Cultural diversity

Newsletter
The Diversity of Cultural Expressions

Vol. 5, no 37, Monday, December 19, 2005

Convention on the Protection and Promotion of the Diversity of Cultural Expressions

UNESCO Convention approval ceremony by the Québec government at the Hôtel du Parlement -
November 10, 2005

Intervention de M. Jean Charest, premier ministre du Québec
Speech by Québec prime minister Jean Charest

UNESCO Convention ratification ceremony by Canada -
November 23, 2005


Photo : Paul Ducharme

IN THIS ISSUE :

Press Releases, Speeches, and Declarations

Agenda



Press Releases, Speeches, and Declarations

With the adoption of the UNESCO Convention, the INCD and culture ministers in the INCP are moving into a new phase: “We must work for the implementation of the Convention and to find concrete ways to make it effective as a political and development tool”

International Network for Cultural Diversity (INCD), November 21, 2005 – 2005/11/21

With the adoption of the UNESCO Convention on the Protection and the Promotion of the Diversity of Cultural Expressions, the INCD and culture ministers in the INCP are moving into a new phase: “We must work for the implementation of the Convention and to find concrete ways to make it effective as a political and development tool. It is especially significant that we are embarking on this next phase of our work in Africa, the birthplace of humanity, and in Senegal, with its rich diversity of arts and culture that, unfortunately, must struggle to overcome the obstacles created by the rules of commercial dissemination in order to reach audiences on every continent. This is the challenge facing all the world’s cultures, and the INCD will do all it can to help them. We must put conditions and rules in place to allow rich, varied, and balanced cultural exchanges.”

These are the words set out in the Declaration adopted at the end of the 6th Annual Meeting of the International Network for Cultural Diversity that brought together 138 delegates from 45 countries, from November 17 to 20 in Dakar, Senegal. The Conference was held in partnership with the Senegalese Network of Socio-Cultural Actors and the National Coalition for Cultural Diversity (Senegal).

As INCD noted, in three days of dynamic dialogue the INCD delegates focused on four key issues: the immediate ratification of the Convention by 70–85 UNESCO member states; resisting demands in the WTO and regional and bilateral trade and investment agreements to make commitments that undermine the objectives and principles of the Convention and that would render it meaningless; identifying policy initiatives and projects that give life to the commitments in the Convention, particularly to create preferential opportunities for artists and cultural productions from the South and to provide the necessary resources to develop cultural capacity and creative industries; and enhancing cooperation among states committed to the Convention, especially in forums where its objectives and principles are under threat, and between those states and civil society at national, regional, and international levels.

INCD delegates celebrated along with culture ministers the adoption of the UNESCO Convention, which they feel is a significant victory. INCD believes that the challenges of achieving ratification should not be underestimated: “Our delegates leave Dakar with a commitment to work at the national and regional levels to help our governments to understand why ratifying the Convention is so crucial.” But, ratification alone is not enough: “We will also be insisting that UNESCO assume the key role it is assigned under the terms, and we urge culture Ministers to do the same. It must collect and disseminate the critical information, so that we can all understand the state of development of the creative industries in each country and the current balance of trade in cultural goods and services.”

In addition, INCD stresses that ratification of the Convention will not ease the pressure on governments to make commitments in trade and investment agreements that are incompatible with its vision of genuine cultural diversity and culture-driven development. In fact, like the International Liaison Committee of Coalitions for Cultural Diversity (See our Bulletin No. 35, November 25 ), INCD underlines that as governments face pressure to make new commitments at the WTO and in regional and bilateral agreements, INCD delegates are urging Culture Ministers to work with trade ministers to ensure they understand the wide scope of cultural policy tools that are at risk. This extends beyond the audiovisual, publishing, and music industries to include telecommunications, electronic commerce, retail and distribution services, the media, and many other sectors. Commitments in any of these could potentially paralyze the ability of governments to protect and promote their own artists and cultural producers. In this respect, given current developments in the WTO and in bilateral and regional negotiations, delegates to the INCD meeting concluded that we must be more vigilant than ever, and urged states to continue working with each other and with civil society to quarantine cultural goods and services from the trade and investment agreements. Recent moves by the governments of Kenya, Brazil, Venezuela, and others to resist demands in the WTO from the European Union to establish minimum benchmarks in the General Agreement on Trade in Services are an important example of the potential for such solidarity. Moreover, INCD members at the meeting also signed an urgent appeal to the President of the Republic of Peru to resist pressure from the United States to conclude a US/Andean free trade agreement without a comprehensive cultural exception.

In conclusion, INCD affirms that it will work with INCP to ensure the speedy ratification of the Convention, to promote opportunities for cultural actors, and to challenge developments and negotiations that threaten the integrity of local cultures and genuine cultural diversity in the national and international spheres.

