do we need oligopolistic control?
- Chapter 1 – 1 January 1985: from Culture to Trade
- Unesco – WTO
- Why should we have cultural conglomerates?
- The human right of access
- Chapter 2 – WTO – no safe haven for culture
- Preliminary skirmishes
- WTO: only a commercial perspective
- Paragraaf 8
- Paragraaf 9
- Paragraaf 10
- Paragraaf 11
- Paragraaf 12
- Paragraaf 13
- Paragraaf 14
- Paragraaf 15
- Paragraaf 16
- Paragraaf 17
- Paragraaf 18
- Paragraaf 19
- Paragraaf 20
- Paragraaf 21
- Paragraaf 22
- Paragraaf 23
- Paragraaf 24
- Paragraaf 25
- Paragraaf 26
- Paragraaf 27
- Paragraaf 28
- Paragraaf 29
- Paragraaf 30
Most of the rumblings around the World Trade Organisation (WTO) have been linked to questions on the divide between rich and poor countries, agriculture, health and the pharmaceutical industries. In Seattle, Cancún and all these other cities where the present economic globalisation was contested, cultural movements were in the opinion of the public, remarkably invisible. Therefore, it might be surprising to know that the cultural sectors in our societies have set a far reaching proposal on the agenda that could contribute to the weakening of the WTO system: the establishment of a Convention on Cultural Diversity. The purpose of such a Convention is that culture must be freed from the liberalising grip of the world trade system. It should strengthen a countries sovereign right to maintain and install all those measures they feel appropriate for the protection and the promotion of cultural diversity within their society and in their relationships with other countries too. To reach this ideal, serious juridical pitfalls should be overcome, not to mention fierce political struggles.
This Convention, once ratified and signed by a substantial number of countries, must shield them from trade retaliations because of their cultural policies that may include subsidy systems, preferential tax treatments for domestic cultural initiatives, ownership and content regulations, and regulations that would make cultural industries publicly accountable. In the present economically dominated world order all kinds of protective measures have been considered as distortions of the glorified free trade and are therefore meant to be abolished. This is also the purpose of the new round of trade negotiations within WTO (the so-called Doha Round) that was started in 2001. Cultural conglomerates wanting to attain even more exhibition space and selling points world-wide than they have already, press hard to make countries open their cultural markets completely and remove all protective measures that stand in their way.
However, if ownership and decision-making concerning cultural life is being controlled in a substantial manner by just a few cultural industries worldwide, then fundamental human rights and democracy are in danger. Human communication, expressed in all different forms of the arts, and the access to its means of production and distribution, should be as free and diverse as possible and should in no way be controlled by a few forces that dominate cultural markets in all corners of the world. This is about to happen. This book is about why there is a need for a Convention on Cultural Diversity (chapter 1); why the WTO is not an appropriate place for the protection and promotion of cultural diversities (chapter 2); and what such a Convention should look like (chapter 3).
If its goal is to strengthen countries’ rights to regulate their cultural domain in favour of cultural diversity, then an important topic should be: what appropriate kinds of regulations are effective, flexible, acceptable, understandable and convincing? A substantial part of the book, chapter 4, discusses this complicated topic and illustrates it with many examples of ownership and content regulations, from all fields of the arts, and from as many countries in the world as possible. We should get a better grip on understanding how to combine the freedom of cultural communication with implementing regulatory systems in favour of cultural diversity, and not be hindered by any trade retaliations or by cultural industries that occupy a too large a share of the cultural market or limit the cultural offer to stars, bestsellers and blockbusters.
Cultural diversity is the central concept of the proposed Convention, and a goal for cultural life, wheresoever in the world. By promoting this diversity the focus is on what we commonly call the arts. Of course, artistic expressions have impact on and reflect the broad way of life (which would be covered by the broad anthropological concept of culture), and are crucial in how we define and develop our identities. Nevertheless, the world of the arts is a significant and decisive segment of specific human communication in all societies. Here deeply felt feelings are expressed. It includes all forms of communication that have an aesthetic aspect; expressed in film, theatre, music, dance, opera, musicals, soaps, shows, pornography, design, visual arts, novels, poems and all different derived forms; exhibited in many distinguished genres; making noise or inviting silent reflection; produced and distributed on a small or a large scale; attracting and entertaining massive audiences and buyers or only modest groups of devotees; embodied in material, audiovisual or digital substances; ritualised, secularised, or commercialised.
Thus, speaking about the broad field of the arts as it functions in our societies, a distinction between culture and entertainment is not relevant. The scale of the production and distribution of films, books, music, theatre performances, design and visual arts (whether in the material, audiovisual or digital world) is relevant as a distinguishing criterion for inclusion or exclusion in the concept of cultural life. Indeed, some forms of artistic expression are more entertaining, and others invite calm reflection, or do both. However, such kinds of distinctions (and there are many more to make: a work may, for instance, be more traditional or more experimental) do not relate to the size of production, distribution and promotion. Artistic expressions created, produced, distributed, promoted and received on a mass scale belong to the cultural field of a society as much as the music, films, books, et cetera, that have a smaller scale.
