Hollywood Is Hardly An Innocent Victim In Trade Disputes

from the poetic-justice dept

My Cato colleague Sallie James describes the ongoing standoff between the US and the rest of the world at the World Trade Organization over gambling. When Congress banned online gambling, tiny Antigua filed a complaint alleging that the actions violated WTO rules. Antigua won, but the United States has so far bullied them out of taking advantage of their victory. The US has threatened to retaliate against Antigua if the latter begins targeting US copyrights as authorized in the trade ruling. James says that the United States is in the process of negotiating alternative compensation, including increased access to other American services markets. If that deal falls through, she warns, Hollywood might find itself "footing the bill" for the US government's ill-conceived gambling ban.

I certainly agree with her that the gambling ban was a bad idea, but I'm not sure it makes sense to paint Hollywood as an innocent victim here. After all, Hollywood has been pushing for decades to link trade policy and copyright law, going so far as to support free-trade agreements that include terms micro-managing other countries' copyright policies and requiring them to enact laws like the DMCA as a condition of access to American markets. Free traders rightly object when special interests try to use free trade agreements as a way to coerce countries into enacting their preferred labor and environmental policies. We should be equally incensed when Hollywood lobbies for the use of trade agreements to coerce countries into enacting their preferred copyright policies. So there's a certain amount of poetic justice in the fact that Hollywood has found its copyrights in the crosshairs of a trade dispute. James also correctly notes that retaliatory tarriffs are an insane way to impose damages on the losing country in a WTO dispute because tariffs hurt consumers in the "winning" country at the same time it hurts producers in the "losing" country. In contrast, if damages are imposed by targeting copyright law, consumers in the winning country will actually be made better off by lower prices for the copyrighted products in question. So while it would be best of Congress repealed its idiotic gambling ban, I'm not going too upset if Hollywood's attempts to link copyright law to trade policy come back to bite them.

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  • identicon
    maths, 2 Jan 2008 @ 9:16pm

    Poetic Justice

    Indeed, the one striking point of this whole affair has been how a tiny nation has reversed the very same tactics that the US has been using to coerce and beat other nations into submission of its TRIPS terms. You live by the sword, you die by the sword. An examination of how it affects the music industry can be found at Music2.0. Even though the WTO award states that Antigua can only have access to US$21 mil worth of copyright infringements, with digital music especially, there is no reliable recourse to monitor revenues, and for all practical purposes it seems that Antigua is basically getting an unlimited free pass to gorge themselves silly on US copyrighted and trademarked products.

    reply to this | link to this | view in chronology ]

  • identicon
    nick, 10 Jan 2008 @ 5:30am

    I disagree

    It's not like Antigua is allowed to withhold $21 million from just Hollywood or the major labels, it gets to withhold that from anything under copyright in the US. This could come from anyone, photogs, authors, indie musicians, anyone. I still don't understand how this is fair, or even how this legal. What right does the WTO have to take away the rights of US citizens (the rights of distribution and reproduction being rights much different from the right to set one's own price for their goods)?

    reply to this | link to this | view in chronology ]

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