WTO Rules on Canada Law on Magazines

The World Trade Organization ruled that legislation designed to shield Canada’s magazine industry from competition by lower-cost U.S. publications violates international trade rules. The ruling by a WTO panel overturned the federal government’s ban on split-run publications such as Time Warner Inc.’s Sports Illustrated, which in 1993 began publishing issues with U.S. editorial content and Canadian advertising. Under legislation passed in the 1960s, U.S. magazines sold in Canada are required to be printed in the country and 80% of their content must be judged Canadian by the government in order for advertisers to deduct their costs. In 1995, Ottawa stiffened the penalties by imposing an 80% tax on revenue of split-run magazines. Sports Illustrated stopped publishing a Canadian issue after the law was strengthened. Canadian officials are expected to appeal the ruling.