WHY HOLLYWOOD LOST THE URUGUAY ROUND: THE POLITICAL ECONOMY OF MASS COMMUNICATION REVISITED David Charles Steinberg London School of Economics and Political Science Ph.D. 16 March 1999 1 UMI Number: U131085 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U131085 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 ) H£S£S l)\7zo ABSTRACT In this dissertation I examine the reasons why the U.S. film industry lost the GATT-Uruguay Round negotiations on audiovisual services and intellectual property rights (IPRs) related to copyright. I revisit the political economy approach to communication and implement Mosco's (1996) suggestions on the approach's renewal. Mosco notes that political economists of communication thematically view the state as supporting transnational business (1996, p. 94). However, Jarvie's (1992) analysis of the relationship between the U.S. government and film industry between 1920 and 1950 suggests that this 'support' theme does not adequately capture the often antagonistic and unproductive relationship between the two parties. I extend Jarvie's (1992) work by developing themes from his scholarship and applying them to a case study on the Uruguay Round. I review the literature on the media-cultural imperialism thesis and focus on Herbert Schiller's (1969 [1992], 1976, 1989) scholarship. Schiller's thesis implies that outcomes in international relations are dictated by domestic determinants such as the influence of corporate lobbyists. However, I argue that the reasons why Hollywood lost lie not in domestic determinants alone, but in a broader perspective (derived from the discipline of international relations) that focuses on the interaction between domestic trade politics and international relations (Putnam, 1988 [1993]). Putnam characterises international negotiations as an interactive process involving the bargaining between negotiators and the separate discussions each delegation has with constituents in its domestic market on the ratification of the agreement. I assess themes from Jarvie's work and propositions from Schiller's thesis using Putnam's (1988 [1993]) two-level analysis and empirical evidence from primary documents and thirty-five interviews conducted over a three-year period (1994 to 1997) with U.S. and European negotiators and film executives. I argue that U.S. domestic trade politics hampered efforts by U.S. negotiators to reach a bilateral accord on audiovisual services and IPRs related to copyright because of linkages forged by EU Member States between progress in those talks and progress in talks on agriculture, maritime transport services, geographic indications related to wines and anti-dumping. A second obstacle to a bilateral accord was an influential hawkish minority of the Hollywood lobby, who set an aggressive agenda for U.S. negotiators and set off a chain reaction in the final moments of the Round that led to Hollywood's defeat. Finally, I present an alternative scenario to the argument (cf. Waregne, 1994; Dehousse and Havelange, 1994; Joachimowicz and Berenboom, 1994) that the French government dictated the outcome of the audiovisual services and IPRs negotiations. My scenario emphasises the preeminent status of the General Affairs Council, the role of EU Member Statesother than France, and Commission efforts to forge a bilateral deal. In the end, the hawks dictated the outcome of the audiovisual services talks, while a majority of EU Member States dictated the outcome of the talks on IPRs related to copyright. 2 To Tracy and Max 3 ACKNOWLEDGEMENTS My thanks to the staffs of the following libraries, reference centres and organisations: American Embassy, British Library of Political and Economic Science, British Library Document Supply Centre in Wetherby, British Library Newspaper Library in Colindale, Canadian High Commission London, Commission of the European Communities, Council of the EU General Secretariat, Department of Trade and Industry, EC Representative to the UK, European Parliament (London), Independent Television Commission, International Intellectual Property Alliance, London Business School, Office of the United States Trade Representative, Royal Institute of International Affairs, University of London (Senate House), University of Minnesota and University of Westminster. My thanks to the following people who provided me with documentation or advice: Alistair Abercrombie, Maria Bell, Bev Brittan, Carolyn Dailey, Anthony Davis, Helene Duchene, Dr. Rob Farr, Ray