WTO Upholds A/V Products Decision

2009-12-22

Chalk up a win for the US Trade Representative folks. The WTO appellate body announced today that they upheld the panel decision, which went against China (for the most part) with respect to the importation and distribution of copyrighted products, including movies, music and books.

Once again, let me point out that this does not mean the end to censorship, it will just mean a further opening of the import and distribution sector.

Just to gloat a bit (I don't get the chance very often), and also for background, here is an excerpt from my post on the appeal back in September. It includes links to my original stuff on the panel decision.

[F]iling an appeal will buy Beijing some time before they have to do some restructuring to their import and distribution regime.

No secret here if you’ve read my other posts on this case (Part I, Part II) — I think on the main portion of the dispute, China had a very tough position to defend.

In effect, they had to argue that they needed to restrict foreign enterprises from importing and distributing certain entertainment products, including music and movies, because of censorship concerns. The obvious rejoinder to that, “But censorship and importation/distribution are completely separate things,” went essentially unchallenged by China.

I have no idea what the appeal entails. Again, they will certainly buy themselves some time, and an appeal always looks good to the home crowd (”We’re vigorously protecting your interests”), but I doubt that aside from some technical victories, a major win will be forthcoming.

The USTR has a statement out already, which includes the following comment with which I disagree:

"This case is also an important part of our efforts to combat intellectual property piracy," Ambassador Kirk noted. "The panel and Appellate Body findings ensure that legitimate American products are granted market access so that they can get to market and beat out the pirates. This finding helps to ensure that America's creative ingenuity and innovation are protected abroad."

Yeah, see, I've said this many, many times on this blog. Industry's argument that if only the Chinese public was given the freedom to pay for a legal copy of all that Hollywood had to offer, it would gladly do so — is crap.

You could lift the import restrictions tomorrow (i.e. the quota) and it wouldn't change shit. People here can buy good quality pirated versions for either less than a dollar (on disc) or for free (online). How will lifting the import quotas help Hollywood compete with those business realities in the face of lax IP enforcement?

This WTO decision is indeed a victory for US media companies, but as usual, they are pushing an unsustainable theory of the Chinese marketplace. Why can't they be satisfied with this win and admit to its limitations?

Tags: China Law, U.S.-China Relations