SI Canada Dispute Flares Anew

Article excerpt

When the Canadian Parliament last December passed into law an 80 percent excise tax on split-run editions from foreign publishers, the U.S. government was expected to live up to previous promises of retaliation. Now, that response has arrived.

U.S. Trade Representative Mickey Kantor announced in March that the government would challenge Canada's "discriminatory" policies at the World Trade Organization by seeking to overturn the measure directed against Sports Illustrated Canada--and to turn back 30 years of policy protecting Canadian publishers against their much larger neighbors to the south.

U.S. publishers, some of whom are considering Canadian advertising editions if regulations were to allow it, are following the dispute with great interest.

The battle first began with Time Inc.'s introduction of Sports Illustrated Canada nearly three years ago. Alarmed that such split-run editions (whose costs are all but covered in their domestic markets) would undercut Canadian publications, publishers north of the border beseeched their government to act. The result was an 80 percent excise tax on foreign publishers whose Canadian editions did not contain 80 percent original content.

This latest trade skirmish between the United States and Canada centers on differing views about the importance of cultural industries to each country's identity. …