Cultural diversity

Publications and Studies

Trade in Cultural Goods and Services; Assessing the compatibility between trade rules and UNESCO's cultural diversity convention

Jane Kelsey, professeure de droit à l’Université d’Auckland, Nouvelle-Zélande, et membre du Comité de direction du RIDC, Genève, le 20 avril 2005 – 2005/04/20

A delegation from INCD put the case for an effective convention before key government and WTO officials in Geneva, April 20–22. At its seminar held as part of the WTO’s Symposium (See our Bulletin no. 13, May 9, 2005) and in a series of bilateral meetings, the INCD pointed out how the multilateral trading rules and the current negotiations under the General Agreement on Trade in Services (GATS) continue to restrict the right of governments to support their own artists and cultural producers and ensure diversity in the media. Jane Kelsey, INCD Steering Committee member and professor of law from the University of Auckland, gave a presentation entitled “Trade in Cultural Goods and Services: Assessing the compatibility between WTO trade rules and UNESCO's cultural diversity convention,” in which she outlined how the GATS has significant direct and indirect consequences for culture and media policies. In addition to the continuing challenges to audiovisual policies, current negotiations on telecommunications and computer services can represent a significant threat if they fail to take into account the cultural content that is an integral part of both.

With her authorization, below we have reproduced large excerpts of her presentation. Firstly, she maintains that “culture is more than the livelihoods of practitioners or the profits of cultural industries. It is a reflection of diverse civilizations and vehicle for the history, language, poetry, music, and stories that weave our identities and relationships, provide ways to reflect our uniqueness, and share the richness of diversity. All of these elements are to be both celebrated and contested—which is only possible in a milieu that nurtures the value of culture for its own sake.” In doing so, she explained, “the idea that trade agreements should constrain the legitimate policy choices of governments as they promote and defend genuine cultural diversity is ridiculous (…). We are not prepared to accept that cultural policies should be subordinated to securing market access for agriculture.” She notably referred to the form this threat takes, particularly in the trade of services, while emphasizing that her comments may also apply well to matters of investment and the government’s procurement rules. In this respect, she showed how culture is treated in agreements on the trade of services: “Service commitments are scattered across over a hundred technical product descriptions – CPC. There has been a tendency in the culture debate to focus on the most obvious classification of audiovisual services and its subheadings of production, distribution, exhibition, and broadcasting. Yet Recreational, Cultural, and Sporting Services apply to entertainment, news agency, libraries, museums, archives, sporting and recreational, and other cultural services. Professional services include architecture, urban planning, and landscape. Research and development has a subcategory for social sciences and humanities. Other business services include advertising, photography, printing and publishing, and translation. So what people experience as a unitary and integrated service, such as a novel, can be disaggregated across a range of subsectors that include writing, editing, printing, publishing, photography, translation, news agencies, advertising, finance, retail, distribution, and transport! When they are asked to make full commitments to national treatment and market access in these sectors governments are asked to guarantee unimpeded access and rights to operate for foreign firms in all those activities.”

Even this classification is not perfect, she explained, “Because it ignores the spectrum of financing, production, distribution, and exchange through which transnational corporations and investors dominate the cultural domain. Corporate strategies and policies in generic service sectors such as retail, franchising, distribution, information technology, real estate, consultancy, financial services, telecommunications, and e-commerce increasingly determine practices within the culture sector. Of most particular relevance here is e-commerce. Because virtually all cultural goods and services are now created, produced, distributed, exhibited, and preserved digitally.”

