Hollywood has bypassed a chance to seek immediate trade sanctions against the European Community over program quotas. Instead, the Clinton administration was asked Friday to keep the EC on a priority watch list of nations that refuse to protect U.S. intellectual property rights.

The petition, filed by the Motion Picture Export Assn. of America with U.S. Trade Representative Mickey Kantor, signals again the studios’ new low-key approach to the EC being taken in the wake of Hollywood’s stinging defeat in the recent worldwide General Agreement on Tariffs & Trade deal.

MPEAA could have asked that EC countries be designated “priority foreign countries”– a category of nations identified as the most egregious abusers of intellectual property who can be subjected to immediate trade sanctions by the U.S. government.

By seeking to retain merely the priority watch list designation against the EC, the MPEAA asked Kantor only to monitor the EC throughout 1994 and to prevent “further deterioration” of Hollywood’s access to Euro markets.

MPEAA chairman Jack Valenti said he hopes to find “an equitable resolution … through quiet diplomacy” to Hollywood’s dispute with the EC. MPAA companies are adamantly opposed not only to EC’s broadcast quotas, but also to European taxes on U.S. video sales and rentals, which go to subsidize EC film and TV production.

Also on Friday, MPEAA joined the music and computer software industries in urging Kantor to put China once again on the “priority foreign country” list. China was removed from the list in 1992 after pledging to clean up its copyright enforcement act.

However, the International Intellectual Property Assn. — a U.S. trade group representing copyright industries — says that in 1993 alone, U.S. copyright industries lost nearly $ 830 million in China due to rampant piracy.

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