Dec 5, 1989
NO ACCORD AT U.S.-EEC TALKS ON TV DIRECTIVE.
GENEVA, DECEMBER 1 (BY CHAKRAVARTHI RAGHAVAN)— Consultations Friday between the United States and the European Community over planned EC and European regulations on use of foreign films and other material on TV appear to have failed. The U.S. has reportedly reserved its position on raising a formal dispute in GATT. The U.S. sought the consultations over the EEC directive on transfrontier television and the Council of Europe Convention on the same issue, which has been signed by four EEC member-states Luxembourg, Netherlands, Spain and U.K. The EEC directive, in the context of its post-1992 single internal market, and the European Convention, provide for percentage of time on TV to be utilised for material originating within the Community and Europe, and material from elsewhere. The U.S. had raised the issue in the GATT Council. The EEC had taken the position that the subject matter did not relate to trade in "goods" which was governed by the GATT framework, but to "services" where GATT had now no jurisdiction. From this viewpoint, the EEC had said in the GATT Council that it was willing to consult on the issue bilaterally with the U.S., a major trading partner, but not as a GATT matter. In the talks today the two sides repeated their respective positions, with the U.S. reserving its right to raise the issue formally in GATT, seek GATT consultations and take the issue for GATT dispute settlement. In its opening statement, and in subsequent questions, the U.S. reportedly adopted a tough tone. In its statement, a copy of which has become available, the U.S. charged that the EC directive and the Council of Europe Convention would have discriminatory effect on import, internal sale, distribution and use of films and other works produced for TV viewing, when these were produced and exported from the U.S. In the U.S. view, these directives and regulations were violative of GATT obligations, specifically the most-favoured-nation clause in article one and the obligations about equality of treatment for domestic and imported goods. While these violations were serious enough, the U.S. charged that these "blatantly discriminatory" measures had been made "even more repugnant" since they had been introduced by some of the most politically and economically advanced countries of the world at a time when all efforts in the Uruguay Round of MTNs were directed at removal of trade barriers. The EEC’s TV directive was much more objectionable since it had been introduced as a part of the programme for unified internal market. The U.S. argued that the films and other material were subject of "bound concessions" in the community's GATT schedule, and thus the EC action impaired U.S. GATT rights. The U.S. demanded that the quotas should be disavowed. The issue, the U.S. delegation warned, was serious and the U.S. was determined to pursue the dispute to a satisfactory resolution. The information available to the U.S. was sufficient to warrant a conclusion about the inconsistency of the directives with the EEC’s GATT obligations. "If we are forced to challenge you in GATT, you will look very bad in the eyes of the system you normally espouse so eloquently. This will be your 'section 3371’", the U.S. delegate reportedly told the EEC at the consultations. The section 337 reference was to the EEC criticism of the U.S. in the GATT Council for blocking for months the adoption of a GATT panel ruling and subsequently refusing to implement it, even when the panel ruling was allowed to be adopted. The GATT panel ruling adverse to the U.S. was over the issue of remedies in section 337 of the U.S. omnibus trade and competitiveness act, and its predecessor trade and tariff act, in regard to the procedures available, to U.S. and foreigners, for enforcement of patent and trade mark rights - procedures different and discriminatory to foreigners. EEC sources said that the U.S. addressed in the consultations questions both to the community and the four member-states in what was seen as an attempt to create a rift among the member-states. However, the responses were only provided by the commission, which claims jurisdiction under the Rome treaty both for goods and services. The EEC questioned GATT competence over the issue, maintaining that the question of content of TV was a service issue and not a goods issue. The EEC noted that one had only to compare the amount of time devoted to U.S. films and other productions in European TV and compare it with the amount of time devoted to European and other foreign material over U.S. TV, to assess the absurdity of the American complaints. The EEC also reportedly claimed that far from reducing imports from U.S., the directive would result in increasing U.S. share of the EEC market. Within five years, the hours of films shown on European TV would increase from the current 150,000 hours annually to 400,000 hours, and with it the U.S. share too. The U.S. reportedly has reserved its position and right to raise formal dispute in GATT and seek consultations within the GATT framework.