Ruling Opens Door for Merchants

WTO orders China to lower its import restrictions.

by staff writer
- Aug 14, 2009

China must loosen its restrictions on media imports, according to a ruling by the World Trade Organization earlier this week—which could make it easier for foreign merchants to access the country's large pool of consumers.

China's limits on the importation of foreign media violate international trade policy, the WTO maintains. Reportedly, China has several regulations in place—which include allowing no more than 20 foreign movies to play in the country's theaters each year—to prevent outside cultures from influencing its residents too heavily and to protect its own artists and actors. China also requires foreign media sellers to distribute films, music and books through "Chinese-owned entities." That must stop, says the WTO.

Officials also urged China to allow foreigners to sell their music online, directly to Chinese listeners.

"China's rules prohibited foreign companies from offering music downloads to computers and mobile phones directly to Chinese customers," notes a Boston Herald report. "That [WTO] decision could be a boon to Apple Inc. and its iTunes store."

According to the WTO, China's actions have gone against the pledges it made when it entered the organization in 2001 and the 1994 General Agreement on Tariffs and Trade.

The sale of bootlegged materials is reportedly a $2.2 billion-a-year industry in China

While U.S. officials say it will take time for Chinese leaders to comply with the ruling, it's a step in the right direction. U.S. Trade Representative Ron Kirk calls the ruling a "significant victory."

"These findings are an important step toward ensuring market access for legitimate U.S. products in the Chinese market, as well as ensuring market access for U.S. exporters and distributors of those products," Kirk notes.

Hand in hand with the order to lower import restrictions, WTO officials re-iterated the need for China to address the piracy problem in the country—action that is crucial to enabling foreign merchants to compete in the country. The sale of bootlegged materials is reportedly a $2.2 billion-a-year industry in China. Chinese officials have said they may appeal the decision, but in the meantime, they will not ignore the WTO's decision.

"China will never seek to advance its interests at the expense of others," China's Foreign Minister Yan Jiechi, tells Reuters, adding that the country is committed to international trade rules.

"This sort of thing is normal," adds Li Jian, a senior researcher in China's Ministry of Commerce, in a Los Angeles Times article. "I think both governments are willing to improve the trade relationship. Even when there's conflict, I think they would prefer to negotiate."

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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