TRADE WATCH : GATT Drama

Hollywood is taking center stage in world trade talks, but the unfolding drama is not very entertaining. U.S. Trade Representative Mickey Kantor has been unable to nudge or cajole the European Union into a mutually agreeable compromise on European quotas and subsidies that work against American filmmakers.

The stalemate has become a major obstacle to securing an overall U.S.-European trade accord, which is crucial to achieving a world trade agreement by the Dec. 15 deadline set by Congress. Embracing service industries, such as entertainment, for the first time in a world trade framework is one of the goals of the talks, now in their seventh year under the auspices of the General Agreement on Tariffs and Trade.

U.S. negotiators are right to press for greater access for film imports and for the end, or at least modification, of a tax on film imports that is used to subsidize European filmmakers.

For the last four years the EU has required that at least 50% of a European television station’s programming be of European origin; the French have an even higher quota. In addition, most EU members subsidize their film industries.

In dollar amount, exports of U.S. entertainment products are second only to U.S. aerospace exports. The advent of satellite and cable-delivered entertainment is expected to increase the demand for American movies and TV programs even more. EU quotas and taxes could be extended to a new generation of entertainment if the system is left as it is. The fair thing to do is to liberalize the rules now.