GATT under attack

A day after Hollywood was cut out of the world trade accord, some in Washington have decided that the U.S. film, TV and music industries must have some recourse if Europeans try to tighten the screws on imports.

Aides to Senate international trade subcommittee chairman Max Baucus (D-Mont.) said the senator will ask the Clinton administration to retaliate against the European Community via U.S. trade laws.

A Baucus staffer said the senator will ask U.S. Trade Representative Mickey Kantor to use the U.S. Special 301 laws to target EC countries in an effort to pry open more venues for U.S. films and TV programs. The U.S. currently pockets between $ 3.5 billion and $ 4 billion in revenues from film and TV sales in Europe, despite a series of quotas and protectionist restrictions.

Under Special 301 laws, which aren’t part of the General Agreement on Tariffs & Trade, countries accused of infringing on the trade interests of the U.S. are placed on a list every April 30 and given 90 days to settle the trade squabble. If no deal is reached, the U.S. can institute retaliatory measures.

For example, if it’s determinedthat EC broadcast quotas and film subsidies cost the U.S. TV and pic producers $ 1.5 billion a year in lost revenue, the U.S. could block EC imports of other commodities or services — such as wine imports — which total that amount.

While Kantor has employed Special 301 mostly against Asian and Latin American countries accused of copyright piracy, it’s unclear whether the law could be used successfully against countries such as France, which portrayed the GATT fight as pitting U.S. commercialization against French culture.

Tuesday, in the trade deal of the century, 117 countries smashed tariff barriers on everything from cauliflower to computer chips, but no agreement could be reached between the Americans and the Europeans on audiovisual concerns , thanks in particular to heavy lobbying from the French.

While Hollywood was licking its wounds over the audiovisual rebuff in Geneva, French politicians and press indulged in a round of self-congratulations, trumpeting the decision to exclude audiovisual from free trade rules as “a French victory.”

On the political front, Communications Minister Alain Carignon welcomed the 11th-hour breakthrough in the 117-nation GATT talks as a “great and beautiful victory for Europe and for French culture,” while former socialist Culture Minister Jack Lang said, “It’s a victory for art and artists over the commercialization of culture.”

“At the end of the day, the European structures (of subsidies and quotas) are untouched,” noted a French source. “They (quotas) will also apply to new (TV or pay TV) services that come onto the market as digital broadcasting develops.” The Americans had hoped to cut a deal with the Europeans that would have exempted new pay TV and satellite services from the usual EC-wide 50% quotas on foreign (mainly U.S.) imports. That ploy failed.

Now French Culture Minister Jacques Toubon is calling for a more clearly defined EC approach toward the film and TV industries, though it is unclear if quotas are to become tighter or be applied more literally. EC watchers say the next major development in the EC TV policy will be an attempt to update the Television Without Frontiers directive — which calls on European broadcasters to air a majority of European product.

During the final stages of GATT negotiations, Kantor is reported to have demanded direct American participation in the talks about the directive. The demand was refused.

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