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UNESCO Convention on the Diversity of Cultural Expressions - The fight continues: “We must work extremely hard to sustain momentum for ratification”

Line Beauchamp, ministre de la Culture et des Communications du Québec, Lyon, le 7 décembre 2005 – 2005/12/07

At the end of the symposium entitled The Fight for Cultural Diversity, which was held this year from December 2 to 7 in Lyons as part of the 18th Entretiens du Centre Jacques Cartier, Québec minister of culture and communications Line Beauchamp released a study on prospects for action related to the UNESCO Convention implementation. The Bernier/Ruiz-Fabri study “lays out the winning conditions for the implementation” of the Convention which, now that Canada has signed on, must still be ratified by 29 countries. Minister Beauchamp admitted that there is still an enormous amount of work to be done, and insisted on the need to “work extremely hard to sustain momentum for ratification.”

In this respect, it is worth noting that, since the adoption of the Convention by UNESCO, cultural diversity advocates have focused their efforts on getting as many countries as possible to ratify the agreement in order to give it as much weight as possible. However, in the opinion of the study’s author, Professor Ivan Bernier, support for the Convention could fade if the implementation stage is not prepared now: “If we can’t convince developing countries of the seriousness of the Convention, support will rapidly erode,” he said. The study’s co-author, Hélène Ruiz-Fabri, adds that “There’s a risk that delays will multiply, undermining the implementation process and support.” The study’s authors note that it would be “extremely disappointing” if, after being adopted and ratified, the Convention “were to fail at the implementation phase.” They believe that “The best way to avoid this scenario is to start preparing the implementation stage now, as if the Convention were about to come into effect (…). We mustn’t wait three or four years. If we can put forth concrete proposals even before it is ratified, it would lend more weight to ratification. It could even speed up the process by creating a sense of impending success. This would also provide reassurance to those who are hesitant.”

The Convention contains a series of commitments to help developing countries adopt cultural policies, including preferential treatment for their artists and provisions for an International Fund for Cultural Diversity. For this reason, Canadian Coalition for Cultural Diversity co-chair Pierre Curzi stressed that “We must start broadening the debate and transfering knowledge to developing countries right now, otherwise we will extinguish the flame of hope that we have lit. And it is clear that if there is no financial effort from the rich countries, the Convention will be a lame-duck.” Minister Beauchamp agreed that it is an “extremely important challenge” that must not be “exclusively tied to the creation of the fund” and “limited to subsidies.” “We must help developing countries develop cultural funding mechanisms,” she declared.

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23è Sommet Afrique-France: “We must speed up the ratification process for the Convention on the Diversity of Cultural Expressions”

Final communiqué, Bamako, Mali, le 6 décembre 2005 – 2005/12/06

Together with France, 51 African states attended the 23rd Conference of African and French Heads of State and Government on December 3 and 4 in Bamako, Mali. Twenty-five were represented by their heads of state. Other attendees included representatives from the UN, the African Union, the European Union, and other regional and international organizations. The Conference applauded the adoption of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions on October 20, at the 33rd UNESCO General Conference in Paris, which aims to promote national cultures. It also called on attending states to speed up the ratification process. The Conference recognized the leading role played by young people in promoting the image of Africa and fighting for the recognition of cultural diversity, which encourages greater understanding between peoples and promotes solidarity in development and lasting peace.

The Conference also expressed its hopes that the WTO Ministerial Meeting in Hong Kong from December 13 to 18 would take into consideration Africa’s development priorities in its trade negotiations.

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Agenda

Trade and culture's File: The 6th WTO Ministerial Conference in Hong Kong, China – December 13-18, 2005

Challenge, opportunity, or threat to cultural diversity?

The World Trade Organization’s 6th Ministerial Conference opened on December 13 in Hong Kong, kicking off six days of talks as 149 member countries worked to promote freer world trade. In Washington and other Western capitals, there was talk of the pressing need to ensure the world’s poorest countries benefit from globalization and pull themselves out of their extreme poverty, and of using progress to counter the resentment felt by people in countries at the bottom of the world’s economic ladder. As a result, this new series of talks aimed at encouraging freer trade and reducing the gap between globalization’s “winners” and “losers” was dubbed “the Development Round.”

