U.S., China in 'heated' trade talks

Commerce secretary confirms ban on Hollywood films

U.S. trade negotiators confirmed Wednesday that the Chinese government has banned the import of Hollywood movies, a move apparently tied to the countries' ongoing battle over intellectual property rights.

"My understanding is that there is a suspension, which has happened in the past," Commerce Secretary Carlos Gutierrez told reporters during a break in the high-level "strategic economic dialogue" taking place in Xianghe, a suburb of Beijing.

He said the U.S. is lobbying China to end the ban.

"The problem we have with movies, with films, is that there's a limit … a quota on them, and we would like to get that lifted," Gutierrez said.

U.S. Trade Representative Susan Schwab and Gutierrez are meeting this week with outgoing Vice Premier Wu Yi for the 18th U.S.-China Joint Commission on Commerce and Trade. The countries' trade officials exchanged tough words about film and television piracy, market access, investment and product safety.

Wu, China's top negotiator, said some of the discussions had been "heated."

Gutierrez said the high-level talks began with strong objections from China over U.S. actions on intellectual property rights.

The Chinese government's action may be tied to a Bush administration decision this year to file a case against China at the World Trade Organization over failure to protect intellectual property. He said Wu said "she felt very uncomfortable" about the case.

The WTO opened an investigation in November into Chinese restrictions on the sale of U.S. movies, music and books after Washington's fourth commercial complaint against Beijing in a little more than a year.

A senior trade official said the U.S. had just become aware of the movie ban in recent weeks and hoped to persuade China to reverse it. The issue was raised on the sidelines at the economic dialogue talks, which wrap up today.

Despite the ban, pirated versions of the latest Hollywood hits are available on most street corners in Chinese cities, another area of contention between the two countries.

In the discussions at the government conference center, and in talks Tuesday in Beijing, it has been apparent that Chinese officials have bridled at times over the speed with which the U.S. has taken trade cases to court at the same time that Washington says it wants an expanded dialogue on trade issues.

MPAA chairman and CEO Dan Glickman said the trade group had not received official notification of the ban, but he decried any effort to further restrict legal U.S. films.

"If such action has been taken, or is in the process of being taken, it would represent an enormous step backwards in terms of China's efforts to develop a strong and, most importantly, legitimate film exhibition and distribution market," he said.

Glickman said he and other studio representatives were attempting to render any assistance necessary to U.S officials.

"If these reports are true, it is unacceptable that China has taken this action, and we will bring all our resources and leverage to bear to address this situation," he said.

Last week, Hollywood executives at a industry trade show in southern China said they heard that a further three-month ban on Hollywood movies was imminent.

Officials at state-run China Film Group dismissed the ban as a rumor.

WTO rules China agreed to when it joined in 2000 do not directly address film and television, and Wu accused U.S. interest groups of stirring up trouble, saying Tuesday, "We must oppose attempts to politicize trade issues."

Jonathan Landreth reported from Beijing; Brooks Boliek reported from Washington. The AP and Reuters contributed to this report.
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