The United States and Canada edged closer to a trade war yesterday as Washington vowed to punish Canada if it protects its domestic magazine industry from American competition.
U.S. Trade Representative Charlene Barshefsky threatened to use trade sanctions if Canada passes a bill that would bar Canadian editions of foreign magazines from containing advertising directed at Canadians. Her options include raising tariffs on Canadian imports.
Mrs. Barshefsky said the bill violates international trade rules because it reserves Canadian advertising for Canadian magazines. Canada's heritage minister introduced the bill earlier this month in the Canadian Parliament.
"We expect the Canadian government to refrain from enacting this protectionist legislation," Mrs. Barshefsky said.
Canada defended its right to protect its culture.
"We are confident that this bill . . . is consistent with our rights and obligations under our international trade agreements," said Rodney Moore, spokesman at the Canadian Embassy in Washington. "If the United States decides to challenge this bill, we will defend it vigorously."
The legislation is part of a broader effort by Canada to protect its culture, including film and music. Talks on an international investment agreement have stalled in part because Canada and other countries have sought exemptions for culture.
Gregory Stanko, vice president of the Economic Strategy Institute, a Washington think tank, said France and other nations may erect trade barriers to protect their cultures if the United States does not challenge Canada. …