President Clinton’s solid win on NAFTA in the House of Representatives Wednesday represents good news for a U.S. entertainment industry heavily dependent on open markets worldwide.
That’s the claim of Jack Valenti, head of the Motion Picture Assn. of America , who said the North American Free Trade Agreement “helps frame the future. In that future, trade barriers must come down (and) access to markets must be granted to all. Either we export or we shrink. There is no middle ground.”
Pundits had expected a close vote, but the 234-200 victory gave Clinton plenty of breathing room. Among Democrats, the vote was 102 for and 156 against; Republicans favored the measure by 132 to 43. The lone independent voted against the pact.
Specifically, the NAFTA agreement requires Mexico — with a long tradition of copyright piracy — to begin strictly protecting intellectual property. The result could be a boom in the sale of U.S. videos in Mexico.
NAFTA also carries lingo requiring greater protection from signal theft of U.S. satellite programming beamed into Mexico, a provision that should result in greater development of cable programmers such as HBO Ole and TNT Latin America.
Another clause in NAFTA allows Mexican cinema owners to reduce from 50% to 30 % the percentage of films that are of Mexican origin.
In Canada, NAFTA’s passage means little for the entertainment industry. Canada has had a “cultural exemption” since 1987 under a prior agreement with the U.S. but has never used it.
Though the Senate must also put its stamp of approval on NAFTA before the accord becomes law, passage there is considered a certainty. A Senate vote could come as early as this weekend.
The MPAA also believes passage of NAFTA will set a precedent for greater copyright protection in all Latin American countries.
Hollywood support forNAFTA is linked hand-in-hand with MPAA’s hope for successful completion of the General Agreement on Tariffs and Trade (GATT)in Europe. The feeling among MPAA member companies has been that GATT talks will collapse if NAFTA fails and that Hollywood would thus lose a golden chance to roll back TV program quotas and other restrictions on “cultural” products from the U.S. embraced by European Community countries.
Eric Smith, general counsel of the International Intellectual Property Assn., a trade group that represents the film, recording and book publishing industries , said passage of NAFTA “will significantly improve (President Clinton’s) chance for securing a strong GATT agreement.”
Meanwhile European officials, particularly the French, continue in their pronouncements that they will not sign any world trade agreements that do not provide for some exemptions for cultural products and activities.
Many Europeans fear that free trade in cultural goods and an end to government subsidies would give the Americans a greater edge and accelerate the dominance of American culture on their continent. The more protectionist-minded among the Europeans are likely to view the passage of NAFTA as one more reason why their trade block — the European Community — should play hard ball against the Americans — and their newly formed trade block.
The administration also had stressed the impact of NAFTA’s passage on the Asia Pacific Economic Cooperation forum, which began Wednesday in Seattle and includes delegations from 13 nations, plus Hong Kong and Taiwan. That summit also is expected to include discussion of American copyright issues.