An Uncommon Market for U.S. Entertainment : Commerce: Europe buys Hollywood’s goods to the tune of $1 billion annually, but some Europeans are pushing for import limits to curtail what they see as a threat to traditional values.

An American looking for a taste of home need only turn to the entertainment listings in the local newspaper.

Hollywood movies ranging from “The Little Mermaid” to “Total Recall” are playing, dubbed or subtitled, on 19 of the 27 screens at the Kinepolis, Europe’s largest multiplex. A typical evening’s television fare includes current U.S. prime-time favorites, steamy American soap operas and long-ago-canceled sitcoms from the studios of Burbank.

Europe’s growing purchases of movies and television programs account for almost $1 billion in sales annually for the big Hollywood studios and independent producers, and have become an important means of shoring up their bottom lines.

But European leaders say they fear that such a steady diet of “Falcon Crest” and “Mr. Ed” threatens to undermine culture and traditions built over centuries. Already, some countries have moved to impose their own quotas, and the European Community’s 12 member countries in October adopted a resolution recommending limits on the amount of U.S. programming that may be shown on European television stations once the Continent becomes a single market at the end of 1992.

“We are entitled to ensure that our culture somehow will be preserved,” said Nico Wegter, spokesman for EC Trade Minister Frans Andriessen.

But Jack Valenti, president of the Motion Picture Assn. of America, dismisses such arguments about culture as “a disguise. Everybody in the business knows they are talking about commerce.”

The issue is on the GATT (General Agreement on Tariffs and Trade) agenda here this week, as negotiators from 107 countries meet in the final days of an ambitious four-year round of talks aimed at revamping the entire worldwide trading system.

The Europeans have insisted that anything relating to culture be excluded from the final agreement, which would leave them free to go their own way in limiting foreign films and TV shows with less fear of retaliation. The United States thus far has said it will oppose such an exemption.

Valenti has been here, lobbying furiously to make sure that the agreement makes it clear that quotas on entertainment and other cultural products such as books are not allowed under the final agreement, if there is one.

At a time when other American businesses have lost ground against foreign competition, this country’s unquestioned domination of the worldwide entertainment market is “a most precious American trade jewel” that provides a $3-billion trade surplus, he said.

Thus far, Valenti said, he has gotten no indication that the Europeans may be flexible on the issue: “What I’m saying is going over the gentlemen’s heads, and what they are saying is going over mine.”

U.S. Trade Representative Carla Hills has offered “total support,” Valenti added. However, recent experience suggests that the cultural quotas issue is one that the United States may be willing to bargain on in the final hours of talks.

One source recalls that when the United States struck a free-trade agreement with Canada a few years ago, Secretary of State James A. Baker III telephoned Valenti at home at midnight and said: “I’m sorry, Jack. We had to throw you overboard.”

As a result, the United States agreed that it was permissible for Canada to impose trade quotas it deemed necessary to protect its culture.

Hoping to assure that this does not happen again, Valenti has enlisted the aid of 34 senators, who have written to Hills warning that they would view a trade agreement as “seriously flawed” if it allows the Europeans to limit their imports of foreign culture. Thus, they suggest that congressional approval of the trade agreement could hinge in part on that issue.

The EC directive approved in October asks that broadcasters reserve at least half of their transmission time for European shows. That directive is non-binding, and does not cover time devoted to news, sports, game shows and advertisements.

Andriessen insists that the 50% target would actually allow an increase in U.S. programming, because current levels overall amount to only 40%.

But that figure masks wide variation within Europe. Local producers are responsible for 80% of French programming, and the 50% target could open that market up to many U.S. producers. Many other European countries already accept more than half of their programming from overseas, however, and the new EC position could pressure them to cut back.

U.S. entertainment industry officials also warn that the 50% target could be the first step toward mandatory limits. France, for example, has argued for mandatory quotas of 60% European-produced programming. If that standard went into effect, one 1988 study suggested that well over half of European stations would have to reduce their U.S. programming.

European countries have moved to restrict the showing of U.S. movies in their theaters as well. Italy, for example, requires its theaters to show Italian films at least 100 days a year, and is planning to increase the quota to 120 days, Valenti said.

He and other officials have noted that it is difficult to determine how exactly to interpret the quotas. How, for example, would a country account for a movie made by a U.S. production company, with an Italian crew, from a British screenplay, with French actors?

However they are used in practice, Valenti said, “the quotas are there. They are as visible as a boil on your nose--and twice as painful.”