Skip to Content

Notice

WTO Dispute Settlement Proceeding Regarding China-Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble

AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice; request for comments.

SUMMARY:

The Office of the United States Trade Representative (USTR) is providing notice that the United States has requested, in accordance with the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement), that the WTO Dispute Settlement Body establish a dispute settlement panel to review the U.S. claims concerning: (1) Certain measures that restrict trading rights with respect to imported films for theatrical release, audiovisual home entertainment products (e.g., video cassettes and DVDs), sound recordings, and publications (e.g., books, magazines, newspapers, and electronic publications); (2) certain measures that restrict market access for, or discriminate against, foreign suppliers of distribution services for publications, foreign suppliers of audiovisual services (including distribution services) for audiovisual home entertainment products, and foreign suppliers of sound recording distribution services; (3) certain measures that provide less favorable distribution opportunities for imported films for theatrical release than for like domestic films; and (4) certain measures that provide less favorable opportunities for foreign suppliers of sound recording distribution services and for the distribution of imported sound recordings than are provided to like service suppliers and like products. The panel request may be found at http://www.wto.org contained in a document designated as WT/DS363/5. USTR invites written comments from the public concerning the issues raised in this dispute.

DATES:

Although USTR will accept any comments received during the course of the consultations, comments should be submitted on or before December 21, 2007 to be assured of timely consideration by USTR.

ADDRESSES:

Comments should be submitted (i) electronically, to FR0708@ustr.eop.gov, with “China Trading Rights and Distribution Services (DS363)” in the subject line, or (ii) by fax, to Sandy McKinzy at (202) 395-3640, with a confirmation copy sent electronically to the electronic mail address above, in accordance with the requirements for submission set out below.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Probir Mehta, Assistant General Counsel, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC, (202) 395-3150.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Pursuant to Section 127(b) of the Uruguay Round Agreements Act (URAA) (19 U.S.C. 3537(b)(1)), USTR is providing notice that the United States has requested the WTO Dispute Settlement Body to establish a dispute settlement panel pursuant to the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). Such panel, which would hold its meetings in Geneva, Switzerland, would be expected to issue a report on its findings and recommendations within approximately nine months after it is established. Start Printed Page 63212

Major Issues Raised by the United States

The first matter on which the United States has requested the establishment of a WTO dispute settlement panel concerns certain measures of China that reserve to certain Chinese state-designated and wholly or partially state-owned enterprises the right to import films for theatrical release, audiovisual home entertainment products (e.g., video cassettes and DVDs), sound recordings, and publications (e.g., books, magazines, newspapers, and electronic publications). In this regard, the measures at issue include the following, as well as any amendments and related or implementing measures:

  • The Regulations on Administration of the Films Industry;
  • The Provisional Rules on the Entry Criteria for Operating Film Enterprises;
  • The Administrative Regulation on Publishing;
  • The Administrative Regulations on Audiovisual Products;
  • The Catalogue for Guidance of Foreign Investment Industries;
  • The Several Opinions of the Ministry of Culture, State Administration of Radio, Film and Television, General Administration of Press and Publication, National Development and Reform Commission and the Ministry of Commerce on Introducing Foreign Investment into the Cultural Sector;
  • The Measures for the Administration of Import of Audio and Video Products;
  • The Measures for Administration of Chinese Foreign Contractual Distribution Ventures of Audiovisual Products;
  • The Administrative Regulations on Electronic Publications; and
  • The Procedure for Examination and Approval of Establishment of Publication Importation Entities.

It appears that these measures do not allow all Chinese enterprises and all foreign enterprises and individuals to have the right to import the Products into the customs territory of China. It also appears that 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. These measures appear to USTR to be inconsistent with China's obligations under paragraphs 1.2, 5.1 and 5.2 of Part I of the Protocol on the Accession of the People's Republic of China (Accession Protocol) and Article XI:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994).

