The Korea Herald | Seoul | 20 October 2004
Screen quota system in dispute - again
By Yang Sung-jin
The dispute about Korea`s screen quota system is flaring up again, with government officials squaring off against the local movie industry over whether the "protectionist" measure should be scrapped.
Thanks to the dramatic growth of the local industry over the past years, Korean movies are thriving, accounting for more than 50 percent of the domestic market.
Hollywood movies, controling about 85 percent of the global film market, are now scrambling to get due respect - and ticket revenues - in Korea, which was just a small East Asian market several years ago.
To recover their lost market share, Hollywood continues to mount pressure on the U.S. trade negotiators, who are now refusing to cut a bilateral investment treaty with Korea unless the quota system is abolished, Korean movie officials here said.
On Sunday, the Fair Trade Commission ventured out to call for the scrapping of the screen quota system that requires local cinemas to show Korean flicks for at least 146 days a year.
"The domestic film industry has markedly improved, and homegrown movies need to start competing with Hollywood films (by fully opening up the market)," the FTC said in a report to Rep. Moon Hak-jin of the ruling Uri Party.
Easing or abolishing the quota is part of a long-term strategy to develop local movies, the FTC said, adding that the quota regime is now "counterproductive."
The FTC stressed the need to protect the rights of moviegoers to choose what they want to see and to allow cinemas to select what they want to screen. "Filmmakers have churned out low-quality productions to meet the quota, leading to a waste of money and human resources."
Indeed, some poorly made Korean films are said to have secured slots in theaters with the help of the quota system. Yet it remains controversial whether the quota is stifling competition and diversity for moviegoers as the FTC claims.
According to the Korean and U.S. government logic, the quota system is essentially flawed in terms of free trade principles. The market should be open to unlimited competition as with other trade goods and services, even though such move is bound to help the share of Hollywood films shoot up rapidly and dampen the investment sentiment for fledgling Korean film productions.
But the deep-rooted fear among Korean movie industry people is that if the system is lifted, the portion of Hollywood movies will jump to 90 percent or higher in a couple of years, a scenario that will definitely delight U.S. film distributors yet deal a fatal blow to the fast-evolving yet still fragile Korean film industry.
Another underlying issue is whether movies are different from other goods like mobile phones and flat-screen TVs. Korean filmmakers and production staffs said they believe movies are different.
As cinematic artworks usually represents mainstream culture and trends of a country, some believe the government`s role should be to protect the film industry from being drowned out by Hollywood flicks.
"The United States should bring the issue to the World Trade Organization if it believes the Korean film industry is overly protected in violation of fair trade rules. But it can`t because movies are cultural products and regarded as exceptions to such trade rules," Yang Gi-hwan, general director of the Coalition for Cultural Diversity in Moving Images, an organization that is keen to preserve the quota system.
"Instead, they are pressuring the Korean government officials, mostly pro-American people, to do the job," Yang said.
The longstanding dispute traces back to 1998 when a top government official in charge of international trade claimed that the quota system should be scrapped immediately. At the time, the government`s position was that the quota system does more harm than good to the local movie industry. "The government claimed that Korean films` negligent market share of 15 percent was largely due to the quota system," Yang said.
Korean directors, actors and production staff took to the streets and blocked the government from abolishing the system. But the government resumed its attack on the quotas in 2000, saying that it is time to change the system. The reason: Korean films make up more than 40 percent of the domestic box office revenue, which means they are competitive enough to wean off the protectionist measure.
The movie industry, which is often deemed "militant" by observers, responded with a resounding "never." In March 2003, Korea`s Finance Minister took aim at the issue, arguing that the quota is a major stumbling block for the BIT. The Ministry of Foreign Affairs and Trade threw its weight behind the argument against the quota in October that year, saying that Korea`s trade with the United States is so important and the quota should be sacrificed for greater benefits that will come from the BIT.
"Do we have any viable alternative to the screen quota in order to help the local movie industry secure a sustainable growth? Unfortunately, I think there`s no alternative yet," Yang said.
The bigger - and often neglected - question surrounding the quota dispute is the sheer power of U.S. movie distributors in Korea, Yang said. "U.S. distributors are already wielding enormous power over local theaters here, and once the ban is lifted, it will be a matter of time before most screens will be filled with American flicks not because they`re good but because theaters have no power to reject demands from the powerful distributors," he said.
Meanwhile, Korean movie industry people express worry over the latest developments. "The FTC argument doesn`t have any merit. But what`s important is that some free trade advocates here portray local moviemakers as greedy and selfish, interested in protecting their vested interests only, creating a false perception," said Kim Bong-seok, a movie critic.
"The domestic movie industry should come up with a persuasive logic for protecting the system, or offer at least some concessions. Inside the movie circles, some alternative measures are being discussed, but the problem is that nobody wants to propose such possible solutions openly for fear of enraging some anti-quota people," Kim said.