MUMBAI: In a move that could substantially increase the number of American films allowed in the country - a long-sought goal of the major studios, Hollywood‘s chief lobbying arm and federal trade officials are going to soon negotiate with China.

Representatives of the Motion Picture Assn. of America (MPAA) and the office of the US trade representative have been working on crafting a compromise in a long-running trade dispute with China, which has had a rocky history with Hollywood but has become an increasingly vital market for the media conglomerates.

In addition, under the proposed plan, China would agree to provide greater market access to Hollywood by allowing an additional company to distribute foreign films. Currently, government-owned China Film Group controls the import of foreign movies into China.

China allows only about 20 foreign films into the country each year under a revenue-sharing agreement in which studios collect less than 20% of box office revenue, compared to more than twice that in the U.S. and other international markets. Under one scenario being discussed, China would expand the revenue-sharing quota to as much as 40 foreign films, said three people familiar with the matter who asked not to be identified because the talks are confidential.

The new MPAA Chief Executive Christopher Dodd has made opening doors in China one of his top priorities since assuming the job two months ago. He plans a trip to the Shanghai International Film Festival in June in an effort to build relations with film officials there.

The efforts come as pressure mounts on China to comply with a World Trade Organization ruling in 2009. In a decision hailed as big victory for the U.S. entertainment industry, the WTO ruled that China had violated international trade rules by restricting imports of foreign movies and other media.