We introduce some graded versions of the walled Brauer algebra, working over
a field of characteristic zero. This allows us to prove that the walled Brauer
algebra is Morita equivalent to an idempotent truncation of a certain infinite
dimensional version of Khovanov's arc algebra, as suggested by recent work of
Cox and De Visscher. We deduce that the walled Brauer algebra is Koszul
whenever its defining parameter is non-zero.