December 12, 2007 / 9:47 AM / 10 years ago

U.S.-China trade strains hurt Hollywood movies

<p>A scene from DreamWorksParamount Pictures' "Transformers." Commerce Secretary Carlos Gutierrez said on Wednesday that China has stopped granting permission for U.S. movies to be shown in its theatres and the United States was trying to get the ban removed.DreamWorks Paramount Pictures/Handout</p>

XIANGHE, China (Reuters) - Even Hollywood is feeling the pinch from strains in U.S.-China trade relations.

U.S. Commerce Secretary Carlos Gutierrez said Wednesday that China has stopped granting permission for U.S. movies to be shown in its theatres and the United States was trying to get the ban removed.

"My understanding is that there is a suspension, which has happened in the past, and there's certain times of the year where they will suspend foreign movies," Gutierrez told reporters during a break in "strategic economic dialogue" talks taking place just outside Beijing.

The Chinese suspension wasn't publicly announced but the New York Times reported Wednesday it was widely suspected.

The chairman and chief executive officer of the Motion Picture Association of America, a trade group representing major U.S. film studios, called the ban an "enormous step backwards in terms of China's efforts to develop a strong and, most importantly, legitimate film exhibition and distribution market."

In his statement, Dan Glickman said the MPAA was working with top U.S. government officials to address the situation.

The newspaper said it might be Chinese retaliation against a U.S. decision earlier this year to file a case against China at the World Trade Organization over failure to protect intellectual property.

"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.

A senior U.S. trade official said the United States had just become aware of the 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 on Thursday.

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

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

Chinese Vice Premier Wu Yi said that some discussions in Beijing Tuesday had been "heated" and Health and Human Services Secretary Mike Leavitt said Wednesday that the Chinese felt "misunderstood."

Both sides agreed on one thing -- the media was to blame for some of their problems.

"There is a frustration the Chinese feel that they're not understood," Leavitt said. "It's a frustration that anyone who deals with the free media appreciates."

The United States and China reached agreement on a plan on Tuesday to increase the safety of food and other products imported from China, possibly by eventually putting some U.S. inspectors in China, but only after Wu said press reports exaggerated issues with Chinese-made goods.

"The U.S. media hyped about the quality of Chinese exports, causing serious damage to China's national image," Wu aid.

Reporting by Glenn Somerville; editing by Nick Macfie, Gary Hill

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