Highlights:
Taking
a Closer Look at the US Focus
on Bilateral Trade Deals
In late
September, following the stalemate at the World Trade Organization (WTO)
ministerial meeting in Cancun, Mexico, for the Doha Round of trade negotiations,
United States Trade Representative Robert Zoellick wrote a characteristically
blunt
article in the Financial Times of London carrying the headline ‘America
will not wait for the won’t-do countries.’
Anyone wondering what that warning would translate into in terms of action
will find the U.S. trade strategy laid out in daunting detail in a document
entitled ‘The President’s 2004 Trade Policy Agenda’ and
the accompanying ‘2003 Annual Report on the Trade Agreements Program’.
Combined, the two documents total 237 pages and lay out in comprehensive
fashion the US approach to forging ahead in its efforts to secure maximum
liberalization commitments from other countries in all sectors, including
culture.
Bilateral and regional negotiations are accorded extensive space—almost
90 pages—and it is clear that the US strategy is to use these negotiations
to secure precedent-setting agreements in every region of the globe.
Recent bilateral negotiations with countries such as Australia, Chile,
Morocco and Singapore have attracted significant attention from the cultural
sector. What a review of the Trade Policy Agenda makes clear is that these
recent agreements are a test run for a much broader wave of bilateral
agreements that are now in the works.
The Trade Policy Agenda and annual report also make clear that FTAs do
not emerge in isolation. They are generally preceded by more rudimentary
bilateral agreements that lay the foundation for a full-fledged FTA.
These preliminary bilaterals consist of Trade and Investment Framework
Agreements, or TIFAs, and Bilateral Investment Treaties, or BITs. As the
annual report states, "These customized arrangements can be employed
to resolve trade and investment issues, to improve performance in areas
such as intellectual property rights and customs enforcement, and to lay
the groundwork for a possible FTA."
What is striking is the sheer scale of the US bilateral initiative. As
this issue of Coalition Currents went to publication, the US had 24 FTAs
concluded, in negotiation or announced. Forty-five BITs had been concluded
or were in the works. And 52 Trade and Investment Frame Work Agreements
had concluded. In all, 121 trade negotiations with some 90 countries (TIFA
and BIT negotiations are sometimes undertaken with a country concurrently).
Excerpts from the 2003 annual report signal US intentions in several key
regions of the world.
Asia. The South East Asian Nation members of ASEAN are the early
focus of the United States. The Enterprise for ASEAN Initiative, announced
in October 2002, kicked off the US plan for this region. "The US
goal is to create a network of bilateral FTAs with ASEAN countries."
Some 17 agreements are at various stages of negotiation in this region.
Middle East. The US’s stated goal is "creating a region-wide
free trade area by 2013." To this end, it will "expand its network
of TIFAs and BITs throughout the region." FTAs have already been
concluded with Jordan, Israel and now Morocco, and talks were launched
with Bahrain in January. BITs have so far been concluded with six countries,
TIFAs with 12 and one is in the works with Oman.
Latin America/Caribbean. "The United States is on track to gain
the benefits of free trade with more than two-thirds of the Western Hemisphere
through sub-regional and bilateral FTAs." The situation in this region
also demonstrates how initial FTAs become a template that enables the
US to accelerate its negotiations. After working out FTAs with Chile,
then El Salvador, Guatemala, Honduras, Nicaragua and Costa Rica (the CAFTA
countries) over the course of 2003-2004, the United States concluded a
new FTA with the Dominican Republic on March 15--only four months after
announcing the beginning of the talks last November. FTAs are also in
the works with Panama, Colombia and Peru, with prep work started for Bolivia
and Ecuador. BITs have been signed with eight countries, and another with
Uruguay has been announced.
Africa. FTA talks are well underway with Botswana, Lesotho, Namibia,
South Africa and Swaziland (the Southern African Customs Union, or SACU).
