Wednesday, August 12, 2009

Is China ready to comply with WTO decisions?

Wednesday's decision by the World Trade Organization that China had improperly imposed limits on imports of books, music recordings and movies adds to the pressure on Beijing to start complying with international standards in its economic dealings with the rest of the world. In a decision delayed nearly a year, the WTO panel found that China violates international rules with import limits and by requiring all such imported products to go first to state-owned enterprises before being sold to consumers. "Foreign individuals and enterprises, including those not invested or registered in China, are accorded treatment less favorable than that accorded to enterprises in China with respect to the right to trade,” the WTO panel said in its decision, according to the New York Times. The ruling, which came on a complaint filed by the Bush administration in 2007 after pressure from Congress to resolve inequities in the U.S.-China trade relationship, could begin to force China to lift restrictions on imports and be more aggressive in enforcing copyrights from other countries. Chinese consumers can buy copies of pirated copies of U.S.-made books, music and movies at severely discounted products, the Times said. But knowledgeable observers said any change in Chinese policies is likely to take years, if at all. Ron Kirk, the U.S. trade representative, said the decision “promises to level the playing field for American companies working to distribute high-quality entertainment products in China so that legitimate American products can get to market and beat out the pirates," according to the Times. But that's only if the Chinese government complies. China has lost two WTO rulings in the past 13 months -- on auto parts imports and counterfeiting protection -- and still has failed to comply, the Times said. “They’ve got a poor record of compliance. They keep filing appeals,” Lyle Vander Schaaf, a Washington, D.C. attorney who specializes in W.T.O. disputes, told the Times. China also has right to appeal the latest decision, and a statement of regret from the country's commerce ministry said it may challenge the decision. If China does appeal and loses, the United States has the right to impose trade sanctions under WTO rules. But, seriously, how likely is Washington to do that?

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