WTO Ruling a Victory for America's Creative Industries

Aug 14, 2009

On Wednesday, the World Trade Organization (WTO) rightly ruled against China's illegal practice of forcing U.S. owners of copyrighted materials to deal only with state-controlled distribution companies, an onerous requirement that drove up costs, hurt marketing, and created logistical nightmares for American filmmakers, musicians, and others who depend on intellectual property (IP) protections.

This was an important victory for the United States on many levels.  First of all, it was a win for America's creative industries and the millions of workers they employ.  This sector, which ranges from the movie and TV industries, to music, software, and printed works, depends heavily on copyrights to protect their "creations of the mind." 

The United States' creative industries not only employ millions of Americans, but they are a major engine of economic growth as well.  A July 2009 report released by the International Intellectual Property Alliance notes that in 2007, the value added by the core copyright industries was $889.1 billion, over  6% of U.S. GDP. The total core copyright sales in foreign markets was nearly $126 billion in 2007, an 8% increase over the prior year. These figures have been achieved despite China's unlawful practices and poor record of enforcement.
Second, it's a win for the WTO and the international community.  China may be the world's most populous country, but it also continues to be the largest source of the world's counterfeit and pirated products.  The WTO's order to remove the government's middlemen should not only help eliminate the additional costs and obstacles American firms have been saddled with, but it can help in the interim to  address a piracy problem that is rampant and exported abroad in staggering numbers that do great harm to our creative industries.

Third, the USTR wins praise for championing the protection of IP rights.  Ambassador Kirk came into office talking tough about enforcement, and building off the solid work of the Bush Administration, this ruling demonstrates that his team is delivering.  This victory is an important first step, and we hope the USTR and others in the administration will continue to defend IP and level the playing field for America's creative and other industries worldwide. 

The next step is for new, creative approaches to directly tackle the counterfeiting and piracy challenge in China.  The Customs and Border Protection and Immigration and Customs Enforcement Department announced earlier this year that China was, once again, the number one source country for counterfeit goods seized in the U.S., accounting for over 80 percent of the total domestic value of IP seizures.  The upcoming meeting of the Joint Commissions on Commerce and Trade this October provides an opportunity for both governments to make much -needed progress on this growing problem. 

At the end of the day, the WTO's decision against China demonstrates that copyrighted works should be granted the same protection from discriminatory trade actions as any other good.  Protecting IP is vital to fueling the engine of economic growth and creating jobs, and this important ruling helps safeguard the creativity that drives both.

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