"The US-SACU FTA will be a first-of-its-kind agreements with sub-Saharan
Africa," Robert Zoellick said in a March 9 appearance before the
Senate Committee. Five BITs have been concluded and two major regional
TIFAs covering some 28 African countries have been signed since 2001,
along with TIFAs with Nigeria, Ghana and South Africa.
Obviously, US ambitions in these trade negotiations extend far beyond
the cultural sector. But given the importance of ‘entertainment industry’
exports to the US economy—they now rank as the country’s number
one export—the Americans are pressing hard in every negotiation to
secure maximum liberalization in sectors such as services, which unless
specifically exempted include film, television, music and new media.
All of which is to say the cultural sector has now entered an extremely
risky period in the campaign to place culture outside the ambit of the
WTO or of bilateral trade agreements.
Last October’s decision by UNESCO to undertake development of a convention
on diversity of cultural content and artistic expression was an important
win in this campaign. But the proliferation of bilaterals make it imperative
that cultural professional organizations mobilize to talk with their governments
to find out what is happening on the trade side and if at all possible
persuade their government to refrain from commitments on culture in these
talks.
Some key countries have so far stood back from this push. The European
Union member nations, as well as Argentina, Brazil, China, India and Russia,
to name a few. But the more widespread US bilaterals become, the more
they will become precedents to be reckoned with even for these major economic
powers.
For smaller countries, the picture is even more daunting, because today’s
bilateral with a neighbouring country stands to be the template on offer—take
it or leave it—when their government sits down at the table with
the objective of securing its own FTA. This arises from one of the major
realities intrinsic to bilaterals: the power relations between an economic
and political giant like the United States and almost any other country
are fundamentally imbalanced.
It is important to emphasize that TIFAs tend to be extremely general in
nature, and culture is rarely touched directly at this stage. The interval
between a TIFA or an investment treaty and a FTA therefore provides a
window for cultural organizations to mobilize and prepare for the inevitable
pressure that will be brought to bear on their country to make concessions
on culture in more advanced trade negotiations.
A more immediate reprieve, albeit short-term, is likely to come as a result
of the United States presidential election campaign. Anti-free trade sentiment
has been rising among U.S. voters and this gives rise to the possibility
new FTAs may be put on ice until after the November elections—most
likely, until after the newly elected administration takes office in January
of 2005.
What can be done in the meantime? One possible approach can be taken from
the position taken by Canada, a country which learned some hard lessons
of its own about the difficulties of securing a bulletproof exemption
for culture in the context of its 1989 Free Trade Agreement with the United
States.
In the years since, as momentum has grown to develop a dedicated convention
on diversity of cultural content and artistic expression, Canada has thrown
its support behind this process while clearly stating that in the meantime
it would make no commitments on culture in the context of international
trade negotiations. In other words, a moratorium on liberalization commitments
on culture in trade talks while the convention is being developed at UNESCO.
Advancing the position of a moratorium on commitments affecting culture
may seem like a tall order, but it is absolutely consistent with the logic
of securing a dedicated convention on cultural content and expressions
outside of the WTO and at UNESCO. And the more countries that adopt this
position the greater influence it will acquire.
This is what we need during the critical period leading up to the 2005
UNESCO General Conference—perhaps even as far out as the 2007 General
Conference, if this is the amount of time required to develop a strong
convention.
The proposal for a moratorium on commitments affecting culture in trade
agreements until a convention on cultural diversity is in place—and
the new ground rules for culture are clarified—is a topic we will
return to in a future issue of Coalition Currents.
Australian
Culture Sector’s Fears
Borne Out by Release of FTA Draft Text
Preliminary details
concerning how culture was treated in the Australia-US Free Trade Agreement
(FTA) concluded February 8 had left Australia’s cultural sector
fundamentally pessimistic about what they would find when the official
text of the FTA was finally released March 3. Their concerns have
been more than borne out by the official text.
"It’s worse than our negotiators told us in December, worse
than we thought when they returned from Washington," says Richard
Harris, Executive Director of the Australian Screen Directors’
Association (ASDA).
