking trade rules, says organization

CHINA — The U.S. has gained the upper hand in a knotty trade dispute with China over restrictions on the sale of American CDs, DVDs, books and computer software.

According to sources quoted by the Associated Press, officials familiar with the World Trade Organization ruling say the WTO found Beijing is breaking trade rules by forcing U.S. goods to be sold through Chinese state-owned companies.

The officials say the still-confidential ruling stops short of a complete U.S. victory. It allows China to make U.S. films go through one of two distributors to be shown in Chinese cinemas, a requirement that doesn’t apply to Chinese movies.

The Motion Picture Assn., which has been instrumental in efforts to push for the studios’ rights in the issue, declined to comment on the ruling, because it was still at a government-to-government level and not yet official.

The Motion Picture Assn. persuaded the Office of the U.S. Trade Representative to take action against China through the World Trade Organization over intellectual property protection and market access two years ago. China was outraged that film import quotas, blackout periods (when only local films show) and other restrictions might be picked over by the WTO.

The WTO negotiations are intensely negotiated and often difficult to read because of the scale of issues under discussion. At the same time as the U.S. was accusing China of protectionism in the film world, the Chinese formally requested the WTO to set up an expert panel to investigate and rule whether a U.S. ban on Chinese poultry imports violates WTO regulations.

The officials spoke about the ruling on condition of anonymity because of confidentiality rules ahead of its publication.

The Associated Press contributed to this report.

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