Bridges Weekly Trade News Digest • Volume 10 • Number 3 • 1st February 2006

In Brief

KOREA LOWERS SCREEN QUOTAS, FTA TALKS WITH US TO FOLLOW?

Korea announced on 26 January that it would halve its domestic screen quota, placing the launch of bilateral free trade agreement (FTA) talks with the US one step closer to becoming a reality.

The possibility of FTA negotiations between the two countries has been mentioned repeatedly for several years. However, disagreements over thorny issues such as Korea’s protection of its domestic film industry have been standing in the way of getting talks underway.

Since 1966, Korean movie theatres have been required to show home-grown films 146 days per year. By halving this to 73, Seoul appears to be sending a message to Washington that it is eager to begin negotiating.

The US has long insisted that Korea’s screen quota system is a direct impediment to advancing trade talks. In November 2004, the US’ ambassador to Korea, Christopher Hill, said that Korea had to choose between the screen quota system and an FTA with the US.

As required by domestic law, Korea has scheduled a 2 February 2006 public hearing to discuss the potential FTA negotiations. The hearing, which must take place at least two weeks before the country initiates any trade talks, is expected to attract strong opposition from film and agriculture representatives.

The timing of the hearing has led to widespread speculation that formal FTA talks will begin in early February, which could coincide with a visit to Washington by Korean Trade Minister Kim Hyun Chong, scheduled to occur in the upcoming weeks.

Media sources are speculating that both Korea and the US are anxious to get negotiations underway in order to beat the 30 June 2007 deadline which will end the Bush Administration’s ability to "fast-track" trade deals through Congress.

The screen quota reduction is expected to take effect on 1 July.

Korea-US FTA Talks to Start in May," KOREA TIMES, 27 January 2006; "[An Asia Pacific Millennium] Screen Quota for Indie Films?", THE KOREA TIMES, 30 January 2006; "Korea, U.S. Poised to Announce FTA Talks as Korea Opens Film Market," INSIDE US TRADE, 27 January 2006; "FTA Talks With Washington Need Firm Leadership," CHOSUNLIBO, 27 January 2006; "Korea must choose between FTA and screen quota: US Ambassador," DIGITAL CHOSUN, 1 November 2004.