In a nutshell, the low points of the agreement from the point of view
of the cultural sector are that:
-
Although current mechanisms have been kept in place –in other words, existing policies--they are subject to 'ratchets', meaning measures such as Australia’s 55% domestic content quota for television can be reduced, but not increased, and once reduced can never be returned to prior levels.
-
Multi-channelling (multiple channels distributed via one digital signal) and pay TV (i.e. subscription based services) have been locked in at low levels (and Australia can only intervene in pay in one way - ie by setting expenditure levels. And these levels can only be adjusted by consulting with the US.
-
New media. Australia retained some flexibility to regulate in this area but the criteria for a policy favoring domestic producers or content are onerous. Again, Australia must consult with the United States. There also remains uncertainty about how new media is defined.
-
A specific consequence of the failure to secure a broad exemption for culture in the FTA is Australia has lost the ability to regulate cinema forever—for example, by establishing screen quotas. The same will hold true for any media technologies to be developed in the future.
Geoff Brown, the executive director of SPAA (Australia’s film and
television producer’s association) was blunt in dismissing critics
who claimed the cultural sector was over-reacting in its denunciation
of the deal.
"U.S. interests are now allowed to sit at our table before an Australian
government can implement any increase in drama content regulations on
Pay TV. We have to argue the merits of our case up against the interests
of the U.S. industry. This explains the depth of feeling in our industry,"
Brown wrote in a letter to the Australian Financial Review.
"U.S. interests will now determine what we can see on our screens
into the future," he added.
Under the circumstances, it is difficult to find much to be positive
about but the reality is that the fact that Australia retained its existing
policies—of which it has an extensive array—along with some
limited margin for manœuvre in new media, is a tribute to the sustained
public and political lobby campaign carried out by the member organizations
of the Australian Coalition for Cultural Diversity.
"The truth is it could have been worse - we could have lost new
media, and pay could have been kept at standstill.," noted Harris.
One of the central mysteries of the entire Australia-U.S. FTA negotiation
is why the John Howard government ultimately paid such a high price
to clinch a deal that granted it only minuscule increases in access
to its market for Australian beef, sugar and other agricultural products.
For very little in return, Australia committed to major concessions
not just on culture, but also in the manufacturing sector and—although
the exact nature of Australia’s commitments remain much debated,
with respect to the administration of Australia’s pharmaceuticals
program.
"Screen producers would have been disappointed, but philosophical
had the agricultural sector achieved across the board gains, but it
is obvious that both sectors have missed out," Geoff Brown noted
in his letter.
Critics of the deal hold little hope that Australia’s legislative
process will trip it up. While there will be Senate hearings into the
FTA, the government is not bound by any recommendations that emerge
from this process.
Nor is it expected that the Australian Labour Party—the country’s
opposition party—would be willing to block enabling legislation—legislation
required to bring the FTA into effect—on the basis of how culture
was treated in the deal.
At this point, the major unknown is how the FTA review process will
play out in the United States Congress—which does have the power
to reject the deal.
General anti-free trade agreement sentiment has been rising in the U.S.
as the 2004 presidential election contest heats up. But recent reports
from Washington indicate that given the major concessions Australia
made in their FTA with the US, its chances of passing are even higher
than those for another recently concluded FTA with the Central American
Free Trade Area countries : El Salvador, Guatemala, Honduras, Nicaragua,
Costa Rica and Dominican Republic.
Morocco’s
Culture Sector Awaits Release of FTA Text
With
no date set for the release of the official text of the Free Trade Agreement
(FTA) signed by Morocco and the United States on March 2, Morocco’s
cultural sector continues to wait for the details of exactly how culture
was treated in the deal.
