People in the Korean film industry ask people, who hope for a better world, for support and
cooperation.
Yielding to the US pressure to slash the film quota as a precondition for the Korea-US Free Trade
Agreement negotiation, the Korean government announced, all of a sudden, the reduction of the
screen quota from 40 to 20 percent in January 2006. The current screen quota system requires all
domestic theaters to show local films for 40 percent of the screening time (126 days a year, but
actually 106 days in most cases). With the underdeveloped industrial infrastructure, the film
quota has served for locally produced films as a minimum protection against severe competition
from the Hollywood major producers. The Korean film milieu, in coalition with civil organizations
opposing an unjustifiable Korea-US FTA, have dashed into a campaign against the screen quota
reduction or abolishment with all our strength
Back in 1988, the Korean government gave in to the US trade pressure without prior notice to let
Hollywood major distributors enter the Korean film market, which had not even developed the
foundation for film production due to the military government’s strict censorship and control.
Despite the Koreans’ concerted efforts and commitment during the past two years to the protection
of the film industry, they failed to make the government scrap the decision. After Korea opened
the market to the US, the local films’ market share plunged from 60 percent to 15 percent in 5
years, posing a severe threat to the film industry’s survival. At this critical juncture, the
movie groups established a civic organization to supervise the screen quota system, which in
effective existed only in name, and this resulted in more theaters showing more local films. As
these screen quota watchdogs encouraged more and more theaters to abide by the rules, violations
decreased from 20% in 1993 to zero in 2002, and finally, Korean films’ market share was recorded
as being above 40%.
What enabled the film industry to survive the crisis were Korean film milieu’s strong commitment
to have the quota system in place, the government’s progressive policies including the
significant reduction of censorship and private investments into the audiovisual industries. Under
these friendly conditions, Korean films’ market share went up to 40 percent over the past few
years. Such positive growth, however, is still a baby step and the Korean film industry has not
developed a sound foundation yet with the average production cost at $4 million - below one
twenty-fifth of the major Hollywood films. Despite stark differences, ticket prices are the same
for Hollywood films and Korean films. This is clearly unfair competition. Without the screen
quota, the Korean film industry would face a threat to its survival.
The US has continuously brought up the screen quota issue for years, insisting the quota is a
trade barrier against free competition. Washington is calling on the Korean government to reduce
or abolish the quota system as a precondition for BIT and FTA. In the face of the 1997-98 foreign
exchange crisis the Korean government promised the US it would decrease screen quotas behind a
curtain in order to enter into a BIT with the US. Although the government tried to persuade the
public, saying that a BIT and quota reduction were necessary to overcome the economic crisis it
was only forced to suspend reduction due to strong resistance from the film milieu. Backed by
civil organizations, this led to a failure of the Korea-US BIT.
Meanwhile, both Korean and the US economic department officials realized how economically
significant the screen quota was and started to demand quota reduction or abolishment. Now the US
government is asking the quota be reduced to 20% (73 days per year) as a precondition for resuming
FTA talks. The US government also claims a successful Korea-US FTA, with a condition for the US
military’s strategically flexible operation in East Asia, would alleviate tension between South
Korea and North Korea and increase opportunities for South-North economic cooperation. Such strong
voices from the US led to the Korean government’s announcement of the quota reduction in January
2006. The US Congress also made an official announcement of the beginning of a Korea-US FTA on
February 2, 2006.
Even under the Japanese colonial rule in the past, Korea had protected its language and culture
against Japanese oppression. It means Korea has strong pride about its culture. However, as a
result of pressure from huge Hollywood film makers and media enterprises, the U.S government had
demanded of reduction of Korean screen quota system and the Korean government accepted it. Koreans
regard the demand as unfair intervention in Korean cultural policy. We are concerned if this issue
will lead to Korean people’s antipathy against the U.S.
Culture should never be controlled by international trade agreement such as WTO and FTA. We do not
agree with the US’ claim that movies are no more than commercial products. We believe that films
are the fruits of efforts to create cultural values and to define our own views on communities,
society and the world. One new film adds one new voice and perspective to the world. The same
holds true for American movies. In this regard, we love American films as much as other films
produced in Korea, France, Japan, India, Thailand, Egypt, Russia, China, Serbia and Montenegro,
and so forth. In reality, however, given that 80% of the film trade volume comes from Hollywood,
we have to be cautious about Hollywood films having an excessive market share.
The number of languages in the world has recently decreased by half. The sharp decline is
attributable to the US-centered globalization and the rapid penetration of the Internet. It is
warned that an end to linguistic diversity is as dangerous as the extinction of biological species
to humankind. Powerful Hollywood films are a severe threat to various languages and cultures - not
only films but also music, publishing and broadcasting. It is known there are less than 50 nations
in the world that have cultural industries of substantial size. Potentials for cultural industries
have been greatly damaged even in developed countries such as Britain and Germany, Australia, New
Zealand, and Canada. Taiwan film share in the local market stands at a mere 0.2 percent even with
the world-famous director Hou Hsiao Hsien.
