SOUTH KOREAN BARRIERS CITED IN COMPLAINT : STUDIOS ASK U.S. TO FIGHT TRADE CURBS

Nine of Hollywood’s leading film companies, vowing to fight “unreasonable” foreign restrictions on U.S. films, asked the federal government Tuesday to take action against South Korea to counter its policies limiting the distribution of U.S. films.

In an unfair trade complaint filed with the Office of the U.S. Trade Representative, the Motion Picture Export Assn. of America charged that barriers erected by the Korean government have caused “serious injury” to the U.S. film, home video and television industries.

Jack Valenti, president of the association, told a press conference that the U.S. movie producers and distributors believe that they are entitled to the same access to the Korean marketplace that Koreans have in the United States.

“We are free traders,” Valenti said of the nine studios that make up the export association. “But we do insist that the golden rule be followed. That is, we want to be treated in Korea with the same hospitality and freedom that Korean businessmen have in this country. We ask no more. We ask no less.”

The association’s complaint alleges that the Korean government prohibits American film companies from establishing local offices in that country, limits the number of U.S. films that can be imported, requires companies registering to import films to deposit more than $800,000 with the Korean Motion Picture Promotion Corp. and to make a “contribution” of about $170,000 for each imported movie title.

These restrictions, the association said in its filing, constitute “a major impediment to the export of American films to Korea” and are “in stark contrast to the freedom with which Korean firms can export to, and operate in, the American market.”

Valenti pointed out that Korea currently enjoys $1.5 billion in special trade benefits from the U.S government. In 1984, Korea had a trade surplus of $4 billion with the United States. Last year, U.S film industry revenues from South Korea totaled about $7 million, he said.

The association’s complaint, filed under Section 301 of the Trade Act of 1974, asks the government to consider restrictions against Korean imports to the United States; imports range from office machines to golf equipment.

Sen. Pete Wilson (R-Calif.), who recently visited Korea and met with top government officials, issued a statement Tuesday proposing that trade sanctions be imposed on South Korea unless it opens its markets to the U.S. film industry before Jan. 1.

“Korea’s ban on the distribution of films by non-Korean companies, its limits on how many foreign films can be shown and its ceiling on the price that can be paid for the rights to U.S. films are obnoxious as individual restraints,” Wilson said. “Taken together, they deserve a firm U.S. response.”

Valenti said the association originally planned to file this complaint against Korea in June, but halted when Korean officials expressed a willingness to negotiate a settlement.

“Unhappily and to our dismay, we found that these restrictions were not going to be dismantled,” Valenti said.

Moreover, Valenti warned that the U.S movie industry is prepared to take similar action against “every country that is treating us with discriminatory practices even as they enjoy total access to our country.” He said negotiations are under way with several countries, but declined to name them.

In the case of Korea, Valenti said that while the U.S. movie studios involved in the complaint made 177 films last year, the Korean government imported only 14 American-made films, including “E.T.,” “Terms of Endearment,” “Ghostbusters,” “Against All Odds,” “Greystoke” and “Octopussy.” In 1971, Korea imported 52 U.S. films. Last year, England and France imported 150 U.S. titles, while Japan imported 108.

The U.S. movie industry also complained that another restriction requires Korea’s 450 motion picture theaters to devote at least two-fifths of their screen time to Korean-produced films. In 1983, U.S. films accounted for 69% of Korea’s box-office revenues, but U.S. film producers received a license fee amounting to only 1.8% of gross box-office revenues.

The movie industry’s complaint was not limited to U.S. films shown in theaters.

In the case of television, the American companies charged that Korea has imposed a $25,000 ceiling per title on broadcast rights to foreign feature films. The companies also complained that rigid Korean censorship prevents many American films from being seen there.

There are also problems, the U.S. film companies say, with home videos, which now number more than 600,000 in Korea.

According to the complaint, the Korean government prohibits importing any prerecorded video material and limits license fees paid for video rights to foreign productions to a maximum of $5,000.