Top trade judges on Monday rejected a Chinese appeal against a World Trade Organization ruling that said many of its curbs on foreign films, books and other cultural products violate open trading rules.
The decision — turning down Chinese complaints that an original WTO panel had erred in backing much of a case brought by the United States against the restrictions — made no recommendation on how China should now handle the issue.
U.S. Trade Representative Ron Kirk called the ruling a "big win" for the United States and U.S. filmmakers, recording companies and book publishers frustrated by widespread piracy in China and their difficultly selling legitimate products.
"U.S. companies and workers are at the cutting edge of these industries, and they deserve a full chance to compete under agreed WTO rules," Kirk said.
"We expect China to respond promptly to these findings and bring its measures into compliance."
The judges from the WTO's Appellate Body said that China had produced no evidence that the panel was wrong in any of its findings against Beijing in a case some commentators have linked to the communist state's censorship practices.
But they also turned down a U.S. appeal against part of the panel's ruling — that China could fairly claim that its strict controls on firms importing printed material were aimed at protecting public morals.
The appeal ruling comes at a time of growing concern among U.S. companies about China's respect for intellectual property.
Washington had argued that China's controls on cultural imports robbed U.S. publishers, Hollywood and entertainment multinationals of the chance to make substantial sales, leaving the way open for local pirates to sell counterfeit copies.
The 18-page Appellate Body ruling, couched in legal and technical terminology, is the final word from the WTO's dispute settlement system on the case, and cannot be appealed.
China launched its appeal against the panel report on Sept. 22, just before the deadline ran out. Chinese officials said the original finding had been "improper."
There was no immediate comment from Chinese officials on Monday in Geneva on the Appellate Body decision. U.S. officials said a statement was expected from Washington shortly.
Bringing the case, the United States argued that the restrictions imposed by China violated not only the WTO's open trading rules but also the terms of China's admission to the trade body in 2000 after years of negotiations.
U.S. officials said the Chinese measures were a barrier to U.S. products in the vast Asian market at a time when the U.S. trade deficit with China — $103 billion in the first half of 2009 — remained high despite a recent decline.
Earlier in the day, the WTO's Dispute Settlement Body had set up a panel in a case brought by the United States, the European Union and Mexico over Chinese restrictions on exports of a range of raw materials.
That panel will start hearing in January and is likely to issue its findings in the summer.
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