The substantial curtailment of film diversity at the international level does no good to the US
film industry, either. Hollywood is the biggest beneficiary in the world of the global film
markets and diverse creativities of other countries. All of us are well-aware of the fact that
American films continue to evolve on the basis of other countries’ diverse films - even
anti-Hollywood films. However, if Hollywood films keep increasing their global dominance at the
current pace by making various cultures homogeneous, they will find it difficult to produce
creative films and make a creative evolution in the future.
The UNESCO Convention on Cultural Diversity passed by 148 votes to 2, with the US and Israel being
the two dissenting votes, in October in 2005. Under the convention, the international community
agreed cultural products should be different from other global products. Also, we believe that
public healthcare, labor, education, and agriculture should be differentiated. We express our
concerns over the sweeping US-centered globalization, which is driving the public in developing
and underdeveloped countries into the corner, rather than benefiting the world as a whole.
Koreans are not exception in this tragedy of neo-liberalist globalization. Although Korea showed
rapid economic growth and became the 10th largest economy, the public still suffers from a heavy
tax burden and poor social safety net. With the Asian 1997-98 foreign exchange crisis, the Korean
government had to open its financial market, privatize state enterprises and increase labor
flexibility, doubling the gap between rich and poor (of course, which means that the poor take up
almost 90%).
If Korea and the US conclude an unprecedented FTA within a year that requires a 100% open market
as the US requests, Korea’s social safety net and public sectors would lose capacity and the
majority of Koreans will be at risk and we are sure of this. In this light, we oppose not only the
screen quota reduction but also Korea-US FTA negotiations, which only involve unilateral
globalization centered on the developed world.
Now, the Korean film milieu asks for a coalition with and support from American people who have
contributed to making progress in the world with a good conscience and will. We ask everyone, at
the individual, organizational and association levels, to express your support in a method you
feel convenient, such as providing your signature, personal e-mail and/or holding a press
conference, for the preservation of the screen quota system, and express your opposition to a
Korea-US FTA and the US-oriented neo-liberal globalization. Your encouragement and coalition
movement will provide a significant opportunity to let the world witness American consciences and
will be an important wind of change. This will inspire the public and the film milieu with hope
and courage.
In order to submit the attached letter of comments signed by you to the House during its public
hearings, which starts on March 24, please send it to us through our e-mail(cdmi korea.com) or
fax(82-2-319-2039) by noon (in Korean time) on March 21.
Screen Quota Action Alliance (Alliance of the Korean film milieu, which oppose screen quota
reduction and a Korea-US FTA)
Comments on the U.S. - Korea FTA
We want coexistence and exchange.
Based on the screen quota system, Korean films have developed significantly. Its share increased
from less than 20 percent in the early 1990s, to about 50 percent in 2005. In addition, the number
of moviegoer was just 58million in 1999, but it exceeded 130million in 2004. Moreover, several
Korean films won prizes at leading international film festivals, making Korean films be popular
among many foreign audiences. Pusan International Film Festival, launched in 1996 in Korea, is now
recognized as the largest film festival in Asia. Screen quota system was the driving force behind
these developments of the Korean films.
Yielding to the US pressure to slash the film quota as a precondition for the Korea-US Free Trade
Agreement negotiation, the Korean government announced, all of a sudden, the reduction of the
screen quota from 40 to 20 percent in January 2006. The current screen quota system requires all
domestic theaters to show local films for 40 percent of the screening time (126 days a year, but
actually 106 days in most cases). With the underdeveloped industrial infrastructure, the film
quota has served for locally produced films as a minimum protection against severe competition
from the Hollywood major producers. The Korean film milieu, in coalition with civil organizations
opposing an unjustifiable Korea-US FTA, have dashed into a campaign against the screen quota
reduction or abolishment with all our strength
Korean film industry argues that the screen quota system is necessary for the reasons as follows.
First, we believe it is imperative to maintain and develop our traditional culture.
Cultural industries are needed to preserve culture, traditions, and language. Preserving a
country’s culture promotes its sovereign equality and protects human rights by enabling its people
to celebrate and maintain their cultural integrity. In this century, as the film industry becomes
key factor in the national culture in general, we need to preserve and develop film industry for
the next generation of Korea.
Second, I would like to talk about the right to differ and right to exist. We respect worldwide
efforts to preserve species diversity through protection of whales and dolphins. Preserving
diversity is critical not only in nature but in society. Throughout the history of humankind,
countries have learned precious lesson to recognize and respect each other’s diversity in
religion, race and culture in hard ways through terrible wars and tragic ethnic conflicts. Now, we
believe diverse society is better than monolithic one and our belief is shared by most of
countries.
For example, with the affirmative action, U.S. government is taking special steps to ensure
adequate representation of racial minorities in the society. Also, the supreme court of the United
States has stressed that the government has a compelling interest to maintain diversity in
society.
Those efforts show clear advantage of having diverse culture rather than monolithic culture
anywhere. Namely, enhancing the understanding of diversity is a means for all of us to prosper
together. Of course, recognizing differences is not free. It may be expensive and difficult, but
it is worth it.
