Time Magazine: WTO Ruling Will Force China to End Its Quota on Foreign Films

May 27, 2011

If you include this post, I have written on this topic 357 times, and I have apologized for the repetition at the beginning of the last 215 posts. Those numbers might be off slightly, but they feel right. Here are a few of the links. This is quickly becoming an unhealthy obsession.

Since I’m jet lagged and received some extremely bad news this morning, perhaps a short rant will cheer me up.

As you no doubt recall, the US took China to the WTO back in 2008 regarding promises China made with respect to distribution and importation of certain entertainment products, including theatrical films. The US won the case, China appealed, and the US prevailed on the appeal as well.

The panel’s decision basically said that China must open up the film market to foreign distributors and importers. China’s quota for foreign movie imports was a big part of the case, but not in the way that a lot of folks think. China made several arguments as to why they could not open up importation to non-State owned firms. For example, they said that the sensitive nature and complexity of the censorship and quota regimes wouldn’t work with foreign firms in the mix. The panel rejected that and other arguments.

However, the legality of China’s censorship and quota systems were never at issue; at one point, I believe the report stated (either explicitly or implicitly — I can’t remember which) that such schemes were not inconsistent with WTO law.

Since the report came out, I’ve been fighting an ongoing battle with lazy and misinformed members of the media who insist on writing the same thing over and over again: that the panel found China’s film quota system to be in violation of WTO law. Wrong, wrong, wrong!

I wrote this a year ago:

The reason I wrote that to begin with is that some reporters and commentators, at the outset, were already mangling their writeups of the case. When some folks see the word “censorship” they tend to froth at the mouth and stop paying attention to the actual argument. When asked about what they read later, the answer will be “it was about discontinuing censorship.”

Similarly, if the words “movie” and “import” are in the same document, the assumption is that quotas are being discussed. Reading the actual document would have disabused folks of that notion, but after all, it was a 500 page panel decision that was full of a lot of legal jargon.

Just in case you’ve read about this issue, have bought into this notion that the film quota was somehow abolished by the WTO, and think I’m hopelessly misinformed, you can read an even better post on the issue by a genuine China law guru, Berkeley professor Stanley Lubman. With respect to the film quota issue specifically, he said:

Even if China were to comply fully with the WTO’s decision, it’s not clear how that compliance would affect the foreign film quota, which was not specifically addressed in the dispute.

So I’m not the only one with this opinion. And yet . . . we now have Time Magazine, specifically Erica Ho out of Hong Kong, failing to do the proper research before making an incorrect statement like the following:

A World Trade Organization ruling recently found that China’s 20-film quota violates international trade laws. China has agreed to lift the limit, and when it does, it has the potential to become an even bigger force than it already is.

On second thought, I apologize. There is not a single incorrect statement in that paragraph. There are actually three separate ones.

First, the ruling was not “recent.” The appellate report was issued in December of 2009. This is not breaking news, folks.

Second, again, the panel did not find that the quota violates international trade laws.

Third, China has not agreed to lift the limit. Even if the writer of this article got the part about quotas wrong, who the heck told her that China was going to do away with the quota? Psst, I think your sources suck.

As I wrote in my post on this topic a year ago: “Please don’t make me post on this topic again, for heaven’s sake.” I renew that plea.

FYI, the underlying article in Time written by Ms. Ho was fine. It was entitled “Can Hollywood Afford to Make Films China Doesn’t Like?” and was the usual speculation about how the rise of China is effecting the foreign film industry. Nothing new here, but a decent enough piece that was ruined, for me at least, by that last paragraph.