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For Hollywood, It's the Same Old Script : GATT: Failure of the global trade pact to address entertainment issues means a continuation of status quo.


Hollywood executives on Wednesday viewed their industry's failure in this week's Geneva trade talks as something like a major film deal that falls apart. While obviously disappointed at the lucrative opportunity that slipped away, the situation isn't dire because what remains is the status quo.

At issue was whether the entertainment industry could get itself included in the far-reaching General Agreement on Tariffs and Trade. Had that happened, Hollywood would have struck a blow against entertainment protectionism by easing barriers, such as quotas on films broadcast on French television and music on radio. That would have significantly boosted growth opportunities for an industry that increasingly relies on foreign revenue for its success.

Instead, Hollywood was left out of the agreement after Europe refused to budge, with prospects uncertain that the issue will ever surface again. That means Hollywood woke up Wednesday to the same kind of quotas and levies it has had to deal with for some time.

"The world is filled with barriers of one sort or another to fair trade," said Stan Coleman, an entertainment lawyer. "That's an environment the entertainment industry in the United States has always faced."

Some suggested that the major studios, through the Motion Picture Assn. of America trade group and its chief, Jack Valenti, overplayed their hand, giving the impression that GATT was an ominous issue with no less than Hollywood's survival at stake. As a result, the GATT failure has led to some suggestions that Hollywood has lost its clout.

"It's not the end of the world. Valenti positioned himself badly on this," one senior executive said.

Still, the issue remains a hot political topic. A spokesman for Gov. Pete Wilson said the governor considers it "outrageous" that President Clinton would go ahead with the trade pact while leaving Hollywood behind. Wilson was planning to speak with industry leaders and a formal statement was expected today.

One concrete fear that exists among Hollywood's talent guilds is that the protectionism will prove contagious, with other countries expanding barriers and incentives for production work to be done overseas instead of Hollywood. One common concern heard among union leaders was that Europe will unite for an "Airbus" strategy in entertainment, drawing an analogy to Airbus Industrie, the European aerospace consortium that competes with U.S. passenger jet manufacturers.

However, some believe that advances in technology may mean inclusion in GATT is not as important as it may have been in the past. The thirst for American entertainment in Europe continues to grow, with 70% of the theatrical box office in France and 90% in Europe overall dominated by American films. As broadcast channels proliferate, they argue, so will the demand for films.

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