WTO to mull China options

Country doesn't free up movie market by deadline

HONG KONG — The World Trade Organization will discuss China’s failure to meet last week’s deadline to implement its ruling against restrictions on foreign companies distributing copyrighted goods including movies, DVDs and music.

Hollywood had welcomed the 2009 ruling because it looked set to open up the potentially huge Chinese market to U.S. product, but the March 19 deadline passed without any change.

“We are disappointed China did not fulfil its commitment,” Greg Frazier, executive VP and policy chief of the Motion Picture Assn. of America said in a statement. “We understand, however, that the Chinese authorities are working to comply with the WTO’s ruling and that the U.S. government is actively engaged with the Chinese government to ensure that China meets its commitment.”

The MPAA believes China’s restrictions on the distribution of legitimate movies, music and other copyrighted goods creates enormous demand for pirated copies sold on the Internet and on the street, costing billions of dollars every year.

The WTO’s Dispute Settlement Body is scheduled to discuss the matter on Friday.

Membership of the WTO, which China joined in 2001, has transformed the country’s trading environment, opening up new markets for Chinese products but also forcing the country to deal with competition from overseas.

The WTO says China’s system of importing and distributing books and movies breaches international trade rules and it requires that China must increase foreign access to the domestic movie market.

Many in the homegrown market welcome the challenge, as Chinese movies had a record-breaking year last year, bringing in box office worth $1.5 billion.

There is currently a quota of about 20 foreign movies allowed into China every year on a revenue-sharing basis, although overseas studios prefer flat fees as a big hit can make more money. This means a lot of countries are fighting over the small number of slots — France won six of the 20 slots last year, for example. A further 40 films per year can be imported on a flat-fee basis.

These movies are distributed by the powerful China Film Group, which produces and distributes most films in China, alongside Huaxia Group.

In theory, the new ruling meant that foreign companies can use private distributors to get their movies onto Chinese screens.

The WTO’s extremely detailed and complicated ruling is difficult for China to argue against. It found that China was contravening the fundamental WTO rule requiring equal treatment between local and foreign businesses, and breaching commitments made when it joined the WTO in 2001 to open up sales and distribution within three years.

U.S. trade representative at the time, Ron Kirk, characterized the ruling as “a big win” for American companies.

More Film

  • Ariel Winograd'TOD@S CAEN' film premiere, Los

    Viacom International Studios Signs First Look Deal with Ariel Winograd (EXCLUSIVE)

    MADRID  — Adding to a powerful and still growing talent roster, Viacom International Studios (VIS) has clinched a first-look deal with Argentine writer-director Ariel Winograd whose latest movie, “The Heist of the Century,” has just become one of the biggest Argentine openers in history. The multi-year pact takes in the development and production of not [...]

  • William Bogert Dead: 'Small Wonder' Actor

    William Bogert, Who Appeared in 'War Games,' 'Small Wonder,' Dies at 83

    TV, film and theater actor William Bogert, who appeared in a recurring role on 1980s sitcom “Small Wonder” and in films such as “War Games,” died Jan. 12 in New York. He was 83. On “Small Wonder,” which ran from 1985 to 1989, Bogert played Brandon Brindle, the Lawsons’ neighbor and Harriet’s father who became [...]

  • 1917 Movie

    Why '1917' Is the Last Film That Should Be Winning the Oscar (Column)

    There’s a feeling I always get at the end of a long Oscar night when the movie that won isn’t a terrible choice, but it’s the safe, blah, MOR predictable choice, the one that conforms to the dullest conventional wisdom about the kinds of movies Oscar voters prefer, because in the core of their being [...]

  • Civil Rights Drama 'Praying for Sheetrock'

    Civil Rights Drama 'Praying for Sheetrock' in the Works as Feature Film (EXCLUSIVE)

    Enderby Entertainment is developing a feature film based on Melissa Fay Greene’s civil rights drama “Praying for Sheetrock,” Variety has learned exclusively. The non-fiction book, published in 1991, was a finalist for the National Book Award and won the Robert F. Kennedy Book Award, Chicago Tribune Heartland Prize, Georgia Historical Society Bell Award and the ACLU National Civil [...]

  • Jared Harris arrives at the 26th

    No, Jared Harris is Not Playing Doctor Octopus in Marvel's 'Morbius'

    The first-ever trailer for Marvel and Sony’s next Spider-man spinoff “Morbius” left comic book fans reeling with theories. While the plight of the main character, Dr. Michael Morbius (Jared Leto) – a scientist dying of a rare blood disease who accidentally turns himself into a vampire – seemed ripped right out of the comics, the [...]

  • SAG Awards 2020: What You Didn't

    SAG Awards 2020: From Charlize Theron to 'Parasite,' What You Didn't See on TV

    Brad Pitt made a crack about his marriages. Robert De Niro got political. And Jennifer Aniston talked about appearing in a commercial for Bob’s Big Boy. Those were just some of thing that happened on stage at the SAG Awards that were broadcast on TNT/TBS on Sunday night. However, Variety was inside the Shrine Auditorium [...]

More From Our Brands

Access exclusive content