It is important to be aware that artistic expressions in different cultures present themselves in diverse ways; they may have distinct ways of presentation, entrepreneurial infrastructures, meanings, financial underpinnings, artistic professions, attentiveness of audiences, and many other kinds of struggles and contradictions. We should not forget that artistic fields are often symbolic battlegrounds about, for instance, what sounds are important and are organised for maximum attention, what words are terrible and should be suppressed, and what kinds of images are absolutely powerful and seduce until the magic has been broken. It is a continuous hegemonic struggle. But this struggle concerns all artistic expressions, whether they have been produced, distributed and promoted on a huge or a small scale. This fight includes moral, aesthetic, social, legal and economic aspects.
Although it may be confusing and conflicting it is exactly this multitude of artistic expressions that should have the right to exist, with its own conditions, and certainly not be organised by just a few enterprises. It differs in any society (whether geographically destined or digitally constituted). Of course, artists and their intermediaries should be able to make a living, and that is the entrepreneurial side of their work. However, the social domain that concerns the freedom of communication should not be taken over completely by commercial forces.
The second word in the concept “cultural diversity” (from a democratic perspective) concerns not only the much-desired diversity of artistic expressions (the content) and occasions for cultural communication. It is just as important that there are many owners of the means of production and distribution and many decision-makers concerning the artistic communication. A Convention on Cultural Diversity would strengthen, one would hope, the national states’ competence to make sure that this can be realised. It is not about excluding works of art and entertainment from the cultural market; it is about guaranteeing that audiences may be confronted with the broad range of options that exist and, then, make their choice.
Mid October 2003 the General Conference of Unesco unanimously adopted a resolution mandating its director-general to develop, in two years time, a preliminary draft Convention on protecting cultural content and artistic expression. In chapter 3 we will see that a couple of drafts for such a Convention exist already, which may speed up the process within Unesco. Nevertheless within this unanimity, the United States (until recently still in Unesco; see chapter 1) made clear that, for them, culture is a product like any other, and therefore a new international legally binding instrument for culture is superfluous and makes no sense. However, representatives of most other countries spoke passionately and with great force in favour of such a Convention. This may not be surprising because people are fighting for their identities. These contradictory viewpoints between the US and nearly all the rest of the world will take Unesco, within the next few years, into a decisive battleground on the fundamental question of whether artistic expression will be a trade only product, or whether other values will mitigate the huge commercial interests that narrow diversity and open access to the tools of cultural communication.
Already world-wide there are quite a lot of people involved in pushing the idea of a Convention on Cultural Diversity and making the analytical effort to formulate what it should look like while trying to solve the numerous contradictions and near impossibilities that belong to such an immense project. It is a pleasure for me to have got to know several of them. I have only been able to design this booklet Artistic Expression in a Corporate World due to the excellent preceding research (see the bibliography). I would like to mention specifically the work of Gillian Doyle, and of Ben Goldsmith, Stuart Cunningham and their research partners, who have written extensively on regulatory systems. I had the pleasure of interviewing Ivan Bernier, Peter Grant, Garry Neil, and Yvon Thiec for this book. The International Network for Cultural Diversity is already, and has been for many years, an excellent breeding ground for the development of my thinking about arts in the global context. The Research Group Arts and Economics of the Utrecht School of the Arts is a more than welcome home from where I visit the world and its arts, and my colleague Giep Hagoort in this Research Group continues to inspire. Johanna Damm, Lisa Kölker, and Alies Maclean gave me very welcome logistical and research support.
On 25, 26 and 27 September 2003 I had the opportunity to invite more than twenty researchers and cultural activists from all parts of the world to a working conference Regulating in Favour of Cultural Diversity (which is the basis for chapter 4) in the Cultural Centre De Balie in Amsterdam, organized by Eric Kluitenberg and Liedewij Loorbach. The conference was supported by the Dutch development organization Hivos. The participants of the conference were: Jeebesch Bagchi (India), Leonardo Brant (Brazil), Suzanne Burke (Trinidad and Tobago), Mariétou Diongue Diop (Senegal), Gillian Doyle (Scotland), Fernando Duran Ayanegui (Costa Rica), Ben Goldsmith (Australia), Mike van Graan (South Africa), Nilanjana Gupta (India), Souheil Houissa (Tunisia), Jane Kelsey (New Zealand), Garry Neil (Canada), Nina Obuljen (Croatia), K.S. Park (Korea), Paul van Paaschen (the Netherlands), Caroline Pauwels (Belgium), Alinah Segobye (Botswana), Rafael Segovia (Mexico), Josh Silver (United States), Yvon Thiec (France), Inge van der Vlies (the Netherlands), Roger Wallis (Sweden), Karel van Wolferen (the Netherlands), and Gina Yu (Korea). The rapporteur of this conference was Barbara Murray; her observations helped me to formulate certain issues more precisely than otherwise would have been possible. The draft of this booklet was read more than carefully by Max Fuchs, Mike van Graan, Christophe Germann, Lisa Kölker, Nina Obuljen, and Verena Wiedemann.