In its recent newsletter (Vol. 6, No, 8, November 2005), INCD presents a study on the ongoing negotiations on the General Agreement on Trade in Services by Professor Jane Kelsey from the Law School at the University of Auckland, New Zealand. In this study, she affirms that “While the attention of the culture sector is focused on developments at UNESCO, the assault on genuine cultural diversity and the right of governments to support the local culture sector has gathered momentum at the World Trade Organization.” According to Ms. Kelsey, the ongoing negotiations on the General Agreement on Trade in Services (GATS) aim to extend the right of foreign firms to run a country’s services, ranging from health, education, and pensions to railways, postal services, and broadcasting, and prevent their governments from giving preference to local providers of such services. She stresses that now the European Commission is insisting that any concessions on agriculture (cosmetic or otherwise) depend on more commercial opportunities under the GATS for their corporations in water, banking, telecommunications, shipping, retail, and other sectors. A number of governments, including the U.S., the EC, Japan, Australia, Switzerland, South Korea, Taiwan, and New Zealand have been pushing a scheme that would require all countries, rich and poor, to lock open a minimum number of their services to foreign firms. Some proposals suggest groups of like-minded (richer) countries should reach more far-reaching deals on priority sectors, which others (mainly developing and least developed countries) are “invited” to join. In practice, these invitations are likely to be backed by direct or indirect threats of loss of trade or aid for those who don’t accept.

For Ms. Kelsey, one such area is audio-visual services. Pressure is being applied from the so-called “friends of audio-visual services” led by the U.S. and including Hong Kong China, Taiwan, Chile, Japan, and Mexico, at the same time as some governments continue their attempts to dilute the UNESCO Convention even further. But the threat to culture is not only in the audio-visual sector, but also from similar demands that involve telecommunications, advertising, retail, publishing, theme parks, events management, and more. Ms Kelsey points out that for years, proponents of the GATS have insisted that the rules allow countries to decide for themselves which, if any, services they lock open to foreign firms under the ‘free trade’ rules of the GATS, insisting that sovereign governments retain the right to regulate and protect their cultural services. The development needs of poorer countries would continue to be recognized, allowing them to make fewer commitments than their richer counterparts and helping them participate in the global services economy. Today, that thin veil has been stripped away. The GATS negotiations are an arena driven by the self-interest of more powerful countries, on behalf of their service transnationals and/or as a trade-off for their agribusinesses. Ms. Kelsey concludes that this pressure will continue with or without the UNESCO Convention. For this reason, it is essential that people be vigilant about what is happening in the current talks in Geneva and what their governments are being pressured to sign up to before, at, and after the Hong Kong Ministerial Conference

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What’s at stake at the Hong Kong Ministerial Conference

Created on January 1, 1995, with a view to promoting freer trade and regulating trade between states, the World Trade Organization (WTO) has contributed to the spectacular upsurge in world trade. The WTO which, with the addition of Saudi Arabia on December 11 (http://www.wto.int/french/news_f/news_f.htm), now boasts 149 member states, inherited the arduous task of establishing guidelines for trade, a process begun in 1948 with the General Agreement on Tariffs and Trade (GATT) to avoid the protectionist excesses of the past. During the last round of multilateral negotiations—the Uruguay Round (1986–1994)—which culminated in the creation of the WTO, the Organization’s mandate was broadened to encompass trade in services and intellectual property. For the first time, agriculture was included in trade talks. And a tribunal with the power to sanction—the Dispute Settlement Body (DSB)—was set up to resolve trade conflicts. This binding mechanism, which gives the WTO the power to slap heavy economic sanctions on countries that fail to meet their trade obligations, has given the trade body an enviable record for efficacy in the world of intergovernmental organizations, as it is the only international institution with a sanctioning mechanism to hold states to their commitments. However, while the DRB boasts a good technical record, its political record has raised more and more questions, notably because there is no equivalent to this “trade law” in environmental, societal, or cultural justice.

The 6th WTO Ministerial Conference opening in Hong Kong was convened in hopes of advancing negotiations launched at the fourth Ministerial Conference, held in Doha, Qatar, in November 2001. The purpose of these negotiations is to newly revamp trade rules by more quickly integrating LDCs into the multilateral trade system, improving trade rules, broadening market access, improving coordination of technical assistance and capacity-building in the area of trade, and reducing obstacles to trade. This multilateral trade negotiation process is commonly known as the Doha Round. In this respect, the Doha Declaration (http://www.wto.int/english/tratop_e/dda_e/dda_e.htm#dohadeclaration) sets out the mandate for negotiation on various themes and provides for other work, particularly on issues related to implementing current agreements. This round notably includes negotiations on agriculture and services, which began in early 2000. To bring the round to a close in December 2006, the Ministerial Conference in Hong Kong is expected to lead to an agreement that spells out specifics for key bargaining points: reduction targets for customs duties on agricultural products and industrial goods and for cuts in domestic support for agriculture; the end date for export subsidies; and a list of services to make more open to trade.

