[2010-2011 WTO Case Review Series No.3]
China—Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (WT/DS363/R, WT/DS363/AB/R): Can the Violation of Non-GATT Provisions be Justif

First, the WTO Panel and Appellate Body's report, China—Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, is the first ever interpretation on the obligation to grant trading rights in China's Protocol on WTO Accession. Second, through clarifying the scope to which the obligation is applied, they offer an important interpretation on the scope of "goods." Third, the Appellate Body's report has clearly found for the first time that GATT Article XX can be resorted to with respect to violations of non-GATT provisions. Fourth, they offered for the first time an interpretation of Article XX (a), which permits the justification of "measures necessary to protect public morals," and they touched upon a very sensitive issue, namely, WTO consistency of the ways to apply the censorship mechanism. Fifth, they interpreted that "sound recoding distribution services" in China's GATS Schedule extends to the distribution of sound recordings in electronic form. This policy discussion paper introduces the factual background and the findings of the reports, analyzes the reports' interpretation of WTO agreements including China's Protocol, and lastly examines what suggestions the reports may offer in terms of future disputes.