A U.S. industry group has called for South Korea to lower or remove the Asian country's "screen quota" system that mandates theaters fill part of their screening time with domestic films, in comments made to the United States Trade Representative (USTR).

The Coalition of Services Industries submitted the comments to the USTR last week to assist in the review and identification of "unfair trade practices and harm from non-reciprocal trade arrangements." The USTR is likely to examine the case for its calculation of "reciprocal" tariffs for Korea, set to be rolled out April 2.

"In 2006, prior to the KORUS FTA negotiations, the Korean government agreed to reduce its screen quota requiring exhibition of Korean films to 73 days per year," the coalition said in the comments viewed by Yonhap News Agency. KORUS FTA is short for the South Korea-U.S. free trade agreement.

"Over 16 years later, amidst rapid development of its cultural industries and the success of many Korean films and television productions internationally, now is the time for Korea to show leadership in the region, trust the choices of its consumers and further reduce or eliminate its screen quota," it added.

The comments came as South Korea's film and drama industry has gained international recognition, with director Bong Joon-ho's "Parasite" having won four Academy Awards, including Best Picture, in 2020, not to mention the runaway success of Netflix's Korean original series "Squid Game."

But the South Korean movie industry does not appear to have fully recovered from the COVID-19-era malaise, with a growing number of people opting to watch films at home through digital distribution service platforms rather than going to local theaters.

South Korea's screen quota system was initiated decades ago to protect local films from big-budget Hollywood flicks. The 73-day quota was fixed in 2006, down from the previous 146 days.

The coalition also took issue with Korea's small de minimis duty exemption for imports from the U.S.

"Korea only applies the US$200 de minimis mentioned above to imports from the U.S. and has not implemented it globally on a most-favored nation basis. This has undermined the main benefit of a higher de minimis level, namely a streamlined process for rapid border clearance of these goods," it said.

"Conversely, Korea's interpretation has added to the complicated web of regulatory restrictions that inhibit trade facilitation while requiring the dedication of more automated resources to distinguish shipment values for separate customs procedures according to origin."

The comments came as U.S. President Donald Trump's administration plans to impose country-by-country reciprocal tariffs that will be customized based on U.S. trading partners' tariff and non-tariff barriers, and other factors, such as exchange rates and unfair trade practices.

This file photo taken April 27, 2021, shows film posters at a movie theater in Seoul. (Yonhap)

By Song Sang-ho