AMERICAN BOOK PUBLISHERS COUNCIL, INC.- Hon. ROBERT W. KASTEN MEIER, April 1, 1968. Acting Chairman for Copyright Law Revision, Subcommittee No. 3, Committee on the Judiciary, House of Representatives, Washington, D.C. DEAR MR. CHAIRMAN: The U.S. business and labor organizations concerned with printing and publishing met with a similar representative group of Canadian organizations in Toronto on February 16, 1968, to discuss three interrelated issues of mutual interest, namely, an exemption for Canada from the U.S. manufacturing clause, Canadian adherence to the Florence Agreement, and effective resistance to weakening of international copyright protection. As you will see from the attached copy of a memorandum signed on behalf of the U.S. and Canadian groups, we arrived unanimously at an agreement to recommend certain legislative and executive actions to our respective governments. The Canadian group has already taken the specific action which it undertook at Toronto. I enclose a copy of a letter dated March 19, 1968, from W. E. Curry, Chairman, Joint Committee of the Printing and Publishing Industries of Canada, to The Honorable Paul J. J. Martin, Secretary of State for External Affairs. In this letter, copies of which were also sent to other appropriate high-ranking Canadian Government officials, Mr. Curry urged (1) that Canada adhere to the Florence Agreement when exemption for Canada from the U.S. manufacturing clause becomes law, which would result in removing the present Canadian ad valorem duty of 10% on a large volume of U.S. book exports to Canada, and (2) that the Canadian Government oppose adherence to the Stockholm Protocol or similar actions weakening international copyright. All of us from the United States who attended the Toronto meeting, and all of the various organizations and interests we represent, feel strongly that it would be greatly to the advantage of the United States to achieve at the earliest possible date the objectives agreed upon at Toronto. I am therefore writing to you, on behalf of the U.S. group, to urge that Canada be exempted from the U.S. manufacturing clause. The sooner this can be accomplished in any appropriate bill dealing with copyrights, the sooner we will be able to obtain for the United States the completion of Canadian action called for by the Toronto Agreement. I am also authorized to state that the Authors' League of America shares the views expressed in this letter. An identical letter has been sent to The Honorable John L. McClellan, Chairman of the Subcommittee on Patents, Trademarks and Copyrights of the Senate Committee on the Judiciary. Sincerely yours, AGREEMENT OF TORONTO ROBERT W. FRASE. Representatives of the U.S. and Canadian business and labour organizations concerned with printing and publishing met in Toronto on February 16, 1968 to discuss three interrelated issues of mutual interest, namely, an exemption for Canada from the U.S. manufacturing clause, Canadian acceptance of the Florence Agreement, and effective resistance to weakening of international copyright protection. After a thorough discussion of all aspects of these interrelated issues, the following courses of action were unanimously agreed upon: (1) The Canadian group will promptly inform the Canadian Government of the Toronto meeting and of the agreement to take parallel action on both sides of the border to bring about exemption for Canada from the U.S. manufacturing clause and the acceptance by Canada of the Florence Agreement. The Canadian group will urge the Canadian Government to accept the Florence Agreement as soon as exemption for Canada has been adopted by the U.S. Congress. It is noted that the acceptance of the Florence Agreement can be accomplished in Canada without the necessity of an Act of Parliament. (2) The U.S. and the Canadian groups will co-operate closely in urging their respective governments to consult and work together to oppose the Stockholm Protocol or similar actions weakening international copyright protection which may be proposed under the Universal Copyright Convention. (3) The U.S. group will do its utmost to obtain incorporation of an exemption for Canada in the manufacturing section of the bill to revise the U.S. copyright law (S. 597) now being considered by a U.S. Senate Subcommittee. Specifically, the U.S. group will inform the Department of State of the Toronto meeting and will urge the Department (a) not to oppose an exemption for Canada from the U.S. manufacturing clause, and (b) to work closely with the Government of Canada in opposing weakening of international copyright protection under the Berne Convention or the Universal Copyright Convention. The U.S. group will also bring to the attention of the appropriate subcommittee of the Senate and House Judiciary Committees the recommendations of the Toronto meeting with respect to the manufacturing clause amendment. (4) It is anticipated that co-operative efforts on, and resolution of, the foregoing issues in a mutually satisfactory manner will lead promptly to definite future co-operation between the United States and Canadian groups on the removal of any remaining barriers to trade between the two countries affecting the printing and publishing industries. On behalf of the U.S. group: ROBERT