I feel indebted by the attention all of them have given to this project and very honoured by their continuing warm friendship.
Chapter 1 – 1 January 1985: from Culture to Trade
Unesco – WTO
The 1st of January 1985 is a remarkable day. It is one of those moments in history in which the symbolic clinching of a specific development can be observed. What happened on this New Years Day? It was the moment that the United States of America left Unesco, followed later by the United Kingdom and Singapore. (Preston 1989). It was not just the leaving of an organisation. It was the symbolic expression of the wish of the US to get rid of all kinds of measures that were intended to protect and to promote local cultural life wherever in the world, and to consider cultural expressions as commercial products only, whose trade should take place without constraints.
Around 1960 many former colonies became independent. Soon they discovered that this independence was relative, especially concerning information and culture. The place to discuss this imbalance between the rich and the poor countries was evidently Unesco, the United Nations’ cultural organisation. Three demands emerged in the 1970s: ‘greater variety in sources of information, less monopolisation of the forms of cultural expression, and preservation of some national cultural space from the pervasive commercialisation of Western cultural outpourings.’ (Schiller 1989: 142). The desire to change the cultural and communication relations throughout the world became a movement that was called the New World Information and Communication Order (NWICO).
After many conferences and declarations on this topic Unesco asked for a report to investigate what this new order should look like. The Commission, presided by the Irish law scholar Sean MacBride came out with a book, entitled Many Voices, One World. Towards a more just and a more efficient world information and communication order. (MacBride 1980). One of the recommendations (number 58) claims that concerning culture and information effective legal instruments should be designed to: ‘(a) limit the process of concentration and monopolisation; (b) circumscribe the action of trans-nationals by requiring that they with specific criteria and conditions defined by national legislation and development policies; (c) reverse trends to reduce the number of decision-makers at a time when the media’s public is growing larger and the impact of communication is increasing; (d) reduce the influence of advertising upon editorial policy and broadcast programming; (e) seek and improve models which would ensure greater independence and autonomy of the media concerning their management and editorial policy, whether these media are under private, public or government ownership.’ (MacBride 1980: 266).
Unesco was not allowed the time to make more concrete, and formulate, and possibly encourage the implementation of such legal instruments that would favour what we would nowadays call cultural diversity. From the end of the 1970s on the US did two things. First, it fulminated against the idea that information and cultural policies would be designed that would hinder the so-called “free flow of information”. Of course, freedom of expression is an important value, as long as it is a freedom for everybody to communicate. The ‘free flow of information’ principle, however, mixed up economic and cultural freedom. The economic freedom might result in the extremely strong market positions of just a few cultural conglomerates that push aside the production, distribution, promotion, and reception opportunities of many other different cultural initiatives. This is what was happening in the 1970s and the newly independent countries suffered the most from this ‘free flow of information’ principle and practice.
The idea of a New World Information and Communication Order tried to reverse this trend. The demands became clear, and it was time to take the next step, to formulate concrete policies on a global scale; the place to do so was within Unesco. The development of alternatives for the ‘free flow’ principle and practice is exactly what the US strongly opposed, and in the end this cultural superpower left Unesco. We write the 1st January 1985. This was the deathblow of the New World Information and Communication Order.
The United States did a second thing at the same time as it was preparing its withdrawal from Unesco. It had another new world order in mind, a new world order of ‘free markets’ economics. Jerry Mander writes that this neoliberal agenda would oblige countries, for instance, to open their markets to foreign trade and investment without requiring majority local ownership; eliminating all tariff barriers. It would severely reduce government spending, especially in areas of services to the poor; convert small-scale-self-sufficient family farming to high-tech, pesticide-intensive agribusiness that produces one-crop export commodities such as coffee and cattle. And it would demonstrate an unwavering dedication to clearing the last forests, mining the last minerals, diverting and damming the last rivers, and getting native peoples off their lands and resources by any means necessary. (Mander 1993: 19).
