Frankly, My Dear America, We Don’t Give a Damn: Comparing Chinese And European Trade Barriers to American Audiovisual Works and the American Response

IntroductionChina began 2012, the year of the Dragon,1 with a fiery blow to the nation's television programming.2 In February 2012, the Chinese State Administration of Radio, Film and Television (SARFT) announced a new set of regulations which prohibits the showing of imported pro- grams during prime time and requires channels to fill at least seventy- five percent of their total airtime with Chinese programming.3 The regulations send a message to Western television producers: in China, there is no business for show business.4Hollywood producers are, however, no strangers to burdensome regulations restricting the importation and distribution of audiovisual products within China.5 In 2007, the United States brought a complaint before the World Trade Organization (WTO) against China for its dis- criminatory importation and distribution structure for foreign films.6 Chinese regulations not only deprive American enterprises of the abil- ity to compete for box office revenues, they also prompt widespread piracy of American works throughout China, costing the American film industry billions of dollars each year.7 In 2009, in China-Measures Af- fecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (China-Measures Affecting Trading Rights), the WTO Panel and Appellate Body found in part that China's current distribution system, which allows only authorized distributors to import films into China for theatrical release and distribution, violates China's trade obligations under the Chinese Accession Protocol and Accession Working Party Report.8 The WTO gave China two years to restructure its distribution system, a deadline China ultimately failed to meet.9 Though they restrict TV programming rather than feature films, the new SARFT regulations indicate the Chinese government's contin- ued hostility toward foreign audiovisual works and its unwillingness to liberalize trade in these markets.10In contemplating how to proceed in the face of China's non- compliance with the WTO ruling, America should also consider why it has not aggressively challenged similar economic restrictions in place in other countries.11 Over the past century, various countries have erected trade barriers against American film and television programming in the forms of national subsidies and local content quotas.12 Most notably, the European Union (EU) enacted Television Without Frontiers, a Di- rective requiring all member states to reserve a majority of their TV air- time for works produced in Europe (the local content requirement).13 Although several compelling arguments have indicated that the Euro- pean treatment of American film and TV programming violates various WTO agreements, the United States has not followed through with formal action against the EU.14The purpose of this Note is to explore the distinctions between the Chinese and European treatment of American audiovisual works that have prompted the United States to take an aggressive stance against the former but not the latter. Part I begins with a brief discussion of the significance of the American audiovisual industry. It also describes the relevant trade restrictions in place in China and the EU and the eco- nomic impact of these restrictions upon the American film and televi- sion industries. Part II outlines the United States' legal arguments against both the Chinese and European restrictions and discusses the 2009 WTO ruling condemning China's treatment of films imported for theatrical release. Part III analyzes the legal, cultural, economic, and philosophical differences underlying Chinese and European impedi- ments to American audiovisual works. Part III suggests that the United States has an equally compelling WTO case against the EU and has only failed to fully pursue such a case out of a sense of pragmatism. It fur- ther suggests that if the United States wants to maintain its place as the world's leading provider of audiovisual entertainment and to preserve the integrity of the free trade agreements to which it is a party, it should take a uniformly aggressive legal stance against foreign barriers to au- diovisual trade. …