W. FRASE, Director, Joint Washington Office, (And seven others). On behalf of the Canadian group: W. E. CURRY, Chairman, Joint Committee of the Printing and Publishing Industries of Canada, (And seven others). COPYRIGHT LAW REVISION HEARINGS BEFORE THE SUBCOMMITTEE ON PATENTS, TRADEMARKS, AND COPYRIGHTS NINETIETH Pursuant to S. Res. 37 on S. 597 Part 3-April 6, 11, and 12, 1967 [Excerpts from Statement of James H. French, Counsel, Book Manufacturers' Institute, Inc., pages 676-677] The cultural and educational interrelationship of the U.S. and Canada indeed reflects a unique situation which requires a special solution. And there is no need to retain the protection of the manufacturing clause as to Canada. In recommending that Canada be exempted from the provisions of the manufacturing clause, we quite naturally have examined this subject from the point of view of our own self-interest. We have concluded that book manufacturers in the United States will not suffer injurious consequences if this is done. Production techniques, quality, and distances to major market areas are all so similar that we foresee no disruption in the American book manufacturing industry as a result of Canadian exemption. Canadian wage rates and costs of equipment and production are comparable to our own and will provide the kind of competition that we can contend with. On balance, we feel that the exemption of Canada from the manufacturing clause will simply remove an irritant between Canada and the United States, will promote a healthy degree of cooperation between publishers and book manufacturers in both countries, and will help to promote an atmosphere in which friction occasioned by actions and recriminations by citizens of both countries can be significantly reduced. We wish to make it clear that we are not reintroducing the wage parity formula that the House Committee last year found raised "complex problems of foreign policy and administration.” We are recommending enactment of a direct, forthright exemption from the manufacturing clause for Canada. We do not believe that such an exemption will be found objectionable from any reasonable international trade viewpoint, or that it will in any way contravene the General Agreement on Tariffs and Trade (GATT). Under the Protocol of Provisional Application of the GATT, the United States agreed to apply Part II of the GATT to U.S. laws in existence on January 1, 1948, only to the extent that it is not inconsistent with such laws. The manufacturing clause of the United States Copyright Law has been in existence since 1891 and represents an integral part of United States Copyright policy. Thus, to the extent that anything in Part II of the GATT is inconsistent with the dynamic implementation of United States Copyright policy through the manufacturing clause, it must give way. This is the very raison d'etre of the Protocol of Provisional Application. Our conclusion that nothing in the GATT prevents the granting to Canada of an exemption from requirements of the United States Copyright Law derives additional support from the existence, in Article XX of the GATT, of a general exception for national measures relating to copyright. This exception clearly demonstrates the intentions of the member nations not to interfere with expressions of national policy manifested through Copyright Laws. The exception in Article XX is made subject to "the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade." No country other than Canada has the same conditions prevailing in its printing industry as does the United States. Therefore, exemption of Canada from the manufacturing clause of our Copyright Law would not constitute "a means of arbitrary or unjustifiable discrimination" under Article XX. Far from being "a disguised restriction on international trade," such exemption would tend to expand international trade between the United States and Canada without decreasing it between the United States and other countries. But most persuasive of all is the GATT's clear recognition, in Article XXIV, of (a) the need for special and preferential measures between adjacent countries in order to facilitate frontier traffic and (b) the desirabliity of increasing freedom of trade between such countries through closer integration of their economies. Under these circumstances, it is difficult indeed to see how any country could justify the lodging of a complaint under the GATT if the United States exempts Canada from long-standing requirements of the U.S. Copyright Law. If the fear should prevail that such a complaint may be effectively put forth, then we believe that the Administration should move promptly to obtain a waiver under Article XXV of the GATT. Such a waiver should be quite easy to obtain. Only a strained interpretation of this country's GATT obligations could support an argument against the exemption here requested. And in view of the clear unanimity on both sides of the border that such a result is desirable, it is difficult to see how an argument for such a strained interpretation can be defended. Nevertheless, we recognize that it is possible to argue that the Most FavoredNation requirements of Article I of the GATT and the non-discrimination requirements of Article XIII militate against the making of any special