The second matter on which the United States has requested the establishment of a WTO dispute settlement panel concerns certain measures of China that impose market access restrictions or discriminatory limitations on foreign service providers seeking to engage in the distribution of publications, certain audiovisual home entertainment products, and sound recordings. In this regard, the measures at issue include the following, as well as any amendments and related or implementing measures:

  • The Administrative Regulation on Publishing;
  • The Administrative Regulations on Audiovisual Products;
  • The Provisions on Guiding the Orientation of Foreign Investment;
  • The Catalogue for Guidance of Foreign Investment Industries;
  • The Several Opinions of the Ministry of Culture, State Administration of Radio, Film and Television, General Administration of Press and Publication, National Development and Reform Commission and the Ministry of Commerce on Introducing Foreign Investment into the Cultural Sector;
  • The Administrative Regulations on Management of Foreign-Invested Book, Magazine and Newspaper Distribution Enterprises;
  • The Administrative Regulations on the Publication Market (revised);
  • The Administrative Regulations on Electronic Publications;
  • The Administrative Measures on Subscription of Imported Publications;
  • The Procedure for Examination and Approval of Establishment of Chinese-Foreign Entities, Cooperative Joint Ventures, and Wholly Foreign Owned Publication Distribution Enterprises;
  • The Measures for Administration of Chinese Foreign Contractual Distribution Ventures of Audiovisual Products;
  • The Interim Regulations on Internet Culture Administration;
  • The Circular of the Ministry of Culture on Relevant Issues of Implementation of the Interim Regulations on Internet Culture Administration; and
  • The Several Opinions on the Development and Regulation of Network Music.

It appears that these measures prohibit foreign service suppliers (including wholly or partially foreign-owned or foreign-invested enterprises) from engaging at least in certain types of distribution of publications and audiovisual home entertainment products within China. In addition, to the extent that some foreign service suppliers are allowed to engage in some aspects of the distribution of publications, there appear to be discriminatory requirements concerning such suppliers' registered capital, such suppliers' operating term, and the particular publications that such suppliers may distribute. The measures at issue also appear to establish different distribution opportunities for imported and domestically produced books, newspapers, and periodicals; imported books, newspapers and periodicals are restricted in their distribution opportunities. Furthermore, to the extent that foreign services suppliers are permitted to engage in any distribution of audiovisual home entertainment products, the measures at issue appear to impose requirements that the service be supplied through a form of entity that Chinese persons control, or in which Chinese persons have a dominant position, or for which there is a limitation on the participation of foreign capital.

Moreover, the measures at issue appear to prohibit any foreign-owned or foreign-invested entity from obtaining the licenses necessary to engage in certain types of “internet cultural products,” including sound recordings in digital form. In addition, to the extent that foreign service suppliers can engage in the distribution of sound recordings in digital form, the measures at issue appear to provide that any “imported” music is subject to content reviews by the Chinese Government before digital distribution. However, music in which rights are held by Chinese enterprises without foreign investment is not subject to such content review before digital distribution within China. Consequently, the measures at issue appear to accord foreign suppliers of sound recording distribution services less favorable treatment than that accorded to Chinese suppliers of sound recording distribution services.

The foregoing measures appear to USTR to be inconsistent with China's obligations under paragraphs 1.2 and 5.1 of Part I of the Accession Protocol, Article III:4 of the GATT 1994, and Articles XVI and XVII of the General Agreement on Trade in Services (GATS).

The third matter on which the United States has requested the establishment of a WTO dispute settlement panel concerns certain measures that provide distribution opportunities for imported films for theatrical release that are less favorable than the distribution opportunities for domestically produced films for theatrical release.

In this connection, the measures at issue include the following as well as Start Printed Page 63213any amendments, related measures, or implementing measures:

  • The Regulations on the Administration of the Films Industry;
  • The Provisional Rules on the Entry Criteria for Operating Film Enterprises; and
  • The Provisional Specific Implementing Rules for Reforming Film Distribution and Exhibition.

It appears that these measures establish a dual distribution system for imported and domestically produced films for theatrical release. Imported films can be distributed within China only by two entities, each of which operates on a nationwide basis. By contrast, domestically produced films can be distributed not only by those same two entities, but also by many other entities, including entities that operate on a local, provincial or other subnational basis.

Accordingly, the measures at issue appear to be inconsistent with China's obligations under the provisions of paragraphs 1.2 and 5.1 of Part I of the Accession Protocol and Article III:4 of the GATT 1994.

