Trade and culture: the United States

ABSTRACT

The US government has long held that cultural goods and services represent an economic sector like any other and should be liberalized. The American cultural and digital industries enjoy a strong competitive advantage and constitute a leading export sector. This US stance has antagonized many countries pursuing cultural policies. This has led the US government to soften its trade strategy and accept financial measures, as well as a broader array of ‘traditional’ cultural regulatory instruments. At the same time, the United States insists on the absence of restrictions in digital networks, through which cultural contents are to be increasingly distributed and accessed. Under the negative-list negotiating approach, whereby everything is liberalized save for specific exceptions, states parties to US trade agreements have secured a varying array of measures. However, only a handful, essentially industrial countries, have secured digital exceptions, the latter coupled with conditions raising questions concerning their applicability.

KEYWORDS:

• Cultural products
• cultural policies
• free trade agreements
• US cultural trade strategy
• commitments/exceptions

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. The principle of non-discrimination, central in the international trading regime, has both external and internal dimensions. The external one consists of the most-favoured-nation (MFN) treatment, whereby any trade advantage a country gives to another must be extended, immediately and unconditionally, to all other countries. As for the internal dimension of non-discrimination, it revolves around national treatment, which requires countries to treat imported products no less favourably than domestic products with respect to internal taxes and regulations.

2. Yet, under the regulatory oversight of the Federal Communications Commission, US broadcasters have nonetheless had ‘public-interest obligations’ and been subject to local and children’s programming requirements, closely resembling quotas in their design and impact (Grant and Wood 2004, 212–15).

3. Despite problems in measuring the extent of international trade in services, figures on US exports of cultural services are indicated in order to give an idea of their economic magnitude.

4. While heavily influenced by the General Agreement on Tariffs and Trade (GATT), regulating since 1947 trade in goods, the GATS entails a different normative framework and more modest obligations. Unlike the GATT, market access (i.e. the conditions set by countries for the delivery of specific services into their territory) and national treatment (according to which imported and domestic services should be treated equally) are not general obligations. Following the bottom-up or positive-list negotiating approach, such obligations only apply if and to the extent that specific commitments are listed in a country’s schedule.

5. Under the United Nations Provisional Central Product Classification (UN CPC) code, used as an optional guiding tool by states for the GATS negotiations, ‘audiovisual services’ are classified as a sub-sector of ‘communication services’ and divided into six sub-categories: motion picture and video tape production and distribution (CPC 9611); motion picture projection (CPC 9612); radio and television (CPC 9613); radio and television transmission (CPC 7524); sound recording; and ‘other’ unclassified audiovisual services, such as multimedia. The first four sub-categories, with their corresponding codes, are also further divided. Most cultural services other than audiovisual are included within ‘recreational, cultural and sporting services.’ These comprise: entertainment (including theatre, live bands, and circus) (CPC 9619); news agency (CPC 962); libraries, archives, museums, and other cultural services (CPC 963); sporting and other recreational services (CPC 964); and an ‘other’ sub-category. Among the remaining cultural services, advertising (CPC 871) as well as printing and publishing (CPC 88442) belong to ‘other business services.’Given the specifics of services, compared with goods, the WTO has defined trade in services to span four modes of supply: Mode 1 – cross-border, where a service is supplied from the territory of a country into the territory of another; Mode 2 – consumption abroad, where a service is supplied in the territory of a country to the consumers of another; Mode 3 – commercial presence, where a service is supplied through the establishment of a legal entity of a country in the territory of another (i.e. foreign direct investment); Mode 4 – movement of natural persons, where a service is supplied by a national of a country in the territory of another.Under the GATS, a sector or sub-sector included in a country’s list of specific commitments does not automatically entail full compliance with the market access (Article XVI) and national treatment (Article XVII) obligations. States rather decide, for each mode of supply, whether to undertake full commitments (i.e. without any limitations), partial commitments (i.e. inscribing in their schedules measures or types of measures inconsistent with Articles XVI or XVII to be maintained or adopted in the future), or no commitment at all (i.e. keeping flexibility to maintain or adopt any measure inconsistent with Articles XVI and/or XVII with regard to a given mode of supply).

6. To reduce the scope of various measures or regulations, and notably their trade effects, or to eliminate them altogether.

7. To ensure that measures or regulations remain the same or do not expand in scope, so as to prevent any further trade effects.

8. Digital products include computer programs, texts, videos, images, sound recordings, and other products that are digitally encoded and produced for commercial sale or distribution, regardless of whether they are fixed on a carrier medium (CD, DVD or other) or transmitted electronically. This definition was gradually refined or fine-tuned as successive US FTAs were being negotiated.

9. Intellectual property rights are understood as exclusive rights granted to creators and inventors to control the use made of their productions. For literary and artistic works, the most relevant for cultural products, these correspond to copyright and related or neighbouring rights.

10. It would be cumbersome to refer to the articles or page numbers of specific provisions and/or exceptions in various US FTAs. All US FTAs are included in the list of references, with their web links, from which their texts, provisions, and exceptions can be accessed.

11. Australia*, Brunei, Canada*, Chile*, Japan, Malaysia, Mexico*, New Zealand, Peru*, Singapore*, the United States, and Vietnam. Countries with an asterisk already had an FTA with the United States.

Additional information

Funding

This work was supported by the Social Sciences and Humanities Research Council of Canada [435-2016-0778].

Notes on contributors

Gilbert Gagné

Gilbert Gagné is Professor and Chair of the Department of Politics and International Studies at Bishop's University, Sherbrooke, Quebec, Canada. His teaching relates principally to international diplomacy and organizations, Canadian foreign policy and Canadian-American relations. His research pertains mainly to the treatment of cultural products in trade agreements; subsidies and trade dispute settlement, with a particular emphasis on the Canada-US softwood lumber dispute; as well as the protection of foreign investment and investor-state dispute settlement.