Trade and culture: the ongoing debate

ABSTRACT

The debate over how to reconcile trade liberalization with cultural policy is a long-standing one. There is great variation in how countries have navigated this debate. Furthermore, evolving individual policy approaches show noteworthy dynamism, largely in response to domestic politics, shifts in the international trading system and technological developments. This special issue explores different approaches to the trade and culture debate across geographic space, as well as the evolution across time through analysis of six cases – Canada, the European Union, South Africa, Latin America, the United States and China.

KEYWORDS:

• Trade liberalization
• cultural policy
• cultural industries
• UNESCO convention

In November 2017, Asia-Pacific Economic Cooperation (APEC)¹ met in Da Nang, Vietnam for what was billed as a momentous gathering. Despite Donald Trump’s decision to withdraw the United States, the eleven remaining signatories of the Trans-Pacific Partnership (TPP) were expected to ratify the agreement. A high-profile leaders’ meeting was to be the site of the final announcement. However, at the last minute, Canadian Prime Minister Justin Trudeau was a no-show, postponing agreement and setting off a media frenzy about his apparent snub. One prominent explanation for his actions was that the parties had not reached agreement on the promotion and protection of culture.

For those who are new to trade, this might have been perplexing. But, those who had followed Uruguay Round General Agreement on Tariffs and Trade (GATT) or North American Free Trade Agreement (NAFTA) negotiations, among others, recognized a long-standing issue, namely how to reconcile trade liberalization objectives with those of cultural policy. In Da Nang, Canada was revisiting an issue that it had raised in 1988 while negotiating the Canada–US Free Trade Agreement (CUSFTA). Canada is not the only government to pursue this track. France pushed hard for audiovisual industry protections in late 1980s-early 1990s GATT talks. The European Union later pursued this strategy too. Korea has also sought cultural protections, notably in its free trade agreement with the United States. In fact, concerns about culture have come up repeatedly in trade negotiations over the last several decades. Following the Da Nang meeting, trade-watchers might have felt compelled to say, ‘here we go again.’

Despite the prevalence of this issue across time and space, there is great variation in the aspects of culture that governments seek to protect, as well as the strategies that they employ to do so. For example, Canada has long focused on cultural industries, generally understood to include books, magazines, periodicals, newspapers, film and video, audio and video music recordings, and radio, cable and television broadcasting. By contrast, France (and, by extension, the EU) has emphasized the narrower category of audiovisual industries, primarily television and film.

Interestingly, at least thirty trade agreements in the last ten years have included provisions to protect traditional knowledge (TK). Latin American governments, led by Peru, as well as the government of New Zealand, have been key parties to this phenomenon, often with the encouragement of their respective Indigenous communities. This suggests a variety of understandings about which aspects of culture might be threatened by trade liberalization or, alternatively, can benefit from inclusion in trade agreements.

Of course, culture encompasses many aspects of our lives and not all of them are part of the trade and culture debate. Nonetheless, things like film and music have a ‘dual nature’ (Garcia Leiva 2017, 767). They are lucrative economic products, but also ‘vectors of identity.’ Certain countries have pretty consistently been associated with one or another side of this divide. The US has perennially opposed exceptions for cultural industries. On the other hand, France and Canada have maintained that cultural industries make a socio-cultural and political contribution beyond their commercial value. The United States has staked out its position in large part due to the enormous export revenue that its industry generates. As Sands (2001) puts it, ‘In the United States, what Canadians call culture is part of an entertainment industrial complex that combines publishing with broadcasting, cable and satellite system, filmmaking, video and television production, theatre, music performance, recording and distribution’ (Sands 2001, 484).

The central challenge in navigating the trade and culture debate arises when the principles of the trading system are applied to the goals and strategies of cultural policy. Cultural policy can serve a variety of objectives, ranging from support for local artists to funding public broadcasting. These policy choices are idiosyncratic, reflecting often complex national (and sometimes sub-national or supra-national) values, preferences, philosophical predispositions, historical legacies and domestic politics. Regardless of the objectives, tried-and-true regulatory approaches that have long served cultural policy goals in a particular place can come under fire, not because they are controversial or ineffective cultural policy tools. Instead, they are assessed by trade policy criteria in the context of trade negotiations. As a result, trading partners can characterize legitimate, favoured cultural policies as protectionist trade strategies and sometimes target them for dismantlement. In response, governments may seek to carve out space to continue seemingly discriminatory local cultural policies because they are thought to achieve an important socio-cultural or political objective.