The moment that Unesco became toothless, a new round of negotiations inside GATT, the Uruguay Round, started. It had trade liberalisation as its main aim more than ever before, resulting in the establishment of the WTO in 1995, with some new treaties, like GATS (the General Agreement on Trade and Services) and TRIPs (the agreement on Trade Related Aspects of Intellectual Property Rights). In 1993 Martin Khor foresaw that this liberalisation would accelerate the evolution of monocultures. Governments would find it increasingly difficult to regulate or prevent cultural and service imports. ‘Since the largest and most powerful enterprises belong to the North, the already rapid spread of modern Western-originating culture will be accelerated even more. Cultural diversity would thus be rapidly eroded.’ (1993: 104). A decade later we may conclude that this is true and not true. The cultural conglomerization is progressing, month after month. At the same time multitudes of cultural initiatives of artists, associations and small enterprises take place, everywhere in the world, day after day. (Smiers 2003: 88-102).
Thus the challenge is to give those initiatives ample space and opportunity, because this diversity is what we need from a democratic perspective. Second, the presence and power of cultural conglomerates should be reduced substantially. Otherwise, it becomes nearly impossible to get access to the main channels of cultural communication – which is a basic human right. (See later in this chapter).
The issue of how to deal with the free trade negotiations that would affect cultural diversity came up in Canada first. Around 1986 this country became involved in preparatory discussions with the US about liberalising their markets for each other. It quickly became clear at the political level in Canada that there was to be an impact on the cultural sovereignty of the country. This became a serious political issue, perhaps strangely enough more in Ontario than in Québec. In Ontario many people were concerned about the cultural aspect because they are Anglophone and were much more invaded by American programmes than was the case in Francophone Québec. There, for instance, the most popular television programmes were made in Québec, while in the rest of Canada nine out of ten programmes came from the United States. Nevertheless, the free trade agreement between Canada and the US was sealed. However, the awareness that trade liberalisation might be a danger for the development of cultural diversity was implanted in the consciousness of many people in Canada.
Meanwhile, the discussions on furthering trade liberalisation as well as culture within the Uruguay Round went on. This was scarcely noticed in Europe. Most Third World countries had to cope with their defeat in Unesco and with the debt burdens that kept them busy and made them politically ineffective on a global scale. Around 1989 Canada started to demand that culture should be excluded from the discussions within the Uruguay Round, without getting much support from other countries. Hardly anybody, for instance in Europe, could imagine that culture would be embedded in a free trade agreement, and thus nobody cared. This changed at the end of 1992. Mainly in France the awareness grew that liberalising culture within the newly established services agreement (GATS) would have serious consequences for French culture, and specifically for French film making. This mobilised many artists and others who were concerned about the survival of French cultural life. From then on the process swiftly progressed. Action groups published a two page advertisement against harbouring culture in GATS on 29 September 1993 in five major European newspapers: le Monde in France, the Independent in the UK, Le Soir in Belgium, the Frankfurter Allgemeine in Germany and El Pais in Spain. There was also a big advertisement in the Odeon theatre in Paris.
All of a sudden Europe entered into a huge cultural conflict with the US. Jack Valenti, the president of the Movie Picture Association of America claimed that under the pretext of culture Europe wished to protect its economic interests concerning film. This complete lack of understanding of the cultural values many people in Europe like to defend added fuel to the fire. Artists demanded that the European Commission propose a cultural specificity clause that would, amongst others, permit the continuance and extension of public aid and operational subsidies, allow screen time to be reserved for indigenous production of films and TV programmes, and permit the regulation of existing and future broadcasting technologies and transmission technologies. However, the Commission did not wish to push it that far, in order to avoid the failure of the whole negotiation process of the Uruguay Round (which had to be finished on 15 December 1993).
In the last days and nights before 15 December 1993 the US and the European Union reached an agreement that culture would be regarded as one of the services under the new GATS agreement within WTO. However, the European Union did not make commitments concerning culture, along with most other nations, with the notable exception of New Zealand. This meant that culture stayed a blank page within GATS for most countries. In France, and some other countries, this blank page was called the cultural exemption. Blank page means, however, no more than: a country (or, in the case of Europe, for instance, the whole European Union) may continue to make its regulations in favour of cultural diversity, as it considers appropriate.
We must note that the use of the concept of “cultural exemption” is a misunderstanding. It must be said, as a marketing term it functioned very well for a while, expressing the wish that culture should not belong to the field of trade and should be exempted from the liberalisation in this field. But the reality is different. Culture is not exempted from the free trade agreement. In 1993 the European Union and most other countries agreed with the US that culture is an integral part of GATS which means that it is also subject to the drive of the WTO to liberalise markets continuously. Except that Europe in 1993, like many other countries, would not make commitments to liberalise its cultural markets more than was already the case,
The idea that a cultural exemption exists is thus a dream and does not cover reality. In the GATS context culture is less protected against the free trade wind than many people would like to think. And now, it is extremely complicated to get culture out of the free trade only context of WTO and its services agreement, GATS. This is the challenge to be discussed in chapter 3.
Why should we have cultural conglomerates?
