International Business : EU Panel Urges Tighter TV Import Quotas : Trade: The tougher decision could spell trouble for the U.S. entertainment industry.

In a reversal that could spell trouble for the U.S. entertainment industry, a European Union panel on Wednesday recommended a tightening of quotas for 10 years on the amount of imported material shown on European television.

At a news conference following the decision, the EU’s commissioner responsible for cultural affairs, Marcelino Oreja, said the measures were taken to “encourage” Europe’s film and television industries to become more competitive.

“These are weak industries that need help,” Oreja said.

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The tougher quotas approved by the EU’s Executive Commission must still win the approval of a majority of the EU’s 15 national cultural ministers and could also face a lengthy ratification process in the European Parliament before they come into force.

Still, the decision set a new tone in a longstanding debate on quotas that has been highly controversial within the EU. The target of the debate is the U.S. film and television industry, which provides the bulk of Europe’s imports.

Film and television productions comprise the No. 2 American export industries, behind aerospace, and last year earned around $8 billion overseas. More than half of these sales came from Europe.

Officials at the European office of the Motion Picture Export Assn. of America in Brussels declined initial comment on the decision, saying they were studying it.

The commission vote came after a three-hour debate and constituted a major victory for French diplomacy. France has led efforts to tighten a quota system implemented in 1989.

That system requires television channels operating in the EU’s 15 member states to have at least half of their non-news and sports programming be of European origin “where practicable.”

The commission Wednesday effectively closed the loophole by removing the words “where practicable.” The 10-year limit on the quotas was described by one source involved in the decision as “a necessary trade-off” to win the support of those opposed to restrictions on imported programming.

As recently as January, anti-quota sentiments within the commission seemed strong enough to bury any attempt to toughen existing controls. However, since then, France has lobbied hard to turn opinion.

In a speech to the European Parliament earlier this year, French President Francois Mitterrand seemed to suggest that Europe’s political stability depended on the survival of its film industry.

In addition to setting the 10-year limit on quotas, the commission decided to give “thematic” channels, such as cartoon and all-movie channels, the option of avoiding quotas if they devote 25% of their programming budget to European productions.

New services, such as video-on-demand, are also exempt from quotas.

European opponents of TV quotas claim they will further weaken the competitiveness of an industry that has been heavily sheltered by liberal subsidies and other supports.

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In a decade in which French films have been more heavily subsidized than those in any other European country, domestic attendance at French films has plummeted from 90 million per year to 45 million, while attendance at American offerings in France has remained constant, at 80 million, opponents of quotas note.

Arguing that subsidies and quotas stifle new talent, the current issue of the London-based Economist magazine noted that 85% of Europe’s film directors are over the age of 50.

“If Paris prevails in the quota quarrel, the following bet is a sure winner,” stated Josef Joffe, editorial page editor of the Munich daily Sueddeutsche Zeitung: “Prime time on European television will still belong to Hollywood and the wee hours will belong to a lonely, doubtless very ‘cultural’ Euro-movie. As it circulates through the sprockets, it will discharge only one function: to meet the quota.”