This phenomenon springs, in part, from the fact that over 160 countries have committed to the principles of the multilateral trading system through their membership in the WTO. Non-discrimination is a key principle underpinning the trading system (VandenBossche 2008, 321). Its two components are the most-favoured nation (MFN) and national treatment obligations. ‘In simple terms, the MFN treatment obligation prohibits a country from discriminating between other countries; the national treatment obligation prohibits a country from discriminating against other countries’ (Van Den Bossche 2008, 321).

There are exceptions, some built into the international trading system. For example, developing countries benefit from the Generalized System of Preferences, which imposes less stringent liberalization requirements on them, like longer implementation timelines. In addition, Article 20 of the GATT Agreement sets out circumstances under which governments can discriminate for reasons such as national security or a public health concern. However, cultural policy only benefits from negotiated exceptions. More commonly, cultural measures can be framed as discriminatory trade practices. From a cultural policy standpoint, a domestic content requirement for radio or television can be easily justified in terms of a desire to ensure that local voices are heard. However, from a trade policy standpoint, such a measure appears to grant an advantage to local television and radio programming producers that is not afforded to foreign ones. Opponents of these measures argue that they fly in the face of the national treatment principle.

To be sure, many aspects of domestic cultural policy do not overlap with trade policy. In addition, ample room exists to criticize or support the merits of specific cultural policies regardless of their compatibility with trade policy. These dimensions of cultural policy are not addressed in this special issue. Instead, contributors assess the unique challenges across a variety of geographical contexts in simultaneously achieving the trade and cultural policy goals that governments have identified as desirable. They shine a light on the different ways that a sampling of governments across the world have addressed the nexus between trade and culture. Their different strategies are driven by economic, cultural, and/or socio-political concerns and they can be significant sticking points in trade agreement negotiations.

Indeed, these various concerns are such that efforts to reconcile trade and culture do not only differ across geographical space, with individual governments adopting idiosyncratic policies or perspectives. They can also vary across time within a particular country. Shifts in national approach are driven by a range of factors, as contributors to this special issue show. These factors can be grouped into three broad categories – domestic factors, developments in the world of trade, and developments in culture. In terms of domestic factors, political and economic developments are critical. For example, Cattaneo and Snowball show how South Africa’s relationship to the trade and culture debate is a function partly of political efforts to move beyond the apartheid era and also to promote economic development. Similarly, Jaramillo describes how shifts in partisan leadership in Latin America had consequences for how the trade and culture debate was navigated, as did efforts to make neo-liberal economic reforms.

Developments in the world of trade have also had an impact on how various governments relate to trade and culture. The current trading system dates to the post-WWII period when 23 countries signed the first version of the GATT. By 1994, the GATT had 123 signatories. As they made progress in tariff reduction, they turned their attention to other perceived ‘irritants,’ or non-tariff obstacles to liberalization, like subsidies, government procurement, technical barriers to trade and, later, trade in services, intellectual property, and regulatory differences. The expanding number of participating countries, as well as the growing list of issues on the agenda, made the GATT process of ad-hoc rounds of talks challenging and unwieldy. Demands for a proper institution led to the creation of the World Trade Organization (WTO) in 1995. The WTO spawned two key developments for trade and culture. First, it brought into being a powerful dispute settlement body. One of the early cases it would hear concerned the right of the Canadian government to continue its support to domestic periodicals. Canada lost this dispute and had to change its domestic magazine support policies.

The UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions was born out of this surprising (to some) decision against Canada, entering into force in 2007 in part to provide a counterweight to the prominence of the non-discrimination principle. Over 140 countries have ratified the Convention, though notably, the United States is not among them. Several provisions in the Convention are relevant to the current discussion. Importantly, it enshrines that, ‘cultural activities, goods and services have both an economic and a cultural nature, because they convey identities, values and meanings, and must therefore not be treated as solely having commercial value.’ It also establishes that, ‘states have, in accordance with the Charter of the United Nations and the principles of international law, the sovereign right to adopt measures and policies to protect and promote the diversity of cultural expressions within their territory.’ At the same time, the Convention cannot trump signatories’ other international commitments. Article 20 states that, ‘parties recognize that they shall perform in good faith their obligations under this Convention and all other treaties to which they are parties.’ It goes on to note that, ‘Nothing in this Convention shall be interpreted as modifying rights and obligations of the Parties under any other treaties to which they are parties.’ Despite these limits, Richieri Hanania in this issue shows how the EU approach to trade and culture has been directly affected by the advent of the UNESCO Convention.

