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Beijing ‘Regrets,’ May Appeal the WTO Decision Declaring Art Trade Violations
August 13, 2009

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Geneva. China may appeal a World Trade Organization ruling that its limits on the sale of books, films and music from the United States are unfair.

“China will evaluate the WTO ruling, while not ruling out the possibility of appealing against that ruling,” Commerce Ministry spokesman Yao Jian said on Thursday. The nation “regrets” the decision, he said.

US President Barack Obama’s administration secured its first trade victory against China when the WTO said the limits violated global commerce rules. WTO judges largely sided with a United States complaint that accused China of making US companies sell copyright-protected products such as magazines, CDs and video games through state-approved or state-run businesses.

The ruling found against Chinese curbs on foreign producers of audiovisual goods that exempt domestic rivals.

The US film industry “won a major victory in its years-long battle to open the Chinese movie market,” Dan Glickman, head of the Motion Picture Association of America, said. The WTO decision “points a way forward that will begin to even the playing field in this important market.”

The issue is one of the main irritants in the US-China commercial relationship. Improvements in China’s protection of patents for products such as pharmaceuticals, auto parts and copyrights for movies and software may help US companies more than currency-policy changes, analysts said.

China should be asked “to bring the relevant measures into conformity with its obligations,” WTO judges said in a report.

The ruling stops short of a clear-cut US victory. Judges agreed with the Chinese argument that its criminal law was strong enough to deter piracy.

The United States failed to convince the panel that thresholds for criminal prosecution of people pirating copyrighted goods were so high they effectively allow sales of illegal items on a commercial scale.

China said after the complaints were filed that they would “severely damage” trade ties.

China’s copying of movies, music and software cost companies $2.2 billion in 2006 sales, according to an estimate by lobby groups representing Microsoft, Walt Disney and Vivendi. The US case included a complaint about Chinese censorship of music recording downloads such as those sold by Apple’s iTunes store.

Bloomberg