The fourth matter on which the United States has requested the establishment of a WTO dispute settlement panel concerns certain measures that provide less favorable distribution opportunities for sound recordings imported into China in physical form than for sound recordings produced in China.

In this regard, the measures at issue include the following, as well as any amendments and related or implementing measures:

  • The Interim Regulations on Internet Culture Administration;
  • The Circular of the Ministry of Culture on Relevant Issues of Implementation of the Interim Regulations on Internet Culture Administration;
  • The Catalogue for Guidance of Foreign Investment Industries;
  • The Several Opinions of the Ministry of Culture, the State Administration of Radio, Film and Television, the General Administration of Press and Publication, the National Development and Reform Commission and the Ministry of Commerce on Introducing Foreign Investment into the Cultural Sector; and
  • The Several Opinions on the Development and Regulation of Network Music.

These measures appear to require that sound recordings imported into China in physical form but intended for digital distribution must undergo content review by the Chinese Government prior to such distribution within China. However, domestically produced sound recordings appear not to be subject to this requirement, but can instead be digitally distributed immediately. It thus appears that sound recordings imported into China in physical form are treated less favorably than sound recordings produced in China in physical form.

The foregoing measures appear to USTR to be inconsistent with China's obligations under provisions of paragraphs 1.2 and 5.1 of Part I of the Accession Protocol and Article III:4 of the GATT 1994.

Public Comment: Requirements for Submissions

Interested persons are invited to submit written comments concerning the issues raised in the dispute. Comments should be submitted (i) electronically, to FR0708@ustr.eop.gov, with “China Trading Rights and Distribution Services (DS363)” in the subject line, or (ii) by fax, to Sandy McKinzy at (202) 395-3640, with a confirmation copy sent electronically to the electronic mail address above.

USTR encourages the submission of documents in Adobe PDF format as attachments to an electronic mail. Interested persons who make submissions by electronic mail should not provide separate cover letters; information that might appear in a cover letter should be included in the submission itself. Similarly, to the extent possible, any attachments to the submission should be included in the same file as the submission itself, and not as separate files.

Comments must be in English. A person requesting that information contained in a comment submitted by that person be treated as confidential business information must certify that such information is business confidential and would not customarily be released to the public by the commenter. Confidential business information must be clearly designated as such and “BUSINESS CONFIDENTIAL” must be marked at the top and bottom of the cover page and each succeeding page. Persons who submit confidential business information are encouraged also to provide a non-confidential summary of the information.

Information or advice contained in a comment submitted, other than business confidential information, may be determined by USTR to be confidential in accordance with section 135(g)(2) of the Trade Act of 1974 (19 U.S.C. 2155(g)(2)). If the submitter believes that information or advice may qualify as such, the submitter—

(1) Must clearly so designate the information or advice;

(2) Must clearly mark the material as “SUBMITTED IN CONFIDENCE” at the top and bottom of the cover page and each succeeding page; and

(3) Is encouraged to provide a non-confidential summary of the information or advice.

Pursuant to section 127(e) of the URAA (19 U.S.C. 3537(e)), USTR will maintain a file on this dispute settlement proceeding, accessible to the public, in the USTR Reading Room, which is located at 1724 F Street, NW., Washington, DC 20508. The public file will include non-confidential comments received by USTR from the public with respect to the dispute; if a dispute settlement panel is convened or in the event of an appeal from such a panel, the U.S. submissions; the submissions, or non-confidential summaries of submissions, received from other participants in the dispute; the report of the panel; and, if applicable, the report of the Appellate Body. The USTR Reading Room is open to the public, by appointment only, from 10 a.m. to noon and 1 p.m. to 4 p.m., Monday through Friday. An appointment to review the public file (Docket WTO/DS-363, China Trading Rights and Distribution Services Dispute) may be made by calling the USTR Reading Room at (202) 395-6186.

Start Signature

Daniel Brinza,

Assistant United States Trade Representative for Monitoring and Enforcement.

End Signature End Supplemental Information

[FR Doc. E7-21962 Filed 11-7-07; 8:45 am]

BILLING CODE 3190-W8-P