Europe Will Place a Quota on U.S. TV Shows, Maxwell Tells Congress

British movie mogul Robert Maxwell, rebuffing U.S. calls for unrestricted sales of American television shows to Europe, told a House panel Wednesday that there will eventually be a quota on Hollywood’s productions and that the industry must come to terms with the inevitable instead of engaging in a bruising trade fight.

Maxwell, chairman of Maxwell Communications, called U.S. threats of trade retaliation over television and movies “hollow” and said: “Europe will have a directive (quota). You can have a hard directive or a soft directive. . . . You need the competition. You’ve conquered the world, now it’s our turn. You cannot drive us into the ground.”

The declaration followed a rousing free-trade speech by Jack Valenti, president of the Motion Picture Assn. of America, and warnings from U.S. officials who said any quota would violate international trade agreements.

“We don’t want any more than the same freedom of access that European businessmen find (in the United States). Nothing more, nothing less,” Valenti said. “They don’t need any quota crutch.”

‘Seeking to Preserve Heritage’

The hearing, before the House Commerce Committee’s subcommittee on telecommunications, was an attempt to find common ground between the European Community and Hollywood but only seemed to underscore their philosophical chasm.

The Europeans, in drafting rules for their 1992 economic union, say they are just seeking to preserve their cultural heritage and fledgling movie industry in the face of overwhelming competition from the United States. But Hollywood charges that “Europe without walls” is only a veil for a “Europe without American television,” and that the proposed quota could be a prelude to escalating protectionism.

A law to ensure that more than 50% of air time is filled by shows produced by the 12 EC nations is at the center of the dispute. According to EC figures, only about 5,000 hours of Europe’s annual 105,000 hours of TV and movies are produced on the Continent, the majority being American-made, earning Hollywood $800 million last year.

Move Could Backfire

Deputy U.S. Trade Representative Julius Katz agreed, saying the idea of a quota is not acceptable and would violate international trade agreements.

But Maxwell warned that U.S. efforts to stave off any limits might succeed in blocking a uniform European policy but could backfire by leaving individual nations free to pass more rigorous limitations.

“The American entertainment industry stands to lose a greater portion of the European broadcast market if the Council of Ministers cannot reach an agreement and the decision is relegated to the judgments and controls of the European states,” he said.

He said countries such as France, which is pushing the hardest for greater European restrictions, is the “greater menace.” Working together, the United States and the EC could both profit by maximizing a potential market of 335 million viewers, he said.

“We can do for software and television what NATO did for European defense,” he said.

David Webster, a former director of the BBC, said the directive would be a “minimum regulatory framework” and the “best deal available” to Hollywood.

“America is going to make much more money in the expanding market,” he said.

Although the testimony was lively and often in direct contradiction, the tone remained amiable and both sides stressed that talks should prevail over confrontation.

“We can avert all that,” Valenti said. “Each side knows that the stakes are too high to be unreasonable.”