. /.  WORLD TRADE  
ORGANIZATION   
WT/DS363/19 
11 May 2012  
 
(12-2542) 
 Original:   English 
  
 
CHINA – MEASURES AFFECTING TRADING RIGHTS AND 
DISTRIBUTION SERVICES FOR CERTAIN PUBLICATIONS 
AND AUDIOVISUAL ENTERTAINMENT PRODUCTS 
 
Joint Communication from China and the United States 
   The following communication, dated 9 May 2012, from the delegation of China and the 
delegation of the United States to the Chairperson of the Dispute Settlement Body, is circulated at the request of those delegations. 
 
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As noted at the meeting of the Dispute Settle ment Body on 22 February 2012, China and the 
United States have made progress toward a resolution of the dispute China – Measures Affecting 
Trading Rights and Distribution Services for Certai n Publications and Audiovisual Entertainment 
Products  (WT/DS363) as it relates to films for theatrical  release through preliminary arrangements set 
forth in a Memorandum of Understanding.  China and the United States would like to inform the Dispute Settlement Body that the Memorandum of Understanding includes the following key 
elements and that the opportunities provided by th ese elements are available to all WTO Members: 
 
1. China confirmed that enhanced format films (such as 3D and IMAX films) are not 
subject to the 20-film commitment set fo rth in the Additional Commitments under 
Sector 2.D. of its GATS Schedule and agreed that China will allow the importation of at least 14 enhanced format  revenue-sharing fi lms per calendar year beginning in 
2012. 
 
2. China agreed that, in a contract for the distribution of an im ported revenue-sharing 
film, the producer of the imported revenue -sharing film will be allocated 25 percent 
of gross box office receipts, and the Chinese side shall be responsible for the payment 
of all taxes, duties and expenses.   
 
3. In a contract for the distribution of an imported film other th an a revenue-sharing 
film, where the two sides are not both priv ate enterprises, China agreed that the 
contract will be based on commercial terms, consistent with the terms prevailing in 
countries whose markets are comparable to  China’s market based on annual box 
office revenue, number of screens, annual admissions and admissions per screen. 
 4. China confirmed that any Chinese enterprise is  eligible to apply for and be granted a 
license to distribute imported films and that nothing in China’s laws, regulations or government rules prevents any eligible  Chinese enterprise from applying for and 
receiving a license to distribute, and operati ng as a distributor of, these films.  China 
further agreed that it will promote reform in the distribution of imported films and WT/DS363/19 
Page 2  
 
  will actively encourage more Chinese enterp rises, including private enterprises, to 
obtain licenses and to participate in the distribution of these films. 
 5. China agreed that the licensing of distributors would be conducted in a non-
discretionary and non-discriminatory manner, that contracts for the distribution of 
imported films would reflect standard i ndustry practices, and that other Chinese 
government policies or practices would not undermine the provisions of the Memorandum of Understanding. 
 6. After five years, China and the United Stat es will engage in consultations regarding 
key elements of the Memorandum of Unde rstanding and to discuss the matter of 
China implementing the DSB’s recommendations and rulings with regard to films in 
DS363. 
 
We request that you circulate this information to the Members of the Dispute Settlement Body. 
 
 
For China: 
    
(Signed) 
Yi Xiaozhun 
Ambassador
 For the United States: 
    
(Signed) 
Michael Punke 
Ambassador
 
 
 
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