• by Enrique Gili (washington)
• Thursday, August 13, 2009
• Inter Press Service

Since 2001 China has become an increasingly active member of the World Trade Organisation (WTO) and proponent of open and competitive markets, but yesterday the WTO released a report saying that China has violated WTO protocols by restricting imports of DVDs, software and books and limiting the ability of foreign suppliers to distribute their own products in China.

The fact that the WTO has substantiated the accusations about China’s discriminatory trade practices highlights the double-edged sword which WTO membership has become for one of the world’s largest and fastest growing economies.

China faces the challenge of maintaining and increasing access to markets around the world in order to maintain its massive manufacturing based economy, but protectionism of its own domestic industries has - in the past - been a crucial component of China’s growth.

The WTO report - which is the culmination of a U.S.-led 2007 dispute claim - concludes that China violated WTO agreements by censoring or restricting the import of reading materials, films and music.

Chinese import barriers took the form of censorship or requiring manufacturers and distributors of copyrighted material to distribute through Chinese companies.

The 469-page report found that China’s policies were 'discriminatory' in that they put foreign firms at an unfair disadvantage for importing copyrighted materials.

'Today, a WTO panel handed a significant victory to America’s creative industries,' said U.S. Trade Representative, Ambassador Ron Kirk. 'These findings are an important step toward ensuring market access for legitimate U.S. products in the Chinese market, as well as ensuring market access for U.S. exporters and distributors of those products. We will work tirelessly so that American companies and workers can fully realise the market opening benefits that this decision signals.'

Industry groups most affected by the ruling include: The Motion Picture Association of America, the Recording Industry Association of America and the Association of American Publishers.

While the report did find a number of the complaints filed by the U.S. were legitimate, it did find some complaints lacked merit - specifically complaints claiming China’s laws covering piracy are inadequate. Both China and the U.S. might appeal the report’s findings.

The lack of an explicit condemnation of China’s enforcement of intellectual property laws - particularly with regards to pirated music, movies and software - is a setback for industries which have long sought to force China to more strictly enforce its existing copyright and intellectual property laws.

Beijing has not had a strong response to the report, but a statement released on China’s Ministry of Commerce website said that China was disappointed that the WTO had not rejected the U.S. complaint about the imports and distribution of foreign copyrighted materials.

'China has always fulfilled its obligations on market access for publications, and the channels for foreign publications, films and audio-visual products to enter the Chinese market are extremely open,' said Yao Jian, spokesperson for the Chinese Ministry of Commerce, according to Xinhua News Agency.

China’s membership in the WTO was seen as requiring considerable concessions from Chinese policymakers and younger, economic reformers had to fight hard to convince older leadership that opening the Chinese economy - in line with WTO rules - wouldn’t destroy domestic industries.

'The leadership was wiling to join the WTO on these terms since it had to deliver on economic growth and prosperity,' said Chair of Asian Studies and Professor of Applied Economics at Bates College Margaret Maurer-Fazio. 'The WTO could serve as a foil for unpopular policies. It gives the leadership some distance from difficult decisions that will hurt some people but have good long term benefits.'

China has increasingly used the WTO’s mechanisms to file its own complaints against WTO members who it feels are discriminating against Chinese imports.

On Jul. 31 China announced that it was filing a complaint with the WTO against the European Union (EU) for anti-dumping measures it had taken against Chinese iron and steel fasteners.

The EU will have 60 days to resolve the dispute through consultations, but if a resolution is not reached China can ask for a WTO panel to investigate the complaints and rule on whether the EU violated WTO rules.

© Inter Press Service (2009) — All Rights Reserved. Original source: Inter Press Service

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