In international trade, culture-trade is an extremely sensitive and complicated issue. Since cultural diversity has irreplaceable effect on the development of humankind and relates to social identity, it should be protected and promoted. In the modern world, cultural products have been a main expression of cultural diversity. Hence, many debates on culture-trade issue focus on the WTO which, is the most important international organization of trade and may cover cultural goods and services. As the adoption of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions, the conflict between cultural diversity and free trade is getting more and more intense. This thesis will begin with the role of cultural diversity in the society and the threat from current international cultural market to arouse more attention to the necessity of protecting and promoting cultural diversity. Then the recognition that both cultural diversity and free trade are needed in the context of globalization will be discussed. That is why the balance between cultural diversity and trade liberalization is so important. Next, in the core of this thesis, aiming at seeking the balance, basing on examining the existing WTO law and main provisions of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions, proposals on resolving the conflict between cultural diversity and trade liberalization under the framework of WTO and UNESCO will be given relying on the conflict rules of international law. Finally, regarding China as a state having splendid culture and having been involved into international cultural trade, the recent case of WTO dispute about cultural products between China and the US will be examined, and some specific suggestions to China will be shown.