The United States requested an investigation into China’s restrictions on the sale of American movies, music and books, but China blocked probe by WTO.
Under WTO rules, China has the right to block the investigation once. But it cannot delay the panel's establishment a second time, meaning the investigation will most likely be authorized next month.
The U.S. requested the probe at a meeting of the WTO's dispute settlement body, trade officials said.
The case is seen as concerning American filmmakers, online music providers and other U.S. media suppliers who claim to be suffering from what the U.S. calls "less favorable distribution opportunities" in China.
The WTO is already investigating three trade disputes between China and the United States. Washington accuses China of illegally hindering the import of foreign auto parts, providing government subsidies to a number of Chinese industries, and effectively providing a safe haven for product piracy and counterfeiting through excessively high thresholds for criminal prosecution.
China has filed its own complaint over the antidumping duties the United States applies on Chinese paper imports, the first case initiated by Beijing against Washington in five years.
U.S. consultations with China have failed to resolve the differences.
"Those consultations provided some helpful clarifications but unfortunately did not resolve the dispute," said the U.S. delegation to the WTO in its written communication to the chairman of the body.
Washington first brought the case to the WTO in April alongside its complaint over rampant product piracy in China, alleging that Beijing had failed to remove import and distribution restrictions on copyrighted U.S. goods including newspapers, magazines, CDs, DVDs and video games.
For some products, distribution is limited to Chinese state-owned companies, the U.S. said. For others, foreign companies face censorship rules that do not extend to Chinese competitors.