OECD accord rings alarm bells

Date: 15/01/1998

By Peter Chapman

EU EFFORTS to boost its beleaguered film and television industry will be put at risk if a draft international accord aimed at giving foreign investors a fairer deal goes ahead, claim MEPs.

Members of the European Parliament's culture committee warn that if the Union signs up to the 'multilateral agreement on investment' drafted by the Organisation for Economic Cooperation and Development (OECD), foreign firms would be free to milk cash from EU programmes set up to give its own media sector a fighting chance in the face of virtual US domination.

British Socialist MEP Carole Tongue, who is drafting a report on the issue, said trade provisions such as 'national treatment' and 'most favoured nation' clauses giving countries special rights in foreign markets would be applied in full to the audio-visual sector unless special exemptions could be agreed.

"This would mean that third countries with their own flourishing audio-visual industries would have access to EU and member state systems of aid, like MEDIA II," said Tongue. "It would negate the original aims of these programmes and would mean that they would no longer be viable."

She claims that as well as damaging Europe's media industry, signing the accord could run counter to EU treaty provisions which call on the Union to respect and promote the diversity of cultures.

But EU sources close to the negotiations on the OECD accord, which could remove the red tape faced by foreign investors in third country markets, reject the warning outright. They say the Union is not ready to say goodbye to the special treatment it won for the media sector during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in December 1993.

"Clearly it is not yet a finished treaty and people are allowed to be worried about it. But the EU takes this issue very seriously. We have made it clear that we would not accept anything that goes beyond GATT '93," said one.

The cultural issue first found its way on to the global trade agenda following US attempts to win concessions for its successful film industry. "But the Americans have now given up and understand they will not be able to induce us," said the source.

Although trade diplomats have pencilled in late April as the initial deadline for an end to negotiations on the OECD accord, they admit that the future of the agreement hangs in the balance while the EU and US are unable to sort out their dispute over the latter's Helms-Burton act, which effectively blacklists US and foreign investors in Cuba.

"If we don't get progress on Helms-Burton, then the whole thing will be dead on arrival in any case," said one.

MEPs argue that if the EU signs up to the draft OECD multilateral agreement on investment, EU efforts to support its film and television industry could be put at risk.