Ms. Kelsey also maintains that “it is therefore technically impossible to isolate cultural services within the GATS classifications. It is also very difficult to predict the future implications and applications of any commitments that are made.” To illustrate the growing importance of bilateral agreements as means of negotiation to broaden the rules of GATS, she referred to the emergence of digital technology: “Few governments anticipated this back in 1994 when they made their first GATS commitments—as the US itself has claimed in relation to Internet gambling! Governments who were concerned to protect their culture sector focused mainly on the CPC categories of audiovisual services. Digital technologies were covered at that stage by ‘other telecommunications services’ and the intellectual property rights agreement (TRIPS). In 1998 the agreement on e-commerce that was brokered by the U.S., as a precondition for President Clinton attending the second WTO ministerial meeting in Geneva, placed a moratorium on customs duties on e-commerce transactions. This was complicated for those wanting to maintain some national control over digitized cultural representations. But it was also far from optimal for U.S. corporations. U.S. demands for binding commitments in digital media have intensified, especially in bilateral negotiations where it can exert direct pressure and create cumulative precedents. In the Chile-U.S. free trade agreement signed off in 2003, the U.S. was prepared to accept the grandfathering of existing protections for cultural sectors (known as a ‘standstill’). But it demanded full guarantees of access, non-discrimination, and market-driven regulation for its companies in the rapidly expanding digital sphere. The e-commerce aspect of that agreement was drafted so broadly that all products traded or delivered digitally, including cultural services were covered. This is the first concrete evidence of a changing U.S. industry and government strategy. At an INCD sponsored conference in Washington this January, Bonnie Richardson of the Motion Picture Association of America stated that the industry and government are no longer seeking the removal of existing content quotas and broadcasting regulations. Rather, they are seeking to restrict these to their current scope. The primary battleground in culture is therefore shifting to telecommunications and electronic commerce debates.”

Pushing this illustration further, Ms. Kelsey pointed out that Australia’s cultural sector contested similar proposals made during negotiations for an Australia-U.S. free trade agreement signed in 2004: “While the US argued that digital is a different product from analog, the Australian government insisted that it was the same product supplied through a different mode of delivery. The Australian Coalition for Cultural Diversity objected, unsuccessfully, that even agreeing to a standstill would tie the hands of Australian governments in adopting any innovative new policies, including strategies to promote digital cultural industries, and effectively outsource the creation of Australian cultural policies to Hollywood. In the words of the U.S. Trade Representative, the final agreement ‘calls for each government to adopt state-of-the-art protection for digital products such as software, music, text, and videos, and encourages adoption of measures to promote trade through electronic commerce’.” According to Ms. Kelsey, the AUSFTA also imposed onerous standstill provisions on Australian governments—they could not increase existing local content quotas. If the quotas were cut they could not subsequently be restored to their earlier levels. Caps were applied to quotas in free-to-air radio and television. Provision was made to introduce expenditure-based quotas for pay TV of up to 10 percent for arts, children’s, documentary and educational programs, with the possibilities of increasing those for drama to 20 percent provided this was “non-discriminatory” and “no more burdensome than necessary.” Quotas could not be introduced for interactive audio or visual services unless the government proved that local content was not readily available. In addition, since all rules must be transparent and as unrestrictive as possible for trade, no exceptions were made for public radio, other than a general exclusion for awards and subsidies. The standard definition that is cited as protecting public services—“services supplied in the exercise of government authority”—would only apply where there were no commercial elements and no competitors in the market. Today, no public television or radio and very few libraries and museums could satisfy that test.

In conclusion, Ms. Kelsey maintains that despite these shortfalls, New Zealand looks with real envy to Australia with its public broadcasting and current affairs, SBS international news and programs, vibrant film making, drama, music, arts, and museums. She stressed that New Zealanders “know the risks of ideologically driven governments making service commitments that are designed to lock in neoliberal policy agendas that see culture as a dispensable tradable commodity. Many more governments have little understanding of the implications or, in the case of acceding countries, have to concede to unconscionable demands or remain outside the WTO, as Vanuatu has experienced. This year the GATS negotiations and the deluge of regional and bilateral arrangements have intensified the pressure on governments to sign away the right to make policies and laws that promote and protect genuine cultural diversity. It is essential to strengthen the ability and willingness of governments to say no—not just to audiovisual services but to the whole panoply of commitments that close their policy space and the sustainability of cultural diversity. I will pass over to my colleagues to discuss some of the ways in which that is being approached.” [05-23]