US Seeks WTO Probe Of Chinese Restrictions On Sale Of American Movies

Thursday, October 11th 2007, 7:45 am

By: News On 6

GENEVA (AP) _ The United States will ask for a formal investigation of Chinese restrictions on the sale of American movies, music and books, which would be the fourth World Trade Organization case Washington has launched against Beijing in little over a year.

The U.S. will request the establishment an investigative panel at an Oct. 22 meeting of the WTO's dispute settlement body, according to an agenda for the meeting released Thursday.

The case will be of particular interest to Hollywood studios, Apple Inc.'s iTunes store and other American media providers possibly suffering from the ``less favorable distribution opportunities'' in China that the U.S. has cited in its WTO complaint.

The WTO is already investigating three Sino-American trade disputes. Washington accuses China of illegally hindering the import of foreign auto parts, providing government subsidies to a number of Chinese industries, and effectively providing a safe haven for product piracy and counterfeiting through excessively high thresholds for criminal prosecution.

Facing a U.S. legal assault, China fired back last month by filing its own complaint over the antidumping duties the United States applies on Chinese paper imports, the first case initiated by Beijing against Washington in five years.

China has the right to block the WTO investigation later this month. But it cannot delay the panel's establishment a second time under WTO rules, meaning the investigation will most likely be authorized next month.

The U.S. held consultations with China in June and then again in July, after the U.S. expanded its complaint to include Chinese rules on music downloading and cinema rights that appeared to discriminate against foreign sound recordings and films.

Washington first brought the case to the WTO in April alongside its complaint over rampant product piracy in China, alleging that Beijing had failed to remove import and distribution restrictions on copyrighted U.S. goods including newspapers, magazines, CDs, DVDs and video games.

For some products, distribution is limited to Chinese state-owned companies, the U.S. said. For others, foreign companies face censorship rules that do not extend to Chinese competitors.

The U.S. government has brought a series of complaints to the global commerce body since last year amid pressure from Congress to do something about America's soaring trade deficits and lost manufacturing jobs, which critics blame in part on unfair trade practices by foreign nations.

The U.S. trade deficit set a record for the fifth consecutive year in 2006 at $765.3 billion. The imbalance with China grew to $232.5 billion, the highest ever with a single country.

A first WTO decision is expected late this year or early 2008 on claims by the U.S. and the 27-nation European Union that China maintains an illegal tax system to block imports of foreign-made auto parts into China. That case was launched as a five-year transition period following Beijing's 2001 entry into the WTO ended.

In August the global commerce body set up a panel to rule on U.S. and Mexican allegations over Chinese industrial subsidies. The WTO established another last month to examine Washington's claim that China has failed to honor its intellectual property commitments. Rulings in both disputes are not expected until next year.