U.S. Holds Edge in Clash With Canada

If Canada really wants a trade war with the United States over entertainment and cultural issues, as a top government official has hinted, the U.S. has far more weapons at its disposal than the Canadians, trade analysts and interested parties on both sides of the border said Tuesday.

Noting the relative sizes of the two nations’ economies and Canada’s heavy dependence on exports to the United States, Dennis Browne, director of the Center for Trade Policy and Law at Carleton University here, concluded: “It’s a pretty uneven battlefield.”

More than 80% of Canada’s trade is with the United States, and while Canada is the United States’ largest single trading partner, it accounts for less than a quarter of U.S. exports, Browne and other experts said.

That fact tilts the balance in favor of the United States in almost every trade dispute, particularly those involving politically sensitive issues, including entertainment.

Deputy Prime Minister Sheila Copps, the second-ranking member of Prime Minister Jean Chretien’s government, raised the prospect of an entertainment trade war Monday at a news conference in the capital.

Citing an apparently successful appeal by the United States to the World Trade Organization against a key Canadian trade barrier that barred most Canadian editions of U.S. magazines, she told reporters Canada was ready to “play hardball” with its neighbor.

Her comments were big news here. The Canadian Broadcasting Corp. devoted 20 minutes of its hourlong nightly television newscast to the issue and opened its report with a shot from the movie “Independence Day” showing an alien spaceship blasting apart the White House.

“Get ready for a battle,” anchorwoman Hannah Gartner announced. The story also earned a front-page banner headline in the national newspaper, the Globe and Mail.

But Browne and others on Tuesday suggested that Copps might just be engaging in rhetorical brinkmanship.

Browne, who spent 31 years in the Canadian foreign service, including a stint as consul general in Los Angeles, said a standard Canadian tactic when confronted with U.S. trade complaints is to spotlight contradictions in the U.S. position.

Copps did that by complaining about American limits on foreign ownership of U.S. broadcast outlets and accusing the United States of copyright infringement involving Canadian music performers.

“She’s saying, ‘Look, the Americans are always playing the white knight in this area, but when you really examine it, you can see that if they’re not wearing the black hat, it’s at least a little gray,’ ” Browne said.

Analysts noted that the Canadian government appears to be divided on how to respond to the U.S. victory in the WTO, whose decision is expected to be finalized next week.

International Trade Minister Art Eggleton suggested a reexamination of Canadian trade policies in a speech last month in Toronto, then backed off somewhat Monday after strong protests from the country’s arts and culture establishment.

Media accounts Tuesday also noted that Chretien is expected to call an election this year and Copps’ attack on what she has called “the Hollywood juggernaut” may serve to detract attention from the Chretien government’s record on support for the arts. There has been a steady decline in government grants to artists and performers and in support for the CBC, the state-owned broadcaster, since Chretien took office.

Also along those lines, Copps on Tuesday announced the restoration of $7.5 million in CBC radio funding for this year and promised stable financing for the television and radio network after the current round of cutbacks ends in 1999.

American reaction to Copps’ comments was muted.

The U.S. Embassy here declined comment, as did the Motion Picture Assn. of America, the latter maintaining that it was not in the habit of responding to political speeches.

But even Canadian officials acknowledged that the United States would have a great deal of power in a confrontation over culture and entertainment issues with Canada--which U.S. sources estimate to be the No. 5 market for American entertainment products, after Japan and several European countries.

The United States is a huge and lucrative market for Canadian performers, and any effort to restrict their access to American consumers would be felt deeply here.

Just such a tactic was floated in a previous dispute between the two countries.

In 1994, Canadian regulatory authorities expelled U.S.-owned Country Music Television, which programs music videos, from Canadian cable television systems, replacing it with a similar but Canadian-owned channel, New Country Network.

CMT protested and threatened to reduce the number of Canadian performers in its programming rotation. Some Canadian artists immediately endorsed the CMT position. The dispute was resolved when the two channels merged.

In any trade war with Canada, U.S. trade negotiators would likely aim sanctions at such bread-and-butter Canadian exports as salmon and lumber.

Another weapon in the arsenal: The major Hollywood studios spend about $600 million a year in Canada producing films and television shows, not to mention the investments made by independent U.S. producers on production facilities in Toronto and Vancouver.

Times staff writer Sally Hofmeister in Los Angeles contributed to this report.