Complex multilateral negotiations at the WTO would soon stall, prompting governments to shift from the centralized WTO to a more fragmented and growing set of free trade agreements. Many governments are now relying on FTAs to advance liberalization agendas, creating many more opportunities to address the trade and culture debate. Goff describes how the proliferation of trade agreements has had consequences for Canada’s approach to cultural industries in trade negotiations. Neuwirth shows how the rise of China has the potential to inject a very different perspective on the relationship between trade and culture into contemporary discussions.

Finally, the third category of factors has precipitated shifts in national approaches to trade and culture. Marshall McLuhan famously observed over fifty years ago that ‘the medium is the message’ (McLuhan 1964). In many respects, this is still true. Our substantive cultures have evolved in myriad ways in recent decades as fashions shift and tastes change. But, perhaps most significant for the purposes of the present discussion are the changes in how we produce and consume cultural content. Increasingly, we encounter culture on digital platforms. Electronic books, streaming music, and film downloads supplement and, in some instances, eclipse traditional modes of consuming culture for entertainment. At the same time that these digital outlets ease access to a wide variety of cultural experiences, they can provide inadequate safeguards for forms of traditional knowledge and for artists relying on copyright, among others. Digital technology, therefore, changes the context within which we now seek to reconcile cultural policy goals with trade liberalization in at least two ways. If the cultural policy is targeted toward traditional media, but people are not accessing cultural products through those formats, then that domestic policy will be inefficient at best. Furthermore, if traditional media are protected in trade agreements, but new digital media are not, then a lot of the work to protect and promote cultural diversity may be lost. In this issue, Gagné shows that the American position on the trade and culture debate has shifted in recent negotiations to reflect the government’s clear commitment to digital trade.

Against the backdrop of these key developments, each contributor explores national or regional strategies to reconcile cultural goals with trade liberalization. They illuminate the preferred approach the government takes to the cultural policy where it intersects with trade liberalization, outlining the key cultural sensitivities in play and how the relationship between culture and trade is understood. They then outline how and why an approach might have evolved over time. The issue is comprised of six cases – Canada and the European Union as leaders in this debate; South Africa and Latin America (with a focus on Mexico) to provide the perspective from developing countries. Finally, we explore the United States as a foil to many other countries making policy in this area, and China, which may bring a fresh perspective and a new approach.

Goff’s analysis of Canada shows how that country’s approach has evolved through recent trade agreement negotiations. Each trading partner is a bit different, as is each deal. As a result, the Canadian effort to preserve space for domestic cultural policy reflects this. Similarly, Richieri Hanania shows how the EU has shifted its approach, largely due to its embrace of the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions.

Jaramillo takes on the ambitious task of trying to capture trends across Latin America. She shows that policies have evolved along two tracks. One track reflects the export prowess of Latin American television programs; the other describes the concerns of countries rich in traditional knowledge and traditional cultural expressions. Catteneo and Snowball trace South Africa’s efforts to harness cultural industries to promote growth, development and job creation, while also seeking to build a post-apartheid identity. These two objectives can certainly co-exist, depending on the government of the day.

Gagné takes on the case of the United States, whose desire to foreground the commercial value of culture has so shaped the trade and culture debate. He shows that recent US trade agreements reflect a growing embrace of digital trade. Finally, Neuwirth explores the approach of a new entrant in this debate, China. He argues that China brings a much more holistic perspective to a debate that traditionally has been understood as dichotomous. Time will tell if China will influence other countries on this front.

This special issue is a timely intervention in the conversation about trade and cultural policy. In some instances, a substantial amount has been written on a particular country or region included here, however in others, considerably less so. Therefore, the added value of the special issue is both to offer an analysis of regions that get less attention with regard to this subject and also to assemble these analyses under one cover. We also hope to underline the inherent dynamism in the approaches that governments adopt by tracing their evolution in recent decades.

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Notes on contributors

Patricia M. Goff

Patricia M. Goff is an Associate Professor in the Department of Political Science at Wilfrid Laurier University and a Senior Fellow at the Centre for International Governance Innovation, both in Waterloo, Ontario, Canada. Her research explores the politics and governance challenges of trade policy.

Notes

1. APEC is a regional economic forum comprised of 21 member countries.