CHINA – MEASURES AFFECTING TRADING RIGHTS AND DISTRIBUTION SERVICES FOR CERTAIN PUBLICATIONS AND AUDIOVISUAL ENTERTAINMENT PRODUCTS
Document: Joint Communication from China and the United States
Date: 11 May 2012
Document codes: WT/DS363/19
Complainant: U.S.
Respondent: China
Third parties: Australia, EU, Japan, South Korea, Taiwan
Dispute stage: Appellate Body
Agreements cited: Part I, para. 5.2  Protocol of AccessionArt. XI:1, III:4  GATT 1994Art. XVII, XVI  Services (GATS)Part I, para. 1.2, Part I, para. 5.1  Protocol of Accession

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.

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 these 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

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