A group of business associations in the United States affirmed that if Mexico with impunity a 15% quota in movie theaters, it would violate the Treaty between Mexico, the United States and Canada (USMCA).

Among the associations, out of a total of 19, are:

• Coalition of Services Industries.
• Alliance for Trade Enforcement.
• Motion Picture Association (MPA).
• The Recording Industry Association of America (RIAA).
• United States Council for International Business (USCIB).

From his point of view, Senator Ricardo Monreal’s new film and audiovisual bill contains protectionist proposals that would impose a 15% local content quota in movie theaters; they would install a series of film restrictions designed to limit exports of US films and grant market-distorting preferences to local films.

In addition, they would also force a 15% local content share for over-the-top (OTT) or online platforms.

Movie theaters

“This bill, if implemented, would unfairly restrict US exports that support hundreds of thousands of jobs in the United States, in violation of USMCA provisions (such as Articles 14.4, 14.10, 15.3 and 19.4) that prohibit performance requirements and require that Mexico grant non-discriminatory treatment ”, argued the associations.

Instead, the associations concluded, Mexican lawmakers should encourage open markets, investments and collaborations, as industries in the United States and Mexico work together to overcome the Covid-19 pandemic.

With these arguments and with the inclusion of alleged violations in other sectors, the associations asked the US government to initiate consultations with Mexico on the USMCA.

The petition was addressed to Katherine Tai, head of the USTR, through a letter signed on March 24, 2021.

The changes

As part of the Monreal initiative, the law would establish that exhibitors will reserve 15% of the total exhibition time, for the projection of national cinematographic works in their respective cinemas, except as provided in international treaties in which Mexico does not have made screen time reservations.

In addition, all national cinematographic work will be released in movie theaters for a period of no less than seven consecutive days during primetime showing, within the six months following the date on which it is registered in the corresponding Public Registry, whenever it is available. in the terms established by the Regulation.

Other points of the initiative is that producers who participate, by themselves or through third parties in international film festivals, with one or more audiovisual works, and obtain awards or recognitions, will have support via risk capital, subsidies, economic stimuli and incentives that, within the legal framework, may be issued by the Federal Executive itself or through the Ministry of Culture.

Exhibitors who carry out any of the following activities may also obtain support via venture capital, subsidies, economic stimuli and incentives:

• Invest in the construction of new movie theaters or in the rehabilitation of premises that have ceased to operate as movie theaters or in the digitization and modernization of existing ones.
• Designate rooms for the majority exhibition of national cinema.
• Contribute to the diversification of the supply of foreign cinematographic material.