Two days after the conclusion of the deal, Morocco’s Minister for
Foreign Affairs and Cooperation Taïb Fassi Fihri issued a statement
asserting that "the FTA would have no effect on the state’s
subsidies for all forms of cultural production—whether books, films
or other sectors". (our translation)
The Minister also stated that foreign investment in Moroccan television
and radio would be capped at a maximum of 51 per cent (although this
by definition provides for foreign investors to hold a controlling interest
in a Moroccan cultural enterprise).
Government assertions aside, what remains uncertain in the absence of
an official text is the exact nature of policies that would be permitted
in the wake of the FTA—for example, whether policies would be restricted
simply to subsidies, or whether domestic content quotas will be allowed—and
whether other policies can be applied. There is also the question whether
subsidies could be reserved for cultural content produced by Moroccan
enterprises as opposed to multinationals.
A fact
sheet issued by the United States Trade Representative stated that
Morocco will accord substantial market access across its entire services
regime, subject to very few exceptions, and said that audiovisual was
among the key services sectors covered in the agreement.
The USTR also noted that the FTA uses the so-called ’negative list’
approach, meaning that all sectors are covered unless specifically excluded.
Filmmaker Nabil Ayouch, one of the leaders of Morocco’s Coalition
for Cultural Diversity said Morocco’s cultural organizations obviously
must withhold judgment until they can examine the full text. But he
did say there is some cause to be hopeful that the Moroccan government
may have retained at least some capacity to regulate the cultural sector,
however limited.
In the meantime, Morocco’s Coalition for Cultural Diversity has
grown to include some 13 cultural organizations since it was established
last December, and its members have now agreed that the coalition should
remain an active force on the country’s cultural scene.
The Coalition has decided to continue its campaign of critiquing the
recent FTA and drawing public attention to its concerns through a media
relations campaign. It has also decided to constitute itself legally,
and three members of the coalition are currently working on by-laws
in anticipation of a formal general meeting at which the ad hoc coalition
would be legally constituted.
Second
Meeting of UNESCO Experts Committee
set for end of March
The
group of experts selected by UNESCO Director General Koichïro Matsuura
to carry out the initial work in developing an international convention
on cultural diversity will meet for the second time for a five-day session
starting March 30 in Paris.
Following this meeting, Director General Matsuura will report on the
progress the experts have made at the next meeting of UNESCO’s
Executive Board, which is scheduled to begin April 14.
It is possible that a third meeting could be held in May or June, but
it is expected that UNESCO would then proceed to what it calls a ‘Category
2 Inter-Governmental Consultation’ at which all member states would
be invited to participate, and which in reality is as much a negotiation
concerning the content of the agreement as it is a process for completing
the work of drafting the actual text.
A report on the first meeting has been widely circulated, although it
is not yet available on UNESCO’s website. Published February 20
and identified as document CLT/CPD/2003-608/01, the report provides
a highly nuanced recap of how the initial exchange among the experts
played out with respect to the major themes to be addressed in the convention:
Aims of the Convention. A number of experts stated that the "aim
of the convention was not to protect cultural diversity in the widest
sense of the term, but rather to protect a specific aspect of cultural
diversity, namely the diversity of cultural contents and artistic expressions."
Discussion regarding aims can be expected to continue at the second
meeting but "a preliminary outline of the objectives was proposed
as follows: (i) to recognize the specificity (culture/trade duality)
of cultural goods and services and accordingly envisage appropriate
measures, (ii) to identify the obligations of the State Parties in respect
of the protection and promotion of cultural diversity, (iii) to preserve
the rights of the States Parties to maintain or adopt appropriate measures
for the promotion of cultural diversity, and (iv) to strengthen international
cooperation and solidarity with a view to ensuring a balance between
developing and industrialized countries in terms of production and access
to the international market."
Definition and Fields of application. Experts covered such themes
as criteria for defining cultural products, links between forms of cultural
expression, cultural products, cultural industries and cultural policies,
cultural capital and culture and cultural diversity. However, "the
experts pointed out that no clear conception of the field of application
of the Convention had emerged from the discussion," and that this
should therefore be placed on the agenda of the next meeting.
