S Korea to cut screen quota to boost FTA talks with US

Forbes

S Korea to cut screen quota to boost FTA talks with US

25 January 2006

SEOUL (AFX) - South Korea said it would reduce by half its screen quota for domestically produced films, in a move aimed at facilitating talks with the United States on a free trade agreement (FTA).

South Korea has operated a protectionist screen quota system for decades whereby cinemas must show domestic movies on at least 146 days a year.

’The government has decided to take necessary measures to reduce the quota to 73 days a year beginning July 1,’ Finance and Economy Minister Han Duck-Soo said, according to Agence France-Presse.

The quota has been the main obstacle to talks on free trade talks with the United States.

In a speech last week, South Korean President Roh Moo-Hyun said that establishing an FTA with Washington was a top priority for his government.

However, the South Korean film industry is opposed to a reduction or removal of the quota despite the success of the domestic film industry, which holds a 60 pct share of the local movie market.

The screen quota system was adopted in 1996, according to Han, and was aimed at protecting the domestic film industry from foreign competition, specifically against Hollywood movies.

Han, who is also the deputy prime minister, said that halving the quota would boost the chances of signing an FTA with the United States and other countries.

South Korea, the fourth-largest economy in Asia, heavily depends on exporting such industrial goods as semiconductors, autos and ships, to markets abroad to maintain its growth.

Being key trade partners, South Korea and the United States have made no progress in preparing for free trade talks with South Korea’s heavily protected agricultural and filming market drawing US complaints.

Last week President Roh said an FTA with the United States was necessary to boost South Korea’s economy. But the United States has said that the quota had to be reduced or eliminated before free trade talks could begin.

South Korea has a free trade agreement with Chile and signed another with Singapore and the four-nation European Free Trade Association, comprising Switzerland, Norway, Iceland and Liechtenstein.

Seoul is currently in the process of seeking similar deals with Canada and the Association of Southeast Asian Nations (ASEAN).

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