Meanwhile, in the decade following 1993 multiple mergers of cultural conglomerates have taken place that has brought several cultural enterprises into the hands of companies that have never been active in the cultural sectors before. These companies are horizontally and vertically integrated and linked by cross-ownerships. Robert McChesney notes that two dozen or so firms control the overwhelming percentage of movies, TV shows, cable systems, books, magazines, newspapers, billboards, music and TV networks ‘that constitute the media culture that occupies one-half of the average American’s life. It is an extraordinary degree of economic and social power in very few hands.’ (2002: 49). A film, for instance, is not merely a film anymore. ‘The great profit in the media today comes from taking a movie or TV show and milking it for maximum return through spin-off books, CDs, video games, and merchandise. Hence it is virtually impossible to compete as a “stand-alone” movie studio, TV network, or music company, when one’s competitors are part of vast empires. This has fuelled the massive conglomeration rush of the past fifteen years.’ (Ibid.). Therefore Benjamin Barber claims that with ‘a few conglomerates controlling what is created, who distributes it, where it is shown, and how it is subsequently licensed for further use, the very idea of a genuinely competitive market place in ideas or images disappears . . .’ (1996: 89).
Besides these super-conglomerates, there are fifty or so second tier giants that are national or regional powerhouses, like Mexico’s Televisa, Brazil’s Globo, Argentina’s Clara, Venezuela’s Cisneros Group, and Berlusconi’s Mediaset in Italy. ‘These firms tend to dominate their own national and media markets, which have been experiencing rapid consolidation as well. They have extensive ties and joint-ventures with the largest media Transnational Corporations, as well as with Wall Street investment banks.’ Their political influence is abundant. Gillian Doyle remarks, that ‘the Berlusconi case provides compelling evidence of a causal connection between concentrated media ownership and undesirable narrowing in the diversity of political opinions available to the public via the media.’ (2002: 20).
An interesting question is ‘what gains arise when media firms embark on strategies of enlargement and cross-sectoral expansion?’ (Doyle 2002: 45). This is a serious issue, because ‘arguments based around “economic” concerns have gained increased status in debates about media ownership policy in recent years. Gillian Doyle judges it ‘important to investigate what, if any, economic benefits or costs may be associated with enlarged and diversified firms. One of the worrying conclusions that emerges from studying recent changes in media ownership policy in the UK and across Europe is that relatively little independent investigation or systematic analysis of the consequences of these changes has been carried out by policy-makers.’ (2002: 172). She claims, that ‘the general absence of any robust body of independent research into the economic implications of deregulating media ownership has greatly favoured corporate interests. It has meant that, in general, large media firms’ own interpretations of technological and market developments, and of the economic implications of these developments, have been allowed to dominate the policy agenda in the UK and elsewhere in Europe without any attempt at systematic empirical corroboration.’ (2002: 173).
Without any doubt such research would show that cultural conglomerates are rather inefficiently operating enterprises. Their financial gains depend upon an extremely limited number of big successes, while most of what they produce and distribute is loosing even its initial investments. They are not merging endlessly because of their strength, but it is their financial and organisational catastrophic position that drives them to eating up even bigger slices of the cultural market. This is a synergy that has been born out of need, while many banks do hope to see a return on the invested money.
Will Hutton makes Gillian Doyle’s amazement concrete with an example. ‘The telecoms companies wanted less regulation, they wanted the right to build their own self-standing networks and they wanted their allocations on the terrestrial spectrum to be free as possible from public service obligations; long-distance carriers wanted to enter local markets; all wanted cross-ownership rules relaxed. All that they wanted, they got.’ (2002: 204). And then the dot-com bubble burst, ‘followed inevitably by the end of the telecoms boom – in which trillions of dollars were at stake. We are left with vast overcapacity, threatened bankruptcies and a massive debt overhang in which only a fraction of the capital invested is remotely recoverable.’ The conclusion of these failed success stories? Will Hutton: ‘And despite it all, no country can boast a complete broadband cable network. If the public sector in the leading industrial countries had spent a fraction of the lost cash in each building one public network, the spread of the information economy would have been faster by years. That was forbidden by the conservative orthodoxy.’ (2002: 206,7).
His observation may help us to be less reserved when in chapter 4 we propose regulations in favour of the protection and promotion of cultural diversity. We should take into account that there is no objective requirement as to why we should have such huge cultural conglomerates that dominate nearly all the cultural fields in our societies.
 Robert McChesney, The New Global Media. It’s a Small World of Big Conglomerates, The Nation, November 1999.
The human right of access
Besides this economic waste, the question of media ownership has a decisive human rights aspect, because it concerns the right of access to the means of communication which is important as this allows individual people and communities to develop their own identity. Having a large number of owners of cultural enterprises is important for the democratic substance of any society.
