WTO Rules Against Canada in Magazine Flap

The World Trade Organization ruled in favor of the United States in a year-long dispute over the right to sell U.S. magazines in Canada. In a decision reached in Geneva, the WTO ruled that Canada must lift an 80% tax on U.S. magazines that contain advertisements directed at Canadians. Sports Illustrated, published by Times Warner Inc., had stopped publication of Sports Illustrated Canada because of the tax. It still sells the U.S. version of Sports Illustrated in Canada, with advertising aimed solely at U.S. readers. Canada had argued that its measures were necessary to advance Canadian culture. The U.S. initiated the investigation last March after Sports Illustrated pulled the Canadian edition of its magazine. At the time, the 80% tax was calculated to put Sports Illustrated Canada out of business, the U.S. contended. Canada argued that its measures were to protect the Canadian magazine publishing industry from U.S. competition. It was not immediately known if Canada would appeal the WTO ruling.