Gallagher, L. Goebel, Mark Green, Professor Brian Hindley, Conny Caruso Hutchinson, Laurent Lemarchand, Saturnino Munos-Gomez, Ariane Joachimowicz, Dr. Mario Kakabadse, Andre Lange, Dr. Sonia Livingstone, Hamid Mamdouh, Jonas Rosenfield, Norbit Schwaiger, Rosemary Shabenski, Frances Shipsey, John Siegmund, Kathryn Stevens and Yvon Thiek. My thanks to the following people whom I interviewed for my dissertation: Frans Andriessen, Amaud Bordes, Karl Falkenberg, Cathy Field, Dr. Jacques Gorlin, Tervor Heaton, David Hollister, Marie-Therese Huppertz, Philippe Kern, Mike Kirk, David Lowe, Ambassador Bernard Miyet, John 4 Newbigin, Ambassador Hugo Paemen, Don Phillips, Raymond Raith, Dr. iur. Jorg Reinbothe, Bonnie Richardson, Pascal Rogard, Jonathan Scheele, Neil Turkewitz and Hannu Wager. My thanks, too, to all of my information sources who requested anonymity. My thanks to Vanessa Cragoe and Susie Atherton for helping me with administrative details throughout my stay at the LSE. My thanks to Professor James Curran and Professor Vincent Porter for serving as my examiners. My very special thanks to my supervisor, Dr. Richard Collins, who stuck with me through the good times and the not so good times. I will miss our frequent discussions about my work. I am privileged to call Richard a friend. 5 TABLE OF CONTENTS Acronyms 7 Introduction 9 Chapter 1 An Assessment of the Political Economy Approach to Communication 34 Chapter 2 Part I — The Media-Cultural Imperialism Thesis 65 Part II — Mosco's Micro-Macro Approach and Putnam's Two-Level Analysis: Interdisciplinary Concepts 92 Chapter 3 Methods: Trade Negotiations and the Sensitivity Factor 105 Chapter 4 Communication as a Commodity in the Uruguay Round 117 Chapter 5 Build Up to the Uruguay Round: CUFTA, NAFTA and the Television Directive 131 Chapter 6 Hollywood Hawks: Their Own Worst Enemy 156 Chapter 7 Part I — France's Role in the Uruguay Round Audiovisual Talks: Dictator or Gadfly? 170 Part II — Battle Over Sir Leon's Negotiating Mandate 191 Chapter 8 Conclusion 194 Appendix A 205 Appendix B 208 Sources 210 6 ACRONYMS ACTPN — U.S. Advisory Committee on Trade Policy and Negotiations AFMA — American Film Marketing Association L'ARP — Societe des Auteurs, Realisateurs et Producteurs (Association of Writers, Directors and Producers) BF&DC — U.S. Dept, of Commerce's Specialties Division of the Bureau of Foreign and Domestic Commerce (later known as the Motion Picture Division) CSA — Conseil Superieur de L'Audiovisuel CNC — Centre National de la Cinematographic CUFTA — Canadian-U.S. Free Trade Agreement COREPER — Committee of Permanent Representatives of EU Member States DM — German mark (currency) EBU — European Broadcasting Union EC — European Community EEA — European Economic Area EFTA — European Free Trade Association EU — European Union GATT — General Agreement on Tariffs and Trade GOP — Grand Old Party (Republican) IPE — International political economy IPRs — Intellectual property rights ITO — International Trade Organisation IIPA — International Intellectual Property Alliance IP AC — U.S. Industry Policy Advisory Committee IS AC 13 — U.S. Industry Sector Advisory Committee on Services for Trade Policy Matters MFN — Most-favoured-nation principle MPA — Motion Picture Association (foreign division of MPAA; formerly MPEAA) MPAA — Motion Picture Association of America MPEAA — Motion Picture Export Association of America (formerly MPEA) MPPDA — Motion Picture Producers and Distributors of America MTN — Multilateral trade negotiation NAFTA — North American Free Trade Agreement 7 NIEO — New International Economic Order NTB — Non-tariff trade barrier NWICO — New World Information and Communication Order PAC — Political Action Committee RIAA — Recording Industry Association of America SAC — Sector Advisory Committee SPAC — U.S. Services Policy Advisory Committee STR — Special Trade Representative TNC — Transnational corporation UIP — United International Pictures UN — United Nations USTR — United States Trade Representative (formerly STR) VOD — Video-on-demand WIPO — World Intellectual Property Organisation WTO — World Trade Organisation 8 INTRODUCTION Media scholars should take note of the U.S. government's inability to satisfy the U.S. film industry in the GATT-Uruguay Round. Scholarship abounds on the success of the U.S. film industry in foreign markets. One camp focuses purely on commercial and economic reasons (c.f. Bjom, 1992; Hoskins and Mirus, 1988; Hoskins and Mcfadyen, 1991; Kruse, 1994; Pragnell, 1985; Pool,