There are two articles in the Universal Declaration of Human Rights concerning every person’s rights of access to the means of communication, and the fields of the arts. Article 19 says: ‘Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.’ If everyone has this right, it should not be hindered by dominant forces that substantially control the means of cultural communication. Opinions and ideas, as mentioned in the article, are plural and should have plural sources of origin. There should be “any media” indeed where people can seek, receive and impart information, including artistic expressions, and not some media controlled by a few owners. This article speaks about, what we call nowadays, the right of access to the channels of communication for as many people as possible, and not just for a handful of cultural conglomerates.
The first clause of article 27 focuses on the cultural circumstances of the people’s lives. ‘Everyone has the right to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancements and its benefits.’ The central concept in this phrase is the word “community”. Thanks to the weird coalition of Thatcher and postmodernists the concept of “community” has become threatened over the last few decades and has been replaced by the ideology that we are isolated individuals who strive only for our own interests. But what about refugees for instance? For them, a safe haven is a community somewhere in the world that gives them the security that their own society does not provide. (Smiers 2003: 82). Of course, there are many definitions and practices of communities, but it always concerns the exchange of opinions and feelings, expressed in artistic forms as well. The artistic enjoyment tells people who they are, what is their common pleasure, what are contradictory feelings and what they are dreaming of; it gives them their identity. The cultural life of a community should not be taken over by mainly entrepreneurs who dominate culture worldwide, and who do not participate in the common daily life of a society. For the present, it is justified to compare cultural industries with absent landlords. We should re-invent the value and the practice of communities, and give people back the active right to participate in the cultural life of their communities. Referring to article 19, indeed, this should be regardless of frontiers.
The question of ownership concerns democracy as well. If the essence of democracy is that many voices can express themselves and can be heard, then this plurality should also be the characteristic of the ownership of the means of cultural communication. Nobody and no corporation should be entitled to be the main or the only organiser of the cultural life in any society. This is the basic principle. In chapter 4 the discussion will be about how to regulate the cultural market in order to reach this plurality and to avoid oligopolistic ownership relations.
Because of the human rights aspect of cultural communication care and attention are needed so that diversity can flourish. The character of the production, distribution and promotion of cultural creations means that works of art should be treated in ways other than just ordinary commodities. Cultural goods and services communicate ideas, and are less utilitarian than most commodities. Mostly there is no assembly line. Cultural creations are expensive one-time processes that then can be stored cheaply, duplicated and delivered. The marginal cost of unit of product is insignificant. The demand for cultural works is difficult to estimate in advance. The substitutability with other products is limited; cultural creations are more or less unique. Most products have a time line of demand that continues indefinitely until the next product cycle. In cultural matters the demand may fall off sharply after the introduction of the artistic work and the next product replaces it, and this may be measured in weeks or months. The pricing of cultural creations is highly discriminatory, dependent upon fame, nature of use, or character of the market. The cultural product can be priced as low as required or as high as the market can bear. Most works of art do not end by its consumption, they are endlessly available; that gives them the status of being public goods too. The promotion of a work of art must be intense at the time of the introduction while other commodities demand advertising over many years.
In any society the world of all different artistic creations is a specific sector. Something must be done to ensure the flourishing of diversity in this field of cultural communication. Cultural diversity deserves some forms of regulation. In the context of globalisation and trade liberalisation, there is a need to recognise the particular character of cultural goods and services and to what extent they contribute to the development of social life in any given society. This brings us unavoidably to the national states, because they are the only entities in the world that (should) have the competence and power to structure markets and economic practices. National states should be allowed to take the measures they feel are necessary to protect and to promote cultural diversity, in view of their own circumstances and conditions.
It should be recognised, however, that several national states are not the benign institutes that one hopes for. The suppressing practices of such states are completely against the idea of cultural diversity and what it stands for. As we might see in chapter 3, a highly charged debate is whether national states, signing a Convention on Cultural Diversity, should be obliged to install cultural policies that protect and promote the development of cultural diversity, and refrain from censorship and other forms of suppression of artistic expression.
A second observation concerning national states must be made as well. Only a few of them possess the capacity to develop on their own the kinds of artistic expressions that demand the investment of substantial amounts of money and technological and organizational infrastructures to produce and distribute them. This makes these countries an open goal for the products of cultural industries from abroad. Of course, they have an abundance of creative artists. When the equipment they need is very cheap, diversity can flourish in the appropriate outlets. But, when the need for technical and infrastructural resources is greater – as is the case, for instance for audiovisual products – then these countries face insurmountable problems, financially and in the field of building cultural infrastructures.
What should be done? In order to make them independent from the Western cultural industries a Cultural Development Fund should be established. Western countries should feel obliged to contribute considerably to such a Fund that should be administered in the framework of Unesco, together with the supervision of the Convention on Cultural Diversity. Artists in the poorer parts of the world should have the chance to produce works of art and entertainment that can compete in audience attention with the products of the cultural giants, without imitating them.
