A World Trade Organization ruling released on Wednesday has US businesses and officials claiming victory over China on intellectual property matters. However, it's far from clear how much it will help slow down copyright piracy in China.
In a 469-page report, a WTO panel found that Chinese law limits the ability of foreign firms to sell and distribute DVDs, music, books, software and other copyright-intensive material in the country. The panel described China's actions as "discriminatory," and it urged Beijing to bring its policies in line with its obligations to the WTO.
Officials from the Chinese Embassy in Washington weren't available for comment, but US Trade Representative Ron Kirk called the decision a "clear win" for "America's creative industries," noting that it will help US exporters and distributors obtain a foothold for their products in China. The Motion Picture Association of America, the Recording Industry Association of America and the Association of American Publishers are among the industry groups that have lauded the finding.
The report is the latest chapter in a complaint filed by the US against China in 2007, and the saga is not yet over. The WTO said some of the US' complaints were without merit, and both countries can appeal the panel's findings. While lawyers from all sides assess the report, it's worth taking a look at what it means for copyright protection in China and relations between Beijing and Washington.
The decision does not signal the end of copyright piracy in China. The WTO has nudged China to give foreign firms better access for certain copyrighted products; it's not ordering Beijing to clamp down on piracy, which has made much officially restricted Western media widely available in China. As long as there's money to be made in the manufacturing and selling of bootlegged CDs, movies and videogames, thieves will do it--regardless of market rules. And they'll always have lower prices than the legit Western merchandise.
Moreover, the appeals process and China's implementation of new market access policies could take anywhere from a year to 18 months, says James Bacchus, a former WTO official and attorney at Greenberg Traurig in Washington who represented an alliance of US industry groups in the case against China.
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