In April 2007, the United States requested consultations with the Chinese government regarding certain measures restricting trading rights and distribution services of certain types of publications and audiovisual entertainment products. The United States alleged that China's statutory reservations—allowing only specific Chinese state-designated and wholly or partially state-owned enterprises the right to import films, audiovisual home entertainment products, sound recordings, and publications into Chinese territories—violated China's obligations under the WTO Protocol of Accession.
The United States further claimed that various other measures instituted by the Chinese government imposed market access restrictions or discriminatory limitations on foreign service providers seeking to engage in the distribution of publications and certain audiovisual home entertainment products. This unequal or less favorable treatment, the United States argued, amounted to violation of GATS, GATT 1994, and the Protocol of Accession.
In August 2009, a WTO panel concluded that China had acted inconsistently with the provisions of GATS, GATT 1994, and the Protocol of Accession. The panel recommended that the DSB request China to bring the relevant measures into conformity with its obligations under those agreements. Both China and the United States appealed the panel report to the WTO Appellate Body, which for the most part agreed with the panel's conclusions.