The wish for modest and efficient forms of regulations must be seen in the context of a greater movement to make systems of checks and balances more respected again. The Human Development Report 1999 speaks about governance. ‘Governance does not mean more government. It means the framework of rules, institutions and established practices that set limits and give incentives for the behaviour of individuals, organizations and firms. Without strong governance, the dangers of global conflicts could be a reality of the 21st century – trade wars promoting national and corporate interests, uncontrolled volatility setting off civil conflicts, untamed global crime infecting safe neighbourhoods and criminalizing politics, business and the police.’ (Human Development Report 1999: 8).
In this context Gillian Doyle hopes that at some stage in the future ‘regulation of media ownership will become unnecessary. As barriers for market entry diminish and as more and more new avenues for distribution of media become available, it is suggested that a diversity of political and cultural representations will flourish without any need for special ownership restrictions.’ (2002: 178). She is aware, however, that at the present moment safeguarding pluralism implies a need for restrictions ‘which would eliminate undesirable concentrations of media power . . .’ (2002: 157).
The challenging question (that is to be discussed in the next chapter) is whether WTO rulings outlaw the possibility of installing the necessary regulations for the sustainment of the development of cultural diversity, concerning all the diversified fields of the arts.
 This enumeration is based on the paper by Peter S. Grant at the Deuxième Rencontres Internationales des organisations professionnelles de la culture; une manifestation organisée par le Comité de Vigilance pour la diversité culturelle, Paris, 2,3,4 February 2003.
Chapter 2. WTO – No safe haven for culture
At first glance the impression may be that there should not be too many worries about the possible negative implications of GATS for cultural diversity. Most countries in the world did not make any commitments in 1993 regarding culture and specifically not for the audiovisual field. This means that their hands are not tied and they can make as many regulations for cultural diversity as they may wish to do so, according to the basic principles of GATS. The only real demand is to be completely transparent about existing regulations like: subsidy systems, content and ownership rules, and other facilities in favour of the production, distribution and promotion of the arts in all its categories.
Nevertheless, there is reason not to be complacent considering what is at stake at the beginning of the twenty first century within WTO. This is the topic of this chapter. During the last months of negotiations on trade liberalization, in 1993 during the Uruguay Round, the United States attacked Europe furiously on cultural matters. Specifically the president of the Movie Picture Association of America, Jack Valenti, pretended, as mentioned before, that the European desire to keep culture out of the free trade realm was nothing less than a cover up for protecting the economic interests of European cultural industries. His blunt remarks worked counterproductively for the Americans because it mobilized artists all over Europe in the defence of the right to protect cultural values. As we have seen in chapter 1, the European Union and most other states, did not make commitments concerning culture, but the American gain was that culture became included in the framework of the trade regime. That is a huge gain, as we will see in chapter 3. Several years after 1993 we may wonder whether the apparently over-simplified statements by Jack Valenti and by other American officials were so counterproductive after all. Piloting culture into the port of the WTO was a real victory for the US cultural industries and, it must be said, for their European and Japanese counterparts as well.
In November 2001 a new round of negotiations with the purpose of furthering trade liberalization started in Doha, and is due to end in 2005. After the failure – or success? – of Cancún this date is no longer a certainty. It may not be surprising that the issue of culture and trade is on the agenda again. Some countries have tabled so called communications on this issue at WTO, with Canada and the US at both ends of the scale. The Canadian communication stipulates, that ‘GATS cannot be interpreted as requiring governments to privatise or to deregulate any services. We recognize the right of individual countries to maintain public services in sectors of their choice. This is not a matter for the GATS negotiations.’ It is clear that Canada will not make any commitments that restrict its ability to achieve its cultural policy objectives ‘until a new international instrument, designed specifically to safeguard the right of countries to promote and preserve their cultural diversity, can be established.’
The United States leaves behind what it calls the all-or-nothing approach from 1993. ‘Some argue as if the only available options were to exclude culture from the WTO or to liberalize completely all aspects of audiovisual and related services.’ Such stark options obscure, according to the US, some relevant facts. For instance, it hides the fact that ‘business and regulatory considerations affect the ability to make and distribute audiovisual products, both to domestic and foreign audiences. Creating audiovisual content is costly, and commercial success is uncertain. Access to the international market is necessary to help recoup costs. Predictable and clearly defined trade rules will foster international exhibition and distribution opportunities and provide commercial benefits that audiovisual providers must have to continue their artistic endeavours.’
The conclusion in the US communication is that GATS is a very flexible treaty that is open to making full or partial commitments. However, especially ‘in the light of the quantum increase in exhibition possibilities available in today’s digital environment, it is quite possible to enhance one’s cultural identity and to make trade in audiovisual service more transparent, predictable, and open.’ The conclusion is that the ‘choices are not, nor have they ever been, a choice between promoting and preserving a nation’s cultural identity and liberalizing trade in audiovisual services.’
