The Office of the U.S. Trade Representative is expected to announce today that it has agreed to investigate a complaint by leading U.S. film companies charging that South Korea has imposed "unreasonable" and "discriminatory" restrictions on the distribution of U.S. films.
The complaint, filed Sept. 10, alleged that the barriers erected by the Korean government have caused "serious injury" to the U.S. film, home video and television industries.
The Office of the U.S. Trade Representative is the Reagan Administration's key office for setting U.S. trade policy.
Acceptance of the complaint means that U.S Trade Representative Clayton Yeutter will start an investigation of the domestic film industry's charges and likely negotiate with the South Korean government over the matter. If the negotiations do not resolve the complaint, Yeutter's office can make recommendations to the President.
The film companies' unfair trade petition alleges that the restrictions imposed by the South Korean government prohibit American film companies from establishing local offices in that country, limit the number of U.S. films that can be imported, require 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.
According to the Motion Picture Assn. of America, the U.S. movie studios involved in the complaint made 177 films last year, but the Korean government imported only 14 America-made films, including "E.T.," "Terms of Endearment," "Ghostbusters," "Against All Odds," "Greystoke" and "Octopussy." By comparison, in 1971, Korea imported 52 U.S. films.
The filing was made through the MPAA, whose president, Jack Valenti, has said that these restrictions constitute "a major impediment to the export of American films to Korea."
The complaint, filed under Section 301 of the Trade Act of 1984, asks the government to consider restrictions against Korean imports to the United States that range from office machines to golf equipment.
Earlier this month, Sen. Pete Wilson (R-Calif.) wrote to Yeutter urging him to accept the movie industry's petition. Wilson said in his letter that efforts by his staff to find other avenues for negotiations with the Koreans had failed.
Wilson wrote Korean Ambassador Byong Hion Lew here last spring and delivered a letter personally to South Korean President Chun Doo Hwan when he recently visited Korea. Wilson's staff also has met with top Korean negotiators on the matter.
Sources said Wilson is angry that he and his staff have never received a response from the South Koreans or been contacted by the ambassador.
Wilson is not the only senator to urge that the South Koreans remove their restrictions on the American film companies.
In June, eight members of the Senate Commerce Committee also wrote to the Korean ambassador saying that "what is at stake here is the principle of fair and equitable trading. The American film industry asks no special privileges from Korea nor do they seek any favors. All they ask is that they be treated in Korea as Korean businessmen are treated in the United States.
"Restrictions of the kind and variety which have been erected in Korea simply cannot be allowed to endure," the senators wrote.
Currently, South Korea 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.
As Wilson has said, "While South Korea has benefited greatly from our friendship and our lucrative open markets, American businesses have not been afforded equal opportunities in the marketplace, costing jobs and adding millions to our trade imbalance."
U.S. film companies had revenues totaling about $7 million from South Korea last year, according to the MPAA.
The film companies represented by the MPAA in the petition are Columbia Pictures Industries Inc., Walt Disney Productions, Embassy Pictures Communications, MGM/UA Entertainment Co, Orion Pictures Corp., Paramount Pictures Corp., 20th Century Fox Film Corp., Universal City Studios Inc. and Warner Bros. Inc.