Canadian Official Hints at Trade War on Hollywood

Canada’s deputy prime minister, wrapping up a highly publicized summit with this nation’s leading entertainment industry executives, Monday hinted at a trade war aimed at Hollywood and what she has called “American cultural imperialism.”

Sheila Copps, the second-highest-ranking member of Prime Minister Jean Chretien’s government, suggested that Canada might contest U.S. restrictions on foreign ownership of U.S. broadcast outlets and target alleged copyright infringement when Americans tape-record compact discs and radio broadcasts by Canadian performers.

Copps, who noted that she had raised the issue on a recent trip to Paris, also said Canada would explore alliances with other major countries such as France that are concerned about U.S. cultural domination.

Copps is the most hawkish member of her government on cultural issues, and because she declined to go into detail Monday it was unclear whether Canada is ready to transform her words into action.

But the impassioned tone of her remarks--in which she said Canada would “play hardball”--reflects a crisis mentality that has gripped many in recent weeks in the cultural, entertainment and government circles of this nation, where 75% of prime-time television, 80% of magazines sold on newsstands, 96% of movie screen time and 70% of radio air time are devoted to foreign products, mainly American.

The sense of urgency also stems from a ruling of the World Trade Organization, expected to be made final next week, upholding a U.S. challenge to a key Canadian trade barrier.

Leaked copies of its judgment suggest that the WTO will rule that a new Canadian tax, intended to prevent the proliferation of Canadian editions of U.S. magazines, violates international trade accords.

The WTO decision may revive a short-lived Canadian edition of Sports Illustrated that the magazine’s publisher, New York-based Time-Warner Inc., closed after enactment of the tax. But the principles cited in the ruling also could be applied to other disputes between the United States and Canada over the Canadian movie, broadcast, music and publishing industries, all of which receive some government protection from U.S. competition.

U.S. Trade Representative-designate Charlene Barshefsky noted the potentially broader application of the decision during her Senate confirmation hearings, sending shivers through Canada’s entertainment world.

“The Americans are playing hardball with the issue of the WTO on magazines,” Copps told a news conference here after the meeting. “Well, we can play hardball too. The Americans’ policy on foreign ownership on broadcasting is a mere 20%, much less than the Canadian ownership [restrictions] on broadcasting [allowing 33% ownership by foreigners]. If the Americans insist on pursuing their domination of the world culture community by using all the instruments at their disposal, they will expect the same in return.”

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Copps noted that “the American government is the first to complain when American movies are pirated and reproduced illegally in China. . . . But the same righteousness . . . should apply when Canadian artists see their works illegally pirated and copied [in the United States].”

The Canadian argument that culture is being crushed by the Americans is undercut somewhat by the recent success of Canadians in the international entertainment market.

Canadian recording artists Celine Dion, Alanis Morissette and Shania Twain have dominated U.S. sales charts in the past two years; Canada is the world’s second-largest exporter of television programming after the United States; Toronto author Margaret Atwood is on American bestseller lists. And Canadians such as Dan Aykroyd, Jim Carrey and Saturday Night Live producer Lorne Michaels have changed the nature of U.S. comedy.

Copps declined to specify how Canada might attack U.S. policies but added: “If the Americans want to enter into a good dialogue on good public policy, we’re certainly prepared to do that. But . . . we are prepared to use all the tools in our arsenal to fight the decisions that restrict our capacity to build our own culture.”

Besides the dispute over Canadian editions of U.S. magazines, Canada and the United States have clashed in recent years over Canadian efforts to ban U.S.-owned broadcast networks from Canadian cable systems; to prevent U.S.-controlled bookstores from expanding into Canada; and to pass a Canadian copyright law that would levy a tax on blank audiotape and use the money raised to support Canadian, but not American, performers and producers.

While many entertainment industry executives here bemoan the heavy presence of foreign products invading this market, others say that reality reflects the tastes of Canadians who, when given a choice, often prefer U.S. entertainment to that produced at home. Industry officials here say the drain of consumer sales to the United States limits investment in Canadian productions.

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Despite Copps’ tough talk on Monday, the government appears divided on how to deal with the issue and how far to push the United States.

Trade Minister Art Eggleton and Industry Minister John Manley are believed to favor relaxing the rules on foreign investment in Canadian entertainment companies to inject new money into the industry and bolster its presence in the world market.

Eggleton and Foreign Affairs Minister Lloyd Axworthy attended parts of the two-day cultural summit, chaired by Copps; 33 people from Canada’s entertainment and publishing industries participated in the closed-door sessions.

From the comments of several who spoke to reporters afterward, it was apparent that there was little unanimity among the group about how to respond to the U.S. challenge.

Philip Lind--vice chairman of Rogers Communications, the country’s largest cable television provider, and a conference attendee--chuckled when told of Copps’ comments. “You shouldn’t go out and try to provoke trade wars,” he said.