Hollywood Opposes Trade Pact : Entertainment: The industry is hoping its interests under GATT accord will be better served later, under Clinton.

The entertainment industry, convinced that President-elect Bill Clinton will do more to advance its interests overseas than the outgoing Bush Administration, is urging White House officials to abandon efforts to complete a new world trade accord by Jan. 20.

Hollywood executives consider a proposed global trade agreement being negotiated in Geneva to be fatally flawed because it allows countries to restrict imports of American-made films and television programs. They also contend that it should go further in combatting piracy of videotapes, audio cassettes and satellite signals.

The industry wants the Bush Administration to withdraw from the trade talks in hopes that the incoming Clinton team will be able to rewrite the accord, part of the Uruguay Round of the General Agreement on Tariffs and Trade.

Because of the battle over cultural materials, as well as intractable disputes over agricultural subsidies in Europe and Japan, it appears that conclusion of the current round of trade talks is months, and perhaps years, away.

For the entertainment industry, the primary problem is a European Community decree that no more than 49% of its television air time can be filled with non-European programming.

The trend toward limits on imported entertainment is gaining favor worldwide, as nations argue that their indigenous cultures are being polluted by American movie schlock, and that their local film and TV industries are being crushed by cheap American competition.

Jack Valenti, head of the Motion Picture Assn. of America, says the trade pact should be shelved until restrictions on the flow of cultural materials are lifted. Valenti charges that the Europeans and others are masking a purely mercenary interest in protecting their domestic film industries in the high-sounding language of cultural preservation.

“I don’t believe Jerry Lewis has caused any diminishing of the French spirit,” Valenti says. “The so-called cultural exemption is spelled c-o-m-m-e-r-c-e. What it’s all about is a lot of French producers find that what they create for the cinema doesn’t attract French audiences.”

A European diplomat angrily dismisses Valenti as the self-interested spokesman of the American entertainment monopoly.

“These mega-enterprises control distribution as well as production, and it’s in their interest to block everyone else out of the market. The Jack Valentis always overlook that,” the official says. “They just want more of everything without opening their own market. That’s the fundamental problem.”

U.S. film industry officials note that the trade surplus it generates--$3.5 billion to $4 billion a year--is topped only by the aircraft industry.

They further say that the industry’s future depends on export sales of films, television programs and videocassettes, which now run at about $8 billion annually--more than 40% of total industry revenue. The U.S. market is saturated, so virtually all sales growth will come from overseas, industry officials say.

More than half of Hollywood’s overseas sales come in Western Europe, which explains the vehemence with which Valenti and other industry spokesmen attack what they call blatantly discriminatory European Community policies.

“The end game of the European Community is to so restrict us, so harass us, that the only way to immunize ourselves against these barriers is to move much of the production of our film and television from the United States to Europe, thereby becoming European producers, but with no more than 49% ownership,” Valenti says. “That spells job losses for Americans.”

But a senior U.S. trade official says that European-style quotas on imported entertainment are more likely to spread than shrink. The official, who asked not to be named, expressed little sympathy for the people who run the American entertainment business, who are belatedly confronting the harsh realities of a difficult international trade arena.

“Their attitude that they have a God-given right to be a worldwide monopoly on entertainment products isn’t going to hold up in the current political climate,” the official says. “The U.S. studios are going to have to change the way they do business. Foreigners are looking for a piece of the action.”

Experts say the industry’s worries are overblown because of the coming explosion in private television outlets worldwide. Up to now, broadcasting has been a state monopoly in most places, but that is ending. The result will be a rapid expansion in broadcast hours that must be filled.

The cheapest way to fill air time is to buy ready-made programs. And Hollywood’s tape and film libraries are brimming with thousands upon thousands of hours of potential programming.

In the 12 nations of the European Community, the proliferation of new broadcast stations is expected to double the number of programming hours to 400,000 a year by the end of the century.

Officials there say that Hollywood couldn’t fill half of that even if it wanted to, so the 50% quota is meaningless except as a statement of principle.

“The American industry for the moment is supplying just under 30% of the European (television) market. Even if the market were static, they would have a long way to go before reaching the 50% level where the quota would be triggered,” the European trade diplomat says.

Although it is a less-emotional issue for Hollywood than quotas, theft and illegal duplication of copyright materials almost certainly create larger dollar losses.

In some nations--notably the Middle East and Southeast Asia--pirated copies account for virtually the entire market for taped movies and music.

Valenti estimated that worldwide losses from piracy top $1 billion a year.

The GATT agreement under negotiation attempts to strengthen lax piracy laws.

In Thailand, for example, laws require the copyright holder himself to appear in court in complaints of copyright infringement--meaning that if a Bruce Springsteen tape is illegally copied and sold, the Boss himself has to appear as complainant. Industry officials want the law rewritten to allow attorneys for his recording company to press the complaint.

In the Middle East, there are no copyright laws at all, so there is no basis to sue.

The industry is now turning its hopes for relief to Clinton’s nominee for trade representative, Los Angeles lawyer and longtime Democratic activist Mickey Kantor. Industry officials hope that because Kantor is from Los Angeles, and because he has represented Walt Disney Co. in several real estate transactions, that he will be sympathetic to their trade concerns.

They also say privately that Hollywood’s substantial financial support for Clinton and his close friendship with several prominent entertainment figures should buy them at least a fair hearing.