WTO Rules Against Chinese Import Limits

Posted by Reading Time: 2 minutes

Aug. 13 – The World Trade Organization (WTO) has ruled in favor of the United States on its complaint that China’s distribution restrictions on imported reading materials, audiovisual home entertainment products, DVDs, sound recordings and movies violated international free trade rules.

The ruling indicates that China has yet to totally comply to the rules it set out to follow when it became a member of the WTO in 2001. Foreign books, movies, newspapers and comic books imported to the country are required to go through state-controlled distributors; taking longer and adding to costs.

China  has the right to appeal on the trade ruling but it remains to be seen if it will lead to changes on its import rules. The slap on the wrist from the WTO will certainly not be ignored but the question is will it be followed.

According to the WTO report: “China acts inconsistently with its WTO obligations in the following three areas: China prohibits foreign companies and individuals, as well as private enterprises inside China, from importing reading materials, AVHE products, sound recordings and films for theatrical release.”

“China places unfair restrictions on foreign distributors of reading materials and AVHE products and prevents foreign distributors from engaging in the electronic distribution of sound recordings in China; and China uses an array of restrictive measures to discriminate against imported reading materials, sound recordings, and films for theatrical release in China.”

Beijing has been a supporter of the WTO because it helps avoid sanctions on its exports but a WTO trade ruling can only go so far as enact retaliatory trade rules against China. Even then, to reach that stage is not an overnight process. The procedure is lengthy and also will need China’s compliance.

Since being a member of the WTO in 2001, China has been a respondent of 16 trade complaint cases. Trade disputes are just one of the many pressing issues looming over Chinese authorities. Exports have dipped for the ninth month in a row and the government is scrambling for revenue to support its huge stimulus plan that’s currently keeping the economy growing.