Valenti speech signals U.S. desire to deal with cultural quotas in trade talks: CAB exec

A speech by powerful U.S. film executive Jack Valenti in Ottawa on February 7 hints at potentially fractious trade talks this summer, warns an executive with the Canadian Association of Broadcasters (CAB). Erica Redler, the CAB’s general counsel and senior VP of policy and legal affairs, believes Valenti’s comments foreshadow U.S. demands for an end to quotas for cultural products and Canadian content requirements on television in upcoming trade talks. Valenti, a powerful champion for Hollywood in Washington D.C. and head of the influential Motion Picture Association of America (MPAA), was a speaker at the annual conference of the Canadian Film and Television Production Association (CFTPA). He used the occasion of his first public comments in Canada in 11 years to argue vociferously against quotas, duties, and other barriers to trade in TV and film products. Film and TV production nears $5 billion in CanadaTotal film and television production in Canada reached nearly $5 billion last year, according to a state-of-the- industry report released last week by the Canadian Film and Television Production Association (CFTPA). Foreign location shooting accounted for $1.8 billion of that total, up from $1.5 billion the year before. Canadian certified production was pegged at $2 billion, while non-certified production and broadcaster in-house production was $1.2 billion. The figures are contained in Canadian Film and Television Production Industry Profile 2002, an annual report compiled by PwC Consulting on behalf of the CFTPA and its Quebec counterpart l’Association des producteurs de films et de télévision du Québec. The film and television production industry accounted for 134,000 direct and indirect jobs, according to the report.Although couched in crowd-pleasing language defending the practice of offering tax credits to lure "runaway" productions to Canada, Valenti nevertheless touched a nerve with at least some of the audience who heard in his speech a push for free trade in the cultural arena. "My own sentiments are…from Mr. Valenti’s comments was the realization that what we hear from him is probably going to be pretty close to what we will hear from the U.S. government," Redler said. "And, that sent a chill through at least me, and perhaps the rest of the room, as I heard him putting forward the argument for cultural free trade," she added. Although he defended tax credits for film and television production, and told the audience he was actively opposing attempts by some in Hollywood to introduce countervailing duties to curb runaway productions, Valenti was still clear in his disapproval of "barricades" to free trade. "Competition should flourish. It is citizens in each country who decide what movies they want to see, what TV programs they want to watch," said Valenti, adding that the only thing that can help a television show is to make it good. "But some governments are infected with a theory which deludes them into believing that if they put up barricades to exile or restrict TV programs and films which may compete with local creativity, their local creative industry will leap into a prosperous future, like Athena springing full blown from the forehead of Zeus," he added. "No president, no prime minister, can command great programming to be made nor can any Congress or Parliament order citizens to watch what they do not want to watch." "We all must export or we shrink," he added, pointing out that only two U.S. films in ten are able to recoup their investment through domestic theatrical exhibition. Producers, CBC close to finalizing terms of trade dealA terms of trade agreement, aimed at facilitating business relationships between the Canadian Film and Television Production Association and the Canadian Broadcasting Corp., is close to being ratified. "We are delighted to be recommending this agreement with the national public broadcaster," said Stephen Ellis, CFTPA chair, at the association’s annual conference in Ottawa on Feb. 7. Negotiations on the terms of trade deal have been ongoing since the 1999 Banff Television Festival. Once the agreement with the CBC has been inked, the CFTPA will proceed in negotiating a similar agreement with CTV Inc. (CCR, Dec. 21/00).In a session the morning after Valenti’s speech, Redler predicted that quotas would end up in trade negotiations. On the panel of the session entitled Trading Culture At What Price, she noted: "These (quotas and content regulations) are not the only measures that we can expect will be attacked" when the U.S. files trade grievances. Other areas that could come under scrutiny, according to Redler, are Canadian ownership regulations and simultaneous substitution rules. In an interview with CCR, Valenti commented briefly on simultaneous substitution: "My own judgement is that I have not gotten into the television that much. I’ve concentrated on movies. But I think the less interference by government in this area, the better." If these types of barriers move to the forefront, Redler worries that there could be retaliatory threats on other industries such as agriculture. When Canadian Heritage minister Sheila Copps, for example, was pushing her magazine bill that would have required a minimum amount of Canadian content in split-run magazines, the U.S. threatened a backlash against other sectors, including the steel industry. Under pressure from the Department of Foreign Affairs and International Trade (DFAIT), in the end Canadian Heritage was forced to revert to a subsidy model to help Canada’s magazine industry. "The broadcasting industry in this country is dependent upon some of the measures that Mr. Valenti has taken aim at," Redler said. Copps’ answer is a new international instrument on cultural diversity (NIICD), a concept that she has been advancing with cultural ministers around the world for the past few years (CCR, Oct. 13/00). The NIICD would see cultural goods treated separately from other commodities in international trade deals. The concept, however, has not spilled over from the cultural sphere to trade talks, according to another panel member Don Stephenson, director general of Trade Policy II at DFAIT. Reiterating comments made by another department official last June (CCR, June 21/01), Stephenson said the cultural sphere was the place for talks about the NIICD to develop. However, he said the next step – conveying the results of those talks to trade ministers around the world – has not yet occurred. "We got no support when we brought the international instrument on cultural diversity forward in trade talks," he said in an interview with CCR following his appearance on the panel with Redler. "We didn’t get any outright opposition, but not one country would support us. We had to withdraw it from the table." Spending on Canadian Acquired Programming2000-01Share1-Year 5-Year(in millions)Growth CAGR*Specialty$20162%17%19%Pay$268%74%14%Private broadcasters$10031%3%7%Total$327100%15%14%* Compound annual growth rateSource: Canadian Film and Television Production Association Industry Profile 2002, February 2002.

Valenti speech signals U.S. desire to deal with cultural quotas in trade talks: CAB exec

Broadcast | February 15, 2002

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