WASHINGTON U.S. movie companies who depend on exports for more than half their revenue hope a proposed trade agreement will eliminate customs difficulties as the industry abandons film in favor of digital formats, an industry official said on Thursday.
"The iconic spools of film we're all familiar with will soon be relegated to the Smithsonian," Greg Frazier, executive vice president for the Motion Picture Association of America, told the U.S. International Trade Commission.
"By 2016, virtually every movie screen in the world will be a digital screen," Frazier said at a hearing on proposed talks to expand the 1996 Information Technology Agreement (ITA) which eliminated duties on many information technology goods.
"When you go to see the new (James) Bond movie that opens this weekend, you're probably going to see it in digital format," Frazier said.
The U.S. Trade Representative's office has asked the International Trade Commission to examine the potential gains to the U.S. economy from expanding the 15-year-old pact to products like video game consoles, headphones, speakers and all flat-screen monitors for both televisions and computer screens.
Talks among the 70 current member countries of the ITA pact are expected to begin next year in Geneva, with U.S. technology companies hoping for a quick deal to expand exports.
Frazier told the panel the U.S. movie industry wants "digital cinema packs," which have replaced traditional film reels, included in an expanded agreement.
The devices didn't exist when the first ITA was negotiated in 1996. But by last year there were more digital screens around the world than traditional screens, something that has dramatically cut the cost of distributing movies, Frazier said.
Including the digital cinema packs in an expanded duty-free pact should prevent costly customs problems that have cropped with film reels, he said.
In some countries, customs officials determine movie tariffs based on the length of the film, he said.
"We were shut out of one market for six months because of various machinations of customs officials," Frazier said.
(Reporting By Doug Palmer; editing by David Brunnstrom)