Meetings between ministers of the leading trade powers (notably the U.S., the European Union, Brazil, and India) have been multiplying, but have failed to generate the progress necessary in the lead-up to Hong Kong. And differences of opinion, particularly with regard to agriculture, are too great to hope for a comprehensive agreement. Agriculture—and the torturous debate on subsidies, customs duties, and export assistance that goes with it—is, once again, the main obstacle: “Poorer nations want to increase their agricultural exports, and they want richer countries to lower their tariffs on agricultural products and cut out their farming subsidies. Developed countries (DCs), on the other hand, are more interested in further opening up markets to their manufactured products.”

The second issue concerns industrial products and services. In DCs, markets for manufactured goods can grow no further, and European and U.S. industries see exports as their hope for growth. But emerging countries fear that their young industries will be unable to withstand the competition. As for services, the E.U. and U.S. are also both in favor of better access to the markets of emerging countries. India also has an interest in opening up its service sector in exchange for visas for its qualified labor force. Lastly, the ACP countries and the G90 hope to maintain customs barriers to protect their economies and regulations that specifically address their situations. In general, in exchange for concessions in agriculture, developed countries are calling for an overall reduction in customs duties on industrial products, using a formula that would require all countries to lower their duties under a certain limit. They are also asking LDCs to further open their services to foreign competition.

The third issue is that of development. Failing a comprehensive agreement on new trade rules and some semblance of consensus on the on the two issues above, the Hong Kong conference will likely fall back on a “development package,” put together by the European Union. With this package, Brussels proposes extending the “Everything but Arms” agreement it signed with the least developed countries (LDCs) to other WTO members, requiring DCs and emerging countries to offer duty and quota-free access to LDC products. But, “if that is the only lifeline available in Hong Kong and member states don't grab on, this Conference will definitely be a “failure.”

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Trade liberalization: The challenges of the Hong Kong ministerial

The watchword for WTO countries is “Avoid another Cancun.” The last ministerial conference, held in late 2003 in Cancun, Mexico, ended in failure. LDCs, including India, refused to negotiate on subjects like competition, streamlining bureaucracy, and the transparency of public markets in the absence of agricultural concessions from the rich countries. In a speech on December 12, Director-General Pascal Lamy, said that members should strengthen, develop, and push ahead with the draft declaration,” emphasizing that there was “no time to lose.” He had earlier warned that “failure at the negotiations would be a betrayal of poor countries. We would be missing a historical opportunity to eliminate agricultural export subsidies used to sell agricultural products (from developed countries) at dumping prices on developing country markets.”

According to experts, failure at the Doha round—which is at stake at the WTO Ministerial Conference in Hong Kong—would penalize LDCs, who are calling for an end to the injustices in the global trade of agricultural products. In this respect, Mr. Lamy notably pointed out that “In Doha, we promised developing countries we would correct the distortions in the world trade system to their advantage. If this round fails, developing countries will lose all hope for new markets and greater fairness (…). We need this (Doha) round to promote economic development and reduce poverty.”

After Seattle in 1999 and Cancun in 2003, another WTO failure could sound an end to multilateral negotiations, and give new impetus to protectionist forces in all countries, like in the U.S. Congress, where proposals to withdraw from the WTO are presented regularly. As European Trade Commissioner Mr. Peter Mandelson told the German economic daily Handelsblatt in an interview on November 10, “The development of protectionism would be inevitable.” According to Françoise Crouïgneau from the daily Les Échos, “A failure in Hong Kong could challenge a multilateral dynamic already struggling under the proliferation of bilateral agreements and weaken the WTO's credibility slightly more. By crying “sink the WTO,” alterglobalists should realize they're shooting themselves in the foot. The institution they want to see disappear is certainly in need of reform. But it remains the only institution that can set the rules of the game, for the strong and the weak alike. And make them binding.”

Mr. Jean-Pierre Lehmann of Evian Group, a liberal think tank, fears two possible scenarios: “One would be a world intertwined in a web of complex preferential trade agreements” concluded between states and regions outside the framework of the WTO. This type of scenario usually puts poor countries at a disadvantage, since they have less bilateral bargaining power with rich countries. The other scenario is “a return to anarchy, the dismantlement of international trade laws, and the trade wars of the 1930s,” with dire geopolitical consequences.

Likewise, in a recent work on the institution (L'économie mondiale 2005, Paris, La Découverte, Repères, No. 393), Michel Rainelli observed “a general challenging of the WTO, both internally—by developing nations that consider globalization is to their detriment—but also externally, by NGOs that criticize the very principles of its operation” and also criticizes the organization for opening markets to the disadvantage of small players in international trade. Agreements signed under the WTO do not always have a good reputation. To defend themselves against the negotiation stalemate in the past years, an increasing number of countries have decided to sign bilateral or regional agreements. This type of treaty primarily benefits influential economies that can impose their own conditions. In addition, the number of WTO member states continues to rise, increasing the diversity of national economies and making consensual decisions a challenge. Emerging countries, who understand the benefits they can derive from multilateralism, would undoubtedly be the first to be affected.

