Mexico's Video Pirates Can't Get You 'Hercules' - Just Yet

How soon can you get me 'Hercules?' "

I am standing at a video stall in Mexico City's labyrinthine Tepito Market, posing as a father desperate to get his kids one of the first pirated versions of the latest Disney blockbuster. The video vendor, surrounded by stacks of movie videos ranging from "Fargo" to "The Crucible," all selling for 20 pesos (about $2.50), seems to recognize my type.

"You're not the first papa to ask me that, but you have to realize this 'Hercules' is just now coming out in the cinemas," replies the affable vendor, the morning of the movie's Mexico City opening July 4. "Come back in a week, though, and I may have it," he adds. "In the meantime, can I interest you in 'Jungle Book II' - or maybe 'Dante's Peak?' "

Ten days later Hercules is still not available on Mexico City's flourishing pirate-video market - a sign of progress for the movie industry watchdogs and government officials determined to rein in modern-day, high-tech pirates. Their illegal activity costs the US movie industry nearly $70 million annually in Mexico alone and well over $2 billion worldwide.

Last year, Disney's "Hunchback of Notre Dame" was available in Tepito video stalls before its debut in the city's cinemas.

Antipiracy forces will take any good news they can get as they fight against the knockoff movies, musical recordings, books, video games, and software packages that cost United States industries an estimated $15 billion a year. All of these pirated products are in abundant supply in Tepito and elsewhere around Mexico.

While some progress against the piracy of "intellectual property" is being made worldwide, industry officials say too many countries still lack the laws, enforcement, and means to prosecute needed to give teeth to the message that pirating doesn't pay.

The Clinton administration sent a "modest positive" report on the North American Free Trade Agreement (NAFTA) to Congress last Friday. But antipirating forces say NAFTA has failed to fulfill its promise as an antipiracy tool. The main reason, they say, is Mexico's failure to adopt and enforce NAFTA-mandated regulations for combating piracy.

"We've laid out pretty clearly that Mexico has fallen short in meeting the legislative demands and particularly in enforcement issues," says Maria Strong, vice-president of the International Intellectual Property Alliance (IIPA) in Washington. "It's the old story we see in a lot of countries," she adds. "They've toughened some laws and added some new ones, but they're lacking the resources needed for serious enforcement."

Moviemaking and software writing and production have become important to US economic well-being. Industry leaders are pushing the government to pay closer attention to patent and copyright infringements. The US made intellectual property a central issue in negotiations that created both NAFTA and the World Trade Organization.

But merely signing agreements hasn't been enough.

In February, the IIPA issued to US trade authorities a detailed report outlining how Mexico continues to allow practices that violate NAFTA. The IIPA had presented in March 1996 a "10-point emergency-action plan" to the Mexican government suggesting how piracy might best be fought. "But almost one year later," the IIPA, an alliance of US motion picture, recording, publishing, and software industries, said in its report, "We have yet to see implementation of, or indeed any Mexican government response to, most of the key suggestions in that plan."

In Tepito, an area north of Mexico City's historic center known for street after street of stalls selling everything from fake Nikes and Levi's to contraband TVs and stereos, piracy is seen as a victimless crime.

"Once in a while the police haul us in for tax evasion or something, but they just seize our merchandise and then let us go," says another video vendor, who also apologizes profusely for not yet having "Hercules." "But they never close us down.... The government can't afford to put this many people out of work."

Industry officials counter that piracy actually inhibits the kind of economic development that countries like Mexico - or the US for that matter - need most. By copying someone else's product and selling it at a rock-bottom price, piracy undercuts the producing industries that create good-paying jobs, they say.

In a May report on the contribution of the packaged-software industry to the Latin American economy, the Washington-based Business Software Alliance (BSA) reported that tens of thousands of jobs and hundreds of millions of dollars in tax revenues could be added to Latin economies if software piracy were reduced by only 15 percent by 2000.

Noting that more than half - some surveys indicate more than two-thirds - of all copies of software currently in use in Latin America were illegally made, the BSA said the legitimate software industry still accounted for nearly 115,000 jobs and more than $1 billion in tax revenues across Latin America in 1996. Those numbers are projected to rise to 219,000 jobs and nearly $4 billion in tax revenues by 2000.