According to a new decision, the Chinese government isn't playing by the World Trade Org's rules.
For years now, China has turned a blind eye to piracy when illegally distributed media fail the government censors' "content review" standards (which supposedly weed out crude, sexual, or seditious content). A dispute settlement panel has found that the policy violates Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, and will order China to amend the law and (in theory) prosecute the country's numerous large-scale piracy operations, barring any changes to the ruling during the appeals process.
"We welcome the Panel's clarification of China's obligation to provide for criminal procedures and penalties to be applied to willful trademark counterfeiting and copyright piracy," said acting U.S. trade rep Peter Allgeier.
Content review has long been a sticking point in U.S.-China trade relations. Chinese officials assert that only they are capable of deciding what content is appropriate, adding a large bureaucratic hurdle to the release of films, albums, and television shows overseas.
Since joining the WTO in 2001, the country's lawmakers have been torn between a desire to control the nature of the foreign material that enters their country and a desire to profit from a successful trade relationship with U.S.-based media companies. The U.S. brought the content review dispute before the WTO in Sept. 2007 after years of unsuccessful negotiations over the process.
If the Chinese government loses the appeals process and still refuses to amend the law, the WTO will lay out the ways in which the U.S. is allowed to retaliate.
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