Cultural Imports: Half Full or Half Empty?

GENEVA --- The United States has lodged a second request for the WTO to set up an expert panel to investigate and rule on its ongoing row with China over restrictions on the import and distribution of cultural goods such as books, music, magazines and DVDs. Under WTO rules, the request should have been automatically adopted during the current session of the world trade body but the action will be delayed because the WTO's Dispute Settlement Body has been indefinitely stalled after Taiwan objected to the appointment of a Chinese judge to the Appellate Body, the highest court within the world trade body.

The first American appeal for a WTO ruling was lodged on October 22, after formal discussions between the countries in June and July failed to resolve the dispute. The US claims Chinese restrictions on the import and distribution of cultural goods are harming American industries, authors and artists by giving IPR pirates the upper hand in the Chinese market.

China blocked the appeal and Chinese officials issued a statement expressing regret at the United States' actions, saying China has dutifully fulfilled its WTO obligations since it joined the body in 2001.
"Under our current commitments, every year China imports and distributes dozens of revenue-sharing films, half a million publications of various types, plus countless audiovisual products from different sources. These products therefore already have good access to the Chinese market," Chinese trade officials added.

This apparent contradiction in positions goes to the heart of how the USA and China view the trade in cultural products. China starts from the position of no imports (or exports) and counts upwards. By this account, China is significantly more open than ever before and there is much greater freedom in the sectors opened to direct foreign involvement under WTO rules. The USA, on the other hand, starts from the position of a free market and counts downward. From this perspective, several onerous restrictions remain, not least the stringent limits on the numbers of movies allowed to compete for the box office that remain lamentably low.

Given these opposing views, rather than WTO actions that have significant short term impact, we are more likely to see a slow drip drip towards the middle ground, possibly arriving one day at a situation in which China views the import of cultural products to be a glass 'half full' and the USA to be a glass 'half empty'. Even if the parties can reach agreement on that, for as long as China controls the taps on the ground, filling the glass up any further is likely to be just as hard.