We do not want to standardize everything in worldwide scale for the sake of free trade. We neither
say all countries should convert to metric system abolishing milege system nor we insist to
abolish federal system in some countries at once even though those systems can be the obstacles in
the international trade. Rather, we respect the cultural and political differences among nations.
By imposing the screen quota, we are not asking 100% of domestic market share. We are asking just
the minimum level of opportunity to expose our audiovisual products to local audiences for the
balanced development of global culture industry. We advocate co-existence and trade rather than
annihilation and isolation. It accords with the purpose of the UNESCO Convention on the Protection
and Promotion of the Diversity of Cultural Expressions, which was adopted by overwhelming support
by 148 member nations at the 33rd UNESCO general assembly in October 2005.
Third, screen quota is for fair competition. Some include culture as a part of international trade
negotiation. We disagree. However, for the sake of argument, let’s assume that film can be
governed by fair competition laws of the developed countries.
Some espouse the strictly economic comparative advantage theory free of governmental intervention.
This theory says that it is most efficient for countries to trade goods they can most efficiently
produce, and that the absence of consumer choice is inefficient.
However, completely unfettered free trade is not the efficient reality, even from an economic
perspective. To promote and preserve fair competition, some times government intervention is
necessary, because the existence of monopolies contradicts the very essence of free enterprise by
threatening the efficiency of market, reducing innovation slowing economic growth, and subjecting
society to the will of a "small handful of dominant market players.
Anti-trust laws as well as fair competition laws are enforced to provide an opportunity to compete
to all players in the market. If the market is dominated by a few market players, the beauty of
market economy is threatened. This belief is universal. We are told that Americans have a strong
concern on the centralization of power because a monopoly could infringe on individual rights and
the equal rights of citizens.
Historically, the U.S. government has showed it strong commitment against monopoly by dividing big
corporations such as AT&T and Standard Oil. Currently, U.S. government is suing Microsoft to
lessen the dominant market power of the company. We respect such commitment of U.S. government
against market monopoly.
Now, let’s talk about the cultural industry.
In cultural industry, market forces, in the absence of barriers like screen quota, are not
sufficient to protect domestic industries. In many cases, small domestic producers simply cannot
compete with foreign competitors who have enormous amount of initial investment and a lower cost
per unit, amortized over much larger markets. As a result, domestic cultural industries are
collapsing rapidly since they cannot reach certain level of size required to survive.
We consider this clearly an unfair competition in violation of the very basic of WTO principles.
Now you see that the screen quota is for the right to exist as well as right to be differ.
Those who argue that Korean film industry can commercially survive and prosper without screen
quota should answer the following question with yes. Is the domestic film industry commercially
viable in most of the countries in Asia and Latin America where screen quota has been rare?
Therefore, we need screen quota just like we need anti-trust laws and fair competition laws.
Fourth, some may argue that screen quota system is impractical as it is hard to enforce in the era
of internet. Yes, as times goes by, different cultures are coming closer to each other. It is
getting hard to identify nationality of contents. Nonetheless, we ask those people to leave the
practicality issue to each government. It is too early to render any judgment on that issue yet.
Throughout the history of humankind, human race has eventually overcome many obstacles which
looked unbeatable at first. Even today, no matter how difficult it is to wage a full scale war
against illegal drugs in some countries, as you know, this is the kind of war government cannot
easily give up.
Likewise, we will not give up our efforts to preserve and protect cultural diversity in the
cyberworld.
Whether it is technically possible or not, in reality, government often regulates through rules
that structure, instead of ban, certain activities in internet in order to balance the need for
the Government to meet legitimate community concerns about the integrity and diversity of
contents. This feature of law-as-organizer (instead of law-as-proscriber) is nothing new.
For example, the United States has imposed many forms of contents based- online restriction, by
statutory regulations and the judiciary decisions to serve the government interest such as
Children’s Online Privacy Protection Act, and Digital Millennium Copyright Act.
In conclusion, for the reasons mentioned above, the screen quota system has been and shall be
enforced in Korea. It is for diversity and enrichment of global culture in audiovisual sector.
Screen quota is about human right to exist and to differ. At this time, we would like to propose
to establish an international organization to promote and protect species diversity issue in this
audiovisual sector. We are ready to take leading role in the formation of the new organization. We
hope to build or strengthen a global organization to oppose any new agreement which could
jeopardize the ability of all countries to promote indigenous cultural expression.
Nevertheless, the Korean government accepted the U.S government’s excessive demand for reducing
the screen quota by half on condition that the two nations enter into FTA. Korean film industry is
making every effort to protect the screen quota system against the Korean government’s wrong
decision. We believe we should protect the screen quota system in order to protect and develop
Korean films, and to contribute to cultural diversity.
We want the U.S. Congress to make right decision so that Korea can protect the purpose of the
UNESCO Convention on the Protection and Promotion of Diversity of the Cultural Expressions, which
was adopted in October 2005. We believe Korean films should never be threatened by the U.S.-Korea
FTA and we believe every nation’s film and culture should be exchanged and coexist. This is the
way to contribute to the world’s peace.
Thank you.
Name
Address/e-mail
Phone no.
Signature