arrangements with any single country, even one having such a special interrelationship with the United States as does Canada. In our view, however, neither of these Articles applies. Article XIII, as its title states, requires the "Non-discriminatory Administration of Quantitative Restrictions." The entire context of this provision makes it quite clear that the provision's requirements are designed to apply to certain quantitative restrictions specifically authorized by another of the Agreement's provisions, Article XI, paragraph 2. The manufacturing clause of the Copyright Law is not a restriction authorized by Article XI, and, therefore, Article XIII does not apply to it. In any case, since Articles XI and XIII are in Part II of the GATT and are covered by the Protocol of Provisional Application, neither applies to the extent that it is inconsistent with the action proposed. Turning to Article I, the Most-Favored Nation clause of the GATT, we do not believe that this provision, properly interpreted, prevents the proposed exemption for Canadian printing. Article I provides in effect that with respect to four enumerated categories of matters, any advantage granted to the products of one country must simultaneously be extended to the like products of all countries. The first three enumerated categories, relating to (1) customs duties and charges, (2) the method of levying such duties and charges, and (3) rules and formalities in connection with importation and exportation, clearly are not applicable. (Now that the United States has implemented the Florence Agreement, there are not to our knowledge any duties or other charges on printed matter entering this country from abroad, certainly not on any commodities affected by the manufacturing clause.) These three categories are the only ones set forth in, and encompassed exclusively within, Article I itself. The fourth category is actually set forth in two paragraphs of Article III relating to "National Treatment on Internal Taxation and Regulation," and is only incorporated in Article I by reference. This category breaks down into two subcategories: (a) internal taxes or other internal charges (Article III, para. 2); and (b) laws, regulations and requirements affecting internal sale, offering for sale, purchase, transportation, distribution, or use (Article III, para. 4). Paragraph 2 of Article III clearly does not apply. On its face, paragraph 4 of Article III might appear to apply to the present proposal but for two significant facts. In the first place, the fact that national copyright laws are signed out and made the subject of a general exception in Article XX makes it clear that the Copyright Law is not the type of "law, regulation, or requirement" referred to in Article III, paragraph 4. But, more importantly, the Protocol of Provisional Application again comes into play to prevent anything in Article III from interfering with the evolution and revision of the long-standing United States Copyright Law. Although the Protocol does not purport to apply to Article I of the GATT, it does apply to all matters referred to in Article III. Thus, when Article I incorporates paragraphs 2 and 4 of Article III by reference, making the matters enumerated therein subject to the Most-Favored-Nation principle, it does so only subject to the Protocol of Provisional Application. Therefore, we see nothing in Article I or in any other provision of the GATT that would bar the type of action that we are proposing. Accordingly, we ask that a provision be added to S. 597, exempting books and other printed material manufactured in Canada from the scope of Section 601. If, for any reason, direct exemption for Canada in the present bill is impossible, we respectfully urge that, at the very least, the U. S. Department of State be requested to seek the most immediate means by which Canada may be exempted from the manufacturing clause without sacrificing the general maintenance of that clause. OPPOSITION TO DEMANDS FOR FREE USE OF COPYRIGHTED PRINTED MATERIAL Now, having just endorsed a special exception favoring Canadian printers, I am going to turn about and urge denial of the demands which have been, or may be, made by various groups of users of copyrighted printed matter for a blanket authorization to make free use of such matter. I have no difficulty making such a transition since I believe that the exemption sought for Canadian printers is just and warranted, whereas the requests for permission to make free use of copyrighted material are not. Hon. JOHN L. MCCLELLAN, DEPARTMENT OF STATE, Washington, September 19, 1967. Chairman, Subcommittee on Patents, Trademarks, and Copyrights, Committee on the Judiciary, U.S. Senate. DEAR MR. CHAIRMAN: Thank you for your letter of April 10 affording the Department an opportunity to express its views on a proposed amendment to section 601 of S. 597 which would except Canada from the provisions of the book manufacturing clause. The clause, as carried over from present law, would restrict imports into this country of books and other works by American authors not manufactured, i.e. printed and bound, in the United States by denying full copyright protection to such works. The Department is aware of the great imbalance in the flow of books between