Company Town : U.S., France Agree to Seek Resolution of Film Dispute : Trade: Kantor strikes an unexpected three-part agreement in Paris.

The United States and France have agreed to take a new stab at resolving their bitter dispute over movies, U.S. Trade Representative Mickey Kantor said Tuesday.

The two countries--legendary sparring partners in the trade arena--also agreed to sit down and address their common concerns over access to Japan, considered the main transgressor when it comes to trade.

“We have agreed to begin to hold informal talks,” Kantor said at the annual meeting of the Paris-based Organization for Economic Cooperation and Development.

In a third development, groups from Paris and Washington plan to delve into the contentious new link between trade policy and worker rights--a high priority for both governments.

Kantor said he struck the three-part agreement over dinner Monday night with his French counterpart, Gerard Longuet.

Taking a new tack, the informal talks will group not just government officials but labor and industry representatives as well.

The audiovisual sector has long divided the United States from the European Union, which fears that Hollywood will sound the death knell for Continental filmmakers.

Despite the fact that most Europeans are more keen on Rambo than Zola, Longuet has argued long and loud against Hollywood blockbusters, all in the name of a higher European art.

The United States had pushed hard to bring the multibillion-dollar industry under the auspices of the General Agreement on Tariffs and Trade when talks wrapped up last December. But France balked and America backed off, while vowing that the issue was far from dead.

There is big money at stake. According to industry data, the U.S. film, TV and home video industry earns about $8 billion of its $18 billion in annual revenues overseas. Of that, some 55% comes from Western Europe.

At issue is a 1989 European broadcast directive that ensures at least half of all European Union television programming is home-grown. France has taken it one step further, mandating a 60% domestic content.

What has also galled the Clinton Administration--which relied on strong backing from Hollywood to help it capture the White House--are rules that deny U.S. artists and producers full royalties when their work is shown at European theaters. The royalties are instead plowed back into EU industry.

The new U.S.-Gallic alliance--given their past wrangling over everything from oil seeds to fish to wine--had not been foreseen. Kantor met last week with EU Trade Commissioner Sir Leon Brittan, who said the movie dispute did not even come up.

Alongside the new attempt to make greater inroads in the film business, Longuet and Kantor also agreed that the two sides should team up on two other highly contentious trade issues.

The United States has been pushing an aggressive market-opening strategy in its talks with Japan. Some trading partners have expressed fears that Americans are negotiating for U.S. firms alone, despite U.S. claims to the contrary.

All previous attempts by Brittan to step into the fray and “trilateralize” the negotiations have come to naught.

Now Longuet is stepping in his wake.

Longuet and Kantor also agreed to delve into the trade-labor debate, which many countries fear is a mask for higher wages overseas and amounts to First World protectionism.