SEOUL, South Korea -- Cha Hyun-kyung has grown up watching Hollywood movies in which a U.S. hero takes revenge on the bad guys or Julia Roberts-style "pretty woman" falls in love with a handsome Caucasian guy.

She sometimes got tired of Hollywood blockbusters but had no alternatives because locally made South Korean movies were unpopular and their quality was low.

Local cinemas are required to fill 40 percent of their programs with homegrown movies, but filmmakers turned out low-cost productions to meet the quota, while enjoying their licenses to import foreign movies.

But not any more. Cha, a 35-year-old university lecturer in Seoul, is enjoying many homegrown films whose quality she says has sharply improved. "Recently made local films better reflect Korean culture and interest. I found fresh
interest in Korean movies," she said.

Cha is just one of a number of South Korean movie-goers who boosted the domestic market share of homegrown films to nearly 70 percent this year, up from 35.1 percent in 2000. In the first five months of this year, homegrown flicks took 68.3 percent of the domestic box office, according to a tally by the Korean Film Commission, a government agency for promoting local films. Market share of U.S. movies, which dominated South Korean cinemas until early 2000, has decreased to 30.1 percent during the period.

Two local films -- a Korean War blockbuster "Taegukgi" (the South Korean national flag), and "Silmido," a film based on the true story of the aborted commando mission to assassinate the North Korean leader -- attracted more than 10 million viewers respectively this year in a country with a population of 48 million.

South Korean films are increasingly popular across Asia and further afield in America or Western Europe and their stars have extended to out of the country. Acquired by Universal for Japan, "Taegukgi" grabbed a solid $1.6 million for the first two days on June 26-27 on 286 screens, ranking second in Japan's box office behind "Harry Potter and the Prisoner of Azkaban."

Despite criticism that the screen quota regulation goes against globalization and free market principles, actors and filmmakers expressed support for South Korea's screen quota system as a means of protecting local movies and promoting cultural diversity.

Some local films have and won critical acclaim and become favorites at international film festivals. Director Park Chan-wook won the Grand Prix at the Cannes film festival last month for his ultra-violent film "Old Boy." On the back of such fame, South Korea's film exports jumped to $37 million in the first half of this year, from $11.3 million last year and $7 million in 2000.

The explosive growth of the South Korean film industry is largely attributable to the so-called "screen quota" system, the decades-long legal shield for homegrown films against the flood of Hollywood movies.

The policy requires cinemas to screen domestically produced films 146 days a year, 40 percent of the time, a measure to protect and nurture South Korean films by providing an opportunity for local filmmakers.

Despite criticism that the screen quota regulation goes against globalization and free market principles, South Korea has maintained the protective policy, introduced in 1967. A group of French actors and filmmakers who traveled to Seoul last year expressed support for South Korea's screen quota system as a means of protecting local movies protection and promote cultural diversity.

But the screen quota system is now being challenged by American filmmakers, as South Korea wants to sign a bilateral investment treaty (BIT) with the United States this year to win more foreign direct investments. The protectionist film policy has been a major hurdle for that effort.

Culture and Tourism Minister Lee Chang-dong said earlier this month that he would scrap the quota system or ease the limits. "The time has come to examine a reduction, alteration and change in the current screen quota system," said Lee, the Venice award-winning best director in 2002. The chairman of the Korean Fair Trade Commission, Kang Chul-kyu also vowed to revise the quota system within this year, saying it is against free trade principles.

Their remarks came amid growing calls for the abolition of the restriction to pave the way for the conclusion of an investment treaty between South Korea and the United States. The treaty, which calls for nondiscriminatory treatment of investments in each other's country, is considered necessary to lure badly needed investment from abroad. Economists say it would bring some $4 billion in foreign investment.

The restrictive measure against imported films has long been standing in the way of the conclusion of the treaty for many years. Economic officials and the business leaders demand the screen quota system abolished for the much-needed investment treaty.

"The quota system prevents open and fair competition and hurts globalization characterized by deregulation in every sector of society. Now is the time for us to positively consider removing the protective formula in this era of globalization," said a senior official at the Federation of Korean Industries, the lobby for big businesses. "South Korea is a member of the OECD and has signed on to the WTO. The screen quota system violates the principles and commitments of tree trade," he told United Press International.

"The quota system prevents open and fair competition and hurts globalization characterized by deregulation in every sector of society."

Due partly to remaining restrictions, South Korea's process of globalization has slowed down, the Seoul-based Korea International Trade Association said, citing the latest annual globalization index published in the United States. U.S. filmmakers have also stepped up their outcry against the South Korean protective film policy. The Motion Picture Association of America has argued that South Korea should abolish or reduce the quota, saying the motion pictures industry is a business and the quota system is against the free trade principle.

In a response, South Korean filmmakers and actors have strongly protested, urging the government to preserve the screen quota. "The environment that Hollywood movies are threatening the world market has not changed, despite our growing market share," said actor Ahn Sung-ki, head of a pro-quota lobby group. "Scrapping the quota would deal a heavy blow to the local film industry," he told a group of journalists.

Shim Jae-myong, chairwoman of Myung Film, a movie producer, also said the screen quota played an important role in guaranteeing the quality of South Korean movies. "It has been only three to four years since homegrown films became competitive in the market. So it's premature to talk about removing the protective measure because the local film industry is just in its infancy," she said.

Business leaders from South Korea and the United States are scheduled to get together in Seoul on July 2 to discuss free trade and investment accords and the controversial screen quota regulation.

"I understand the importance of globalization and investment accords with the United States," movie-buff Cha Hyun-kyung said, "but I hope homegrown movies will be protected from U.S. film giants for two or three more years. I am concerned that unconditional pursuit of globalization may undermine the fragile South Korean file industry."




Contributed by Jong-Heon Lee, UPI Correspondent. The above piece is part 16 of a half-year series by United Press International which focuses each week on the human face of globalization in locales ranging from India to the heartland of the United States. The series looks at the complex array of social and economic issues facing workers, managers, students and others, who have been affected by the growing worldwide investment, trade and technological interconnections that have come to be known as globalization. Reprinted with permission from United Press International.

To read another Global Envision article about the faces of globalization, see Faces of Globalization: Organic Shrimp.