Canada and the United States, and it is our view that the manufacturing clause's limitation on the importation of printed words should ultimately be eliminated. This Department testified before Subcommittee No. 3 of the House Judiciary Committee on August 26, 1965 that it believes the perpetuation of the manufacturing clause is contrary to our liberal trade policy and our interest in improving the free flow of educational, scientific, and cultural materials internationally. However, the Department also stated that it would be necessary first to ascertain more definitely what the effect would be of completely eliminating this long-standing protection. In the meantime, granting of the proposed exception to Canada alone would result in a discrimination against books printed in other foreign countries in violation of the General Agreement on Tariffs and Trade (GATT) as well as many of our bilateral commercial treaties. In this regard we have studied with care the issues raised in Mr. French's submission accompanying the proposal to except Canada. As Mr. French notes, our present restriction on the importation of books avoids conflict with Article XI of the GATT only by virtue of the Protocol of Provisional Application, which provides that the laws existing on October 30, 1947 are not in violation of Part II of the GATT. While the proposed exception would be a liberalization in the sense that it would allow increased imports of books from Canada, it is clearly discriminatory in granting a concession to the Canadians not offered to our other trading partners. The Protocol has been interpreted to allow re-enactment of laws existing in October of 1947, and to allow the liberalization of such laws. However, the proposed modification of the law creating a discriminatory exception would create a conflict with the spirit of the mostfavored-nation requirement in Article I, and in all likelihood with the words of Article I calling for most-favored-nation treatment "with respect to all rules and formalities in connection with importation and exportation" (the Protocol does not except legislation inconsistent with Article I); and would also create a new conflict with the non-discrimination requirement in Article XIII, paragraph 1, providing that: "No prohibition or restriction shall be applied by any contracting party on the importation of any product of the territory of any other contracting party . . . unless the importation of the like product of all third countries is similarly prohibited or restricted." Mr. French suggests Article XIII applies only to prohibitions or restrictions authorized under Article XI. However Article XIV, paragraph 1, specifically excepts from Article XIII, under certain circumstances, restrictions authorized by Articles XII and XVIII, section B, thus indicating that Article XIII was meant to apply to prohibitions and restrictions generally. Consequently, this Department believes it applies also to ban new provisions that would introduce discriminatory prohibitions on imports even when these new provisions are modifications of restrictions which are themselves exempted from the GATT Article XI requirements by virtue of the aforementioned Protocol. Moreover, a discriminatory provision such as is proposed would be contrary to the requirements for most-favored-nation treatment contained in bilateral commercial treaties with many of our major trading partners (see e.g., our Friendship, Commerce and Navigation Treaties with Germany (TIAS 3593), paragraphs 1 and 3 of Article XIV, and Japan (TIAS 2863), paragraphs 1, 2, and 3 of Article XIV, both of which contain most-favored-nation provisions similar to Articles I and XIII of the GATT). Mr. French further contends that the book manufacturing clause is excepted from GATT requirements by Article XX, paragraph (d). This provision permits measures to secure compliance with laws and regulations for the protection of copyrights providing such laws and regulations "are not inconsistent with the provisions of this Agreement." The over-all heading of Article XX also requires that such measures do not "constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail." While Article XX(d) may permit new measures, for example, prohibiting importation of books or work that would infringe a copyright, it would not permit a new provision in a copyright law laying on a fresh discrimination among countries as to the importation of books into the United States. A further suggestion is that Article XXIV of the GATT, which provides for exceptions for customs unions, free trade areas, and frontier traffic, applies to a provision such as the proposed exception to the manufacturing clause. However, it does not appear that such an exception would fit into any of the above categories. Customs unions and free trade areas involve comprehensive tariff and trade arrangements providing for the removal of duties and other trade restrictions from most if not all of commodities in trade between two or more countries. An agreement covering only books could not properly be considered as establishing a free trade area. The exception for frontier traffic is also inapplicable since it was intended to apply to local traffic between neighboring areas close to the frontier. 57-786-76-pt. 3- -20 |