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WTO alliances and groups in Hong Kong

In general, to better protect their interests in negotiations, WTO members build relatively homogeneous alliances that enable them to defend their common positions, but also facilitate negotiations among the 149 members. These rather informal alliances are proliferating, and some countries belong to a number of groups. The growing sway that emerging countries like Brazil, India, or China have in international trade is reflected in WTO negotiations. The U.S., the E.U., Canada, and Japan used to have the upper hand, and opposition was often simply North-South. When Brazil created the G20 (a group of emerging countries) before the Cancun conference in 2003, everything changed. There are now a number of players:

  • The G10 (9 members: Iceland, Israel, Japan, Liechtenstein, Mauritius, Norway, Switzerland, South Korea, Taiwan). This group brings together net agricultural importers that impose very high customs duties on certain products they consider vital to their agricultural industries, such as Japan (over 500% on rice imports). They reject any notion of a ceiling on their customs duties.

  • The Cairns Group (17 members:, Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Paraguay, Philippines, South Africa, Thailand, Uruguay). This group brings together large agricultural exporters, both developed and developing, who are adamantly opposed to E.U. and U.S. subsidies.

    • The G20 (21 members: Argentina, Bolivia, Brazil, Chile, China, Cuba, Egypt, Guatemala, India, Indonesia, Mexico, Nigeria, Pakistan, Paraguay, Philippines, South Africa, Thailand, Tanzania, Uruguay, Venezuela, Zimbabwe). This group brings together emerging countries, under the leadership of Brazil and India. They share opposition to the agricultural policies of rich countries, but are more divided on the matter of industrial products. Some exporters are in favor of free trade, like Brazil, while others are more protectionist, like India.

    • The G33 (42 members: Antigua and Barbuda, Barbados, Belize, Benin, Botswana, China, Congo, Cuba, Dominican Republic, Grenada, Guyana, Haiti, Honduras, India, Indonesia, Ivory Coast, Jamaica, Kenya, Madagascar, Mauritius, Mongolia, Mozambique, Nicaragua, Nigeria, Pakistan, Panama, Peru, Philippines, St. Kitts and Nevis, St. Lucia, St. Vincent and Grenadines, Senegal, South Korea, Sri Lanka, Surinam, Tanzania, Trinidad and Tobago, Turkey, Uganda, Venezuela, Zambia, Zimbabwe). This group brings together LDCs defending the concept of “special products” important to their agricultural industries that they want to be able to continue to safeguard with the highest level of protection.

    • The ACP Group: Africa–Caribbean–Pacific (56 WTO members: Angola, Antigua and Barbuda, Barbados, Belize, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Congo, Cuba, Congo DR, Djibouti, Dominica, Dominican Republic, Fiji, Gabon, Gambia, Ghana, Grenada, Guinea, Guinea-Bissau, Guyana, Haiti, Ivory Coast, Jamaica, Kenya, Lesotho, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Papua New Guinea, Rwanda, St. Kitts and Nevis, St. Lucia, St. Vincent and Grenadines, Senegal, Sierra Leone, Solomon Islands, South Africa, Surinam, Swaziland, Tanzania, Togo, Trinidad and Tobago, Uganda, Zambia, Zimbabwe). This group brings together former colonies that want to preserve their preferential access to the European market, thereby opposing some of the G20's positions.

    • The G90: A more informal body, bringing together the ACPs, along with the countries of the African Union and LDCs.

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How does the GATS operate?

Services trade encompasses a disparate array of economic activity, and brings together a similarly wide scope of issues, institutions, and interests. The conclusion of the GATS (General Agreement on Trade in Services), bringing services trade into the multilateral framework of trading rules, was one of the most significant achievements of the Uruguay Round. The GATS offers for services trade the same stability that arises from mutually agreed-upon rules and binding market access and non-discriminatory commitments that the GATT has provided for goods trade over the last five and a half decades. However, liberalization of services trade is quite different from trade in goods, given the characteristics of services and the highly developed regulatory frameworks in place in many service industries.

A framework agreement that features several of the fundamental principles of the GATT—national treatment, most-favored nation treatment (MFN), transparency in domestic regulation, fair application of laws—the GATS covers in principle international trade in all services except those supplied in the exercise of governmental authority and, in the air transport sector, traffic rights and all services directly related to the exercise of such rights. The GATS consists of three major components: a framework that lays out the general obligations for services trade, in much the same way as the GATT does for trade in goods; a number of annexes on specific sectors; as well as the schedules of commitments submitted by WTO members.

