California Arm-Twisting Stirs Reaction at GATT Talks

WITH Wednesday's deadline for agreement in international trade liberalization talks fast approaching, the Washington's insistence that trade in audio-visual products figure in any final accord does not have some Europeans leaders belting out ``Hooray for Hollywood.''

The US position, which the Europeans claim has hardened in recent days, is also giving the Europeans a lesson in the weight California has in US electoral politics.

As the General Agreement on Tariffs and Trade talks in Geneva appeared to bog down over the weekend, Peter Sutherland, director general of GATT, warned the United States and the European Union that ``time is not working in your favor,'' and said they would be responsible for any failure in the talks.

Textiles and maritime transport were two other areas where progress was slow. Protecting European culture

For the French especially, who insist on exempting audio-visual products - movies, television programming, and music - from trade liberalization as a way of protecting ``European culture,'' the US position on the audio-visual sector is tantamount to guaranteeing the Americans a monopoly.

``California's movie industry is already predominant, we will not accept that it gain a monopoly,'' said French Foreign Minister Alain Juppe. American movies already take 80 percent of European film receipts. The French say US demands would result in that share going higher - and would wipe out even more of Europe's once-flourishing film business.

But the Europeans are also discovering just how important a political power the movie business is in the US - especially in President Clinton's America.

``We're finding out that the Hollywood lobbies are much stronger than the French farmers, whom the world for so long claimed were going to hold up a trade agreement,'' Mr. Juppe says.

That Jack Valenti, president of the Motion Picture Association of America, has been in Geneva during the GATT talks, was a hot topic of conversation at the weekend's European Union summit.

The Hollywood movie mogul met with US Trade Representative Mickey Kantor yesterday.

``We have been very flexible,'' Mr. Valenti told reporters as he entered the meeting with Mr. Kantor across the street from GATT headquarters. ``We have tried to compromise over and over and over again.'' he added.

Valenti, one of the many American lobbyists in Geneva to push their industries' interests, has spearheaded Hollywood's effort to gain greater access to the European markets.

``I didn't know how powerful California was,'' Juppe says. But he now acknowledges that the movie business is southern California's last growth industry in a recessionary climate, and that California could determine who wins the US presidency in 1996.

President Clinton does not want to disappoint a state already reeling from defense cutbacks.

Even British officials, who are less excited about the audio-visual issue, now recognize, according to one spokesman that, ``This is a political issue in the US, or should I say in California.'' British officials say it would be ``lunacy'' to miss a growth-inducing trade liberalizing accord over movies and cassettes. Big money in audio-visual sales

The money behind this contentious issue is big.

European officials point out that sales of audio-visual products in Europe are expected to double by the end of the decade, to more than $50 billion. Growth is expected to accelerate with new technologies and the expansion of cable services in Europe.

That is one reason why European leaders, prodded by France, called this weekend for an ``exception'' for cultural products from trade rules to apply ``for the present and for the future.''

Yet many experts believe that time is on Hollywood's side.

With satellites and other technologies blurring borders, national conceptions of transmitted products may be surpassed within a few years.