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U.S.-China trade dispute snares Hollywood - December 12, 2007

The retaliation many in Hollywood feared from China in response to the U.S. filing a formal complaint with the World Trade Organization over Beijing's alleged lax enforcement of intellectual property rights is apparently underway. U.S. and Chinese film executives said Tuesday that Beijing has been blocking all U.S. movies from Chinese screens for at least several weeks, costing U.S. distributors potentially tens of millions of dollars.
"Indications are very strong that if not a formal, then essentially an informal blockade of our product is beginning to take place," MPAA chief Dan Glickman said, adding that he expects the blockade to last at least several more months.

Even in the best of times, China typically permits only about 20 U.S. films into the country a year, often in heavily edited form. According to U.S. studio executives, however, China's Film Board has simply stopped responding to applications for approval.

Although no one in China is saying so officially, the blockade appears to be a response to the U.S. action in the WTO, a move spurred in part by intense lobbying by Hollywood.

One Chinese official, in fact, made it pretty clear what's going on. According to a report in the South China Morning Post (Hong Kong), one-day trade talks scheduled for Tuesday in Beijing were delayed by an hour by a "very heated discussion" between U.S. trade officials and Chinese Vice-Premier Wu Yi, known not all that affectionately in the West as China's "Iron Lady." US Commerce Secretary Carlos Gutierrez said Ms Wu had communicated "very strongly and very directly that she felt very uncomfortable" with the US WTO case, according to the Post.

The row comes at a very bad time for the studios, which are facing the possibility of crimped 2008/2009 release slates due to the current writers strike and the potential for more labor trouble ahead. Losing access to even the limited market in China at the same time certainly isn't going to make next year any easier.

It's unclear whether the movie blockade extends to DVD release, which have recently made inroads in the People's Republic, but stay tuned for updates.
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