The WTO list counts 12 sectors and 163 sub-sectors. Due to its structure and its voluntary, “bottom-up” approach to liberalization, the GATS allows WTO members to select the sectors, supply modes (i.e., crossborder trade, movement of consumers, commercial presence, and movement of suppliers), and regulatory conditions in which liberalization commitments are made. Or, indeed, to make no commitments at all by leaving entire sectors out of their schedules. The GATS enables member countries to progressively open service sectors and integrate into the multilateral trading system at their own pace and in accordance with their national priorities and objectives. It establishes a series of means through which countries can limit, qualify, or even suspend the commitments they make.

The GATS offers the following options to a WTO member that wishes either to exclude a service sector from its GATS commitments, restrict their extent, justify a breach of those commitments, or opt out of the multilateral trading system altogether:

  • It can simply decline to make any commitments. Nothing in the GATS compels member countries to bind or liberalize any specific sector, and a country may choose to keep a sector outside the scope of its commitments indefinitely. In this respect, the sectoral coverage of liberalization commitments under the GATS is much less complete than that of goods under the GATT. While the majority of WTO members have bound most or all of their goods tariffs, many have thus far left a large number of their service sectors “unbound.”

  • A country is free to qualify its commitments in any given sector or subsector. For each of the four service supply modes covered by the GATS, a WTO member can either specify that it is “unbound” (i.e., the country has made no commitments in that sector for that supply mode) or make a more specific reservation. A WTO member can also bind less than the regulatory status quo or commit to future liberalization, allowing incumbent suppliers to prepare for new market conditions and for necessary regulatory regimes to be established.

  • A country can apply horizontal limitations to all services. “Horizontal” limitations are applicable to all sectors.

  • A country can invoke GATS Article XII (Restrictions to Safeguard the Balance of Payments) provisions to suspend a commitment in the event that it is found to adversely affect its balance of payments.

  • A country can invoke the various general exceptions in GATS Article XIV (General Exceptions) to justify existing regulations or to enact new ones, in pursuit of legitimate public policy concerns.

  • A country may ultimately withdraw from the GATS and the WTO altogether, though it should be noted in this regard that no WTO members have done so to date and that countries have been queuing to join—rather than leave—the Organization.

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The GATS and the services trade negotiations

The General Agreement on Trade in Services provides a "built-in agenda" requiring members to enter into successive rounds of negotiations aimed at progressive liberalisation, the first of which was mandated to start in 2000. In March 2001, Members adopted the modalities for services trade negotiations, referred to as the "Negotiating – Guidelines and Procedures, which stipulate the request-and-offer approach as the main method of negotiating new "specific commitments" on market access, national treatment and additional commitments. The Guidelines also mandate Members to continue negotiations on the ‘outstanding issues’, i.e. the establishment of an emergency safeguard mechanism (ESM) for services, possible disciplines on domestic regulation, and disciplines on government procurement and subsidies.

The Doha Ministerial Declaration subsequently referred to these Guidelines as "the basis for continuing the negotiations” with a view to achieving the objectives of the GATS. Among the relevant objectives for this mandate are the establishment of a framework of principles and rules for trade in services, the achievement of progressively higher levels of liberalisation and the facilitation of increased developing country participation in trade in services and the expansion of their service exports. With regard to pursue progressively higher levels of liberalisation of trade in services, negotiations shall be directed to the reduction or elimination of measures that impede effective market access (such as conditions for the establishment of commercial presence, restrictions on the entry of foreign workers) and discriminate against foreign service suppliers (such as prohibition against the ownership of land by foreigners) and thus generally make it more difficult for foreign services providers to do business.

The GATS recognises that the process of liberalisation must take place with du respect for national policy objectives and the level of development of individual Members, both overall and in individual sectors. Thus, it states that there shall be appropriate flexibility for individual developing country Members for opening fewer sectors, liberalising fewer types of transactions, progressively extending market access in line with their development situation and, when making access to their markets available to foreign service suppliers, attaching to such access conditions as will allow them to strengthen their domestic services capacity and its efficiency and competitiveness to withstand the consequences of entry of foreign service suppliers.

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Developments on the services trade negotiations since Cancun

Since the ministerial conference in Cancun, Doha Round service negotiations have focused almost exclusively on market access and, more specifically, on the bilateral request/offer process, which continues to advance irrespective of the political ups and downs of the Round. Negotiations are based on a bilateral request/offer mechanism between member countries. But by late September, only a hundred-odd countries had submitted an initial offer and some fifty a revised offer. Services represent 71% of trade in developed countries, versus 45% in countries of the South. The European Union alone accounts for 80% of world trade in services. Of the 163 service subsectors on record at the WTO, the EU is asking that developed countries liberalize trade for 139 more, and developing countries for 93. The thirty-odd least developed WTO countries are not required to submit offers.

