Chinese trade agreement on films helps White House-Hollywood relationship

The White House and Hollywood studios are heralding a new trade agreement with China that gives the United States the chance to increase the number of films exported to the country and substantially increases American studios cut of Chinese box-office revenue.

“This agreement with China will make it easier than ever before for U.S. studios and independent filmmakers to reach the fast-growing Chinese audience, supporting thousands of American jobs in and around the film industry,” said Vice President Biden. “At the same time, Chinese audiences will have access to more of the finest films made anywhere in the world.”

Biden spent Friday in Los Angeles with Chinese Vice President Xi Jinping.

The five-year agreement allows the exportation of 14 more films to the country annually, with a focus on 3D and IMAX movies that carry higher ticket prices — and are best viewed in theaters, rather than on DVDs that can be easily bootlegged. Under the pact, American film companies can distribute the films privately, rather than through a state-run association, significantly increasing their cut of ticket revenues.

The agreement is a big political win for the administration, which had seen Hollywood actors and executives giving the president a cold shoulder during a recent fundraising swing through California. Studios were upset with the perception that Democrats were favoring Silicon Valley interests over the industrys intellectual property when the president refused to support controversial legislation that would have further criminalized online piracy.

Entertainment executives maintained that the SOPA and PIPA bills were necessary to fight online trafficking of movies, television shows and music, but technology companies fretted that provisions of the bill were too draconian. After online protests from major websites including Wikipedia and Reddit, Congress abandoned the legislation.

But the new trade pact should help Hollywood increase its footprint in one of the fastest-growing film markets.

“U.S. studios and independent filmmakers cite China as one of their most important world markets, but barriers imposed by China and challenged by the United States in the WTO have artificially reduced the revenue U.S. film producers received from their movies in the Chinese market,” said United States Trade Representative Ron Kirk. “This agreement will help to change that, boosting one of America’s strongest export sectors in one of our largest export markets.”

The United States has agreed to pull an existing complaint with the World Trade Organization as part of the agreement. American officials had maintained that the previous Chinese policy was in violation of international trade rules. 

The Motion Picture Association of America — the Hollywood studios’ trade association — applauded the agreement in a news release Saturday.

“This is a major step forward in spurring the growth of U.S. exports to China,” the MPAA said. “It has long been a top priority for the MPAA, and it is tremendous news for the millions of American workers and businesses whose jobs depend on the entertainment industry.”

The studios emphasized that the agreement should help the fight against movie piracy.

“By promoting the growth of a legitimate marketplace for U.S. movies in China, this agreement will also complement efforts to fight movie piracy and help protect the jobs of workers in both countries, whose livelihoods are dependent on a healthy entertainment industry,” the MPAA said.