Relationship to other international instruments. The experts identified
basic principles of WTO agreements—as presenting the primary area
of potential conflict with the treaty "if the future Convention
were to authorize certain forms of protection for cultural products
or cultural industries." The report concludes that "It remained
the general opinion that the great challenge was the question of how
UNESCO would manage, in the future Convention, to develop an innovative
cultural approach in the current international legal context in which
commercial considerations tended to take precedence. That challenge
had legal and technical implications, even if its scope was not confined
to these. The experts accordingly specified that the future Convention
should have a purely cultural objectives, being of an essentially cultural
nature, and should not seek to modify rights and obligations of the
States elaborated under other international agreements."
International Cooperation and Assistance. Experts were unanimous
in viewing these principles as "linchpins of the future Convention.
In the view of the experts, the issue of international cooperation and
assistance should focus on the possibility of access by all countries
to the diversity of each others’ cultural content and artistic
expressions and support for developing countries to enable them to set
up cultural industries capable of meeting the domestic and international
demand for cultural products."
Implementation of the Convention. "(I)t was pointed out
that the success of the future Convention would depend largely on the
follow-up mechanism." The experts discussed the approach of drawing
on models devised for other international instruments such as the WTO
(which provides for good offices couple with recourse to a panel to
make rulings in the event of disputes), as well as UNESCO’s own
approach, which provides for an assembly, an interministerial committee
and working subgroups on cooperation, as well as mediation, among other
measures. "It was also stressed that any mechanism that entailed
more weighty procedures, administrative tasks and costs should be avoided."
Although it is not uncommon for there to be changes in the composition
of an experts group from one meeting to another, the vast majority of
those who participated in the December meeting are expected to return
for the March 30 meeting, and they may be joined with one to three new
experts invited to join the discussion by UNESCO.
The full list of experts is not available, but experts identified in
UNESCO’s report on the first meeting include Ivan Bernier, Tyler
Cowen, Mihaly Ficsor, Toshiyuki Kono, Carols Moneta, Anthony Rudder,
Alexander Sadovnikov, David Throsby, and Kwasi Wiredu.
One unresolved issue is what provision UNESCO will ultimately make for
organizations representing cultural professionals—not just artists,
actors, writers, directors, musicians and visual artists but publishers,
independent producers, broadcasters and distributors—to feed into
the process for developing the convention.
However, a recently-posted document on the UNESCO website concerning
the provisional agenda for the April Executive Board meeting—Document
169 EX/4—notes that "NGOs expressed the wish to be involved
in the preparatory work for the preliminary draft of an international
convention." The document also notes that NGOs would like UNESCO’s
Directives governing relations between UNESCO and NGOs to be more flexible.
The participation of cultural professional organizations in the convention
development process will be the subject of an upcoming meeting between
a delegation of the International Liaison Committee of Coalitions for
Cultural Diversity and Madame Katerina Stenou, Director of the Division
of Cultural Policies and Intercultural Dialogue. The meeting follows
on a letter sent to UNESCO on this question in late January..
Coalition Currents is published by the Secretariat for the International Liaison Committee of Coalitions for Cultural Diversity (ILC). Member Coalitions:
Argentina,
Australia, Burkina Faso,
Canada, Chile, France, Korea, Morocco,
Mexico, New Zealand, Senegal.
154 Laurier Ave. West, Suite 240
Montreal, QUE H2T 2N7
T. (514) 277-2666
F. (514) 277-9994
www.comitedevigilance.org
e-mail:
Editor:
Jim McKee
Contributors in this issue:
Robert Pilon, Bruno Bettati,
Mélanie
Marron, Sylvie Riendeau
Interested in bringing organizations representing cultural professionals in your country together in a coalition for cultural diversity?
For
assistance, contact the Secretariat of the International Liaison Committee
of Coalitions for Cultural Diversity:
mckee@cdc-ccd.org.