The most significant – and controversial – recent development in the Doha Round services negotiations has been the strong push by certain WTO Members to establish mandatory minimum market access commitments (benchmarks). These initiatives are premised on the view that both the initial and the revised commitments offered so far leave much to be desired, and that the existing bilateral "request-and-offer" negotiating modality is not sufficient to achieve the depth and scope of liberalisation commitments desired by these Members.

While the request/offer process has proceeded slowly, almost no progress at all has been made in parallel discussions on the so-called “horizontal” and “GATS rules” issues. Horizontal issues include service liberalization assessment, disciplines on domestic regulation, credit for autonomous liberalization, S&D for least developed countries, and service subsector classification. GATS rules issues include negotiations on an emergency safeguard mechanism (ESM), disciplines for service subsidies, and government procurement. Both sets of issues are of particular interest to developing countries and national regulatory authorities.

The new phase of negotiations must address horizontal and GATS rules issues alongside market access issues. Various proposals have been made on GATS rules issues by both developed and developing countries, but differences remain wide and many technical questions unanswered. This is a source of concern particularly to developing countries, which see few potential benefits in current service negotiations if other market access issues are not addressed simultaneously. The lack of concrete results at the multilateral level has given rise to several new bilateral trade agreements that incorporate GATS-plus (and sometimes GATS-minus) standards, thus calling into question the integrity of the GATS framework, as indicated by the Trade Negotiations Committee chairman’s report and the WTO Director General.

While the Doha round has slowed down since Cancun, the trend towards regional and bilateral agreements (RTAs) has gained ground. Most of these RTAs contain service provisions. The majority of the service obligations in these new generation RTAs are “GATS-plus,” e.g., negative-list commitment schedules. However, some of them contain “GATS-minus” rules that are less far-reaching than GATS obligations, including limited definitions of modes 2 and 4, carve-outs for subsidies in services, the separation of certain services from the 12 sectors covered by the GATS (i.e., the creation of special chapters on e-commerce), and broader security exemptions. The proliferation of RTAs with service provisions could eventually render the GATS irrelevant. Furthermore, GATS-minus rules could potentially put these RTAs into conflict with WTO law.

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UNESCO Convention on the Diversity of Cultural Expressions and the services trade negotiations in Hong Kong

With a view to supporting francophone countries in their efforts to prepare for and participate in the Sixth WTO Ministerial Conference, the International Organization of the Francophonie (OIF) developed an action program including thematic workshops on trade negotiations, an online forum on trade negotiations, and a videoconference training session on the Doha Round (http://www.espace-economique-francophone.com/them_negoc_omc_OIF.htm#a1). Workshops on priority negotiation issues gave francophone country delegation representatives stationed in Geneva an opportunity to interact with senior experts. On October 24, Mr. Pierre Sauvé, an associate researcher at the London School of Economics and Political Science and expert on international trade and negotiations on services trade, discussed the theme “trade in services” with participants in an online francophone forum on Doha Round trade negotiations.

  • When asked how the UNESCO Convention on the Diversity of Cultural Expressions adopted on October 20 might influence negotiations on services, Mr. Sauvé indicated that this Convention is unlikely to have a major impact on ongoing GATS negotiations in the immediate future, for two reasons: First, because the Convention must be ratified and implemented by UNESCO member countries, which will take some time and not necessarily be synchronized with the Doha Round; second, because WTO member countries are free to decide on whether to make commitments in this sector (as in any other sector), and thus far have generally shown little interest in enhancing or modifying their (limited) liberalization offers in this sector. According to Mr. Sauvé, the symbolism of the convention and the goal it incarnates—to provide its signatories with greater opportunities for the public support of cultural production—are significant. Another participant stated that francophone countries gained considerably from the recent adoption of this Convention, and that in ongoing WTO negotiations, it was important to avoid the traps of proposing and/or welcoming requests submitted in this subsector because, as Mr. Sauvé notes, a WTO member country is free to determine the sectors in which it wishes to make liberalization commitments, as well as the restrictions it intends to uphold in these sectors when these commitments end.
  • Might service negotiations undermine the universal obligations of governments with regard to public services, as well as their ability to regulate, and do they compromise cultural diversity? Mr. Sauvé stressed that the right of states to regulate their service activities is crucial, and is recognized in the GATS preamble as well as many of its articles. The GATS in no way challenges this right and allows member countries to impose on foreign operators all the domestic regulatory obligations provided in national legislation, including those of a discriminatory nature in sectors subject to specific commitments. This includes public service and universality obligations. Public services—education, healthcare, postal services—are excluded from GATS jurisdiction when they are provided on a non-commercial basis and do not compete directly with private providers of equivalent services. This does not prevent WTO members from making liberalization commitments if they so desire in order to open these sectors to competition, which very few have done to date. It is worth noting in this regard that no proposal to liberalize healthcare services was put forth during the Doha Round, and only a small handful of countries—mostly developed—are arguing for a partial and limited opening of postsecondary education services, excluding subsidies. While these sectors are non-competitive, they are considered as excluded under the agreement. Similarly, regarding the issue of cultural diversity, each member country may decide whether or not it wishes to make liberalization commitments for audiovisual services (which few have done to date). WTO members can easily steer clear of this sector by making no commitments—like Canada, for example—if they believe such commitments might compromise their freedom to adopt policies in support of creators. Mr. Sauvé noted that the GATS does not require states to liberalize; rather, this process is based on each state’s well-understood and carefully calculated interests. The GATS is built on three or four pillars: (1) States can decline to make commitments, (2) member countries can open a single sector if they so desire, (3) opening can be gradual and progressive, and (4) countries can qualify their commitments.

  • Can the issue of cultural services (teaching and training, including via the Internet) be broached in WTO service negotiations? According to Mr. Sauvé, WTO members are free to broach this issue if and as they wish, including crossborder services provided electronically. He noted, however, that to date only a small minority of members (barely 10%) has made liberalization commitments in this sector, which many consider highly sensitive, and most of the commitments made involve commercial presence rather than e-commerce. Hesitation to broach this subject in the WTO is based in part on the fact that e-commerce in audiovisual services was only in its infancy at the end of the Uruguay Round in 1994. So far in the Doha Round, few countries have expressed interest in seriously revisiting this issue, and few have expressed interest in further liberalization in this area.

  • What is the European Union’s approach to service liberalization in the WTO and under bilateral agreements, and what are its priorities? Mr. Sauvé maintained that the European Union is indisputably a key player in ongoing WTO negotiations on services, since many EU countries are among the world’s leading service exporters. As a result, EU requests to further open service markets involve most of the sectors covered by the GATS (except those the EU itself considers sensitive, such as audiovisual services, education, and healthcare). In addition, these requests were directed at many WTO members at various levels of development.

In closing, Mr. Sauvé made recommendations to negotiators from developing francophone countries regarding negotiations at the Hong Kong ministerial conference: “Prudence, firmness, and a comprehensive vision—these are the keywords I believe should guide developing countries in the upcoming ministerial meeting in Hong Kong. Prudence, because service markets cannot be liberalized without significantly strengthening regulatory capacity and the ability to take advantage of new market access opportunities that may arise on completion of the Doha Round. This takes time and must therefore involve gradual commitments. Firmness both with regard to the major arbitrations arising from the cycle as a whole, and from the urgent need to meet the expectations of a cycle focused primarily on development; this requires that priority issues for developing countries be treated as such, both in discussions on services and in negotiations. Last, a comprehensive vision, because all WTO members—regardless of their level of development—have offensive interests to defend with regard to services. These interests cover an increasingly wide array of activities. Consequently, participants would do well to envision a gradual opening of key sectors that are tied to infrastructures (telecommunications, finance, transport, professional services), have a considerable impact on their trade in goods and agricultural products, and can have a decisive influence on their growth and long term competitiveness.”

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The need for countries to refrain from making any free trade commitments involving culture in the negotiations within the framework of the GATS

It is worth noting that the impact of these trade negotiations on the cultural sector is crucial. Trade agreements have been placing increasing pressure on countries to give up their right to have cultural policies to ensure their citizens have access to their own culture, as well as culture from other countries around the world. This is why the UNESCO Convention on the Diversity of Cultural Expressions is so important: It recognizes the distinctive nature of cultural goods and services as transmitters of value, identity, and meaning that transcend their commercial dimension.

The International Liaison Committee of Coalitions for Cultural Diversity (which represents 31 coalitions for cultural diversity in as many countries)—like the European Union, the International Organization of the Francophonie, and other linguistic regions (Portuguese-, Spanish-, and Arab-speaking)—has always stressed the need for countries to refrain from making any free trade commitments involving culture during the Convention negotiation, adoption, and ratification processes that would limit the scope of the Convention. A number of governments, including Canada and Québec, have decided to refrain from making free trade commitments and to protect their policies whenever issues arise that could potentially affect their ability to adopt cultural support measures, particularly on matters involving goods, services, investment, competition rules, and intellectual property.

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