Let’s go back a moment to the remark in the American communication that creating audiovisual content is costly and that access to the international market is necessary to help recoup costs. But, there are different kinds of “costly”. A film, for instance, can be made for 2 or 200 million dollars or euros. By definition it is not true that the higher the amount of money the better the film. A relevant question therefore is why audiovisual “content” (at present in the hands of cultural conglomerates) should be as costly as it is. If we accept that this high price is not a “necessity” (and it is not, because, for instance magnificent films can be made for a tiny part of the price of blockbusters), then there would be no need to have access to international markets to help recoup costs, and certainly there would be no need to push other creations from the cultural market. This would fundamentally change the debate on liberalizing cultural markets, or not, The exaggerated and unnecessary high production, distribution and promotion costs for cultural “products” do not provide any justification for the worldwide domination of the cultural place.
 WTO, Council on Trade in Services, Communication from Canada, Initial Canadian Negotiating Proposals, 14 March 2001: Doc. S/CSS/W/46.
 WTO, Council for Trade in Services, Communication from the United States, Audiovisual and Related Services, 18 December 2000: Doc.S/CSS/W/21.
WTO: only a commercial perspective
If we follow the United States’ arguments, the service agreement of WTO, GATS, is a very open treaty. A country can make commitments to liberalize its trade in culture, but is not obliged to do so. GATS in itself does not hinder individual countries from regulating cultural markets according to their wish.
This is true, and not true. Why this contradiction? Presently, GATS does not force countries to make liberalizing commitments concerning culture. But this open attitude is not the purpose of the whole of the WTO system. WTO is a commercially driven organisation whose main goal is to do away with trade restraints as quickly as possible. All social sectors should be liberalised, including education, water, the environment, transport, as well as culture. The US and some other countries consider it, for instance, unacceptable that in many parts of the world people like to keep their borders closed to genetically manipulated food. From a commercial perspective this distorts trade indeed. However, the possibility that other values may exist are absent in a trade only regime.
What are the major consequences of such a purely commercial regime?
* A distinction of the WTO treaties is that they imply National Treatment and the principle of the Most Favoured Nation. National Treatment means that enterprises from all countries have the same rights as enterprises from the own country. In the cultural field this has the consequence, for instance, that the national or regional subsidy systems or other support measures for the arts must be open for everybody from all over the world. Evidently, this is the end of such kinds of support measures (that are not meant to be for the whole planet) and they are the deathblow for many artistic initiatives in the country or region where the support systems for the arts have to be abolished.
The principle of the Most Favoured Nation implies that a commitment made to a specific country should also apply to all other countries. For the cultural field this is harmful too, because it makes co-production agreements between specific countries no longer possible. That is a pity. Many artists thrive by working together with specific artists in other countries, and this may result in formal cultural collaboration agreements between their countries. Such fruitful forms of working together in the cultural field are not tolerated by WTO, or in any case not the systems that support them. The ideology of WTO turns National Treatment and the Most Favoured Nation principle into to holy cows that do not reflect the needs of the development of cultural diversity.
* Within WTO the risk remains that cultural considerations will be addressed from a strictly trade perspective. In Doha an agreement was reached defining that the negotiations will commence with an examination of “trade distorting practices”. The US maintains, for example as said before, that cultural subsidies, public service institutions like public broadcasting and other measures to regulate the cultural market in favour of cultural diversity are “trade distorting” and this may provide an avenue for them to claim the abolishment of such measures. This is a serious and dangerous issue because it may oblige countries to give up all the policy tools they have developed to protect and to promote the development of cultural diversity in their part of the world. Obviously, the US also puts pressure on countries, bilaterally and multilaterally, to make commitments to liberalise their cultural markets even more than is currently the case. Thus, the number of trade making commitments will only increase with time and the capacity of states to take measures for their own needs and specific situations will be more and more restrained.
* The explicit objective of the ongoing GATS negotiations, given the impetus by the launch of a new comprehensive round of talks at the Doha Ministerial Meeting in November 2001, is to achieve a progressively higher level of liberalization in services trade. (Neil 2002). The fact that this is not yet the reality is an inconvenience that should be cleared away as soon as possible. Thus, every country must know that what looks like an open choice is only temporary. The perspective for the time being is that there is first and foremost trade, and maybe some protective measures may be tolerated. By the 1993 decision that culture has become basically a trade issue, it has become part and parcel of the liberalising umbrella of WTO, and the ultimate destiny is that it will be treated exactly like any other goods and services. The intention of WTO is to have new negotiation rounds every five years with the idea of liberalising markets even more, until the moment that all kinds of restrictions have been removed.
Speaking about culture, we must recognise the reality that market forces alone cannot guarantee the maintenance and promotion of diverse cultural expressions and of cultural diversity. Public policy, developed in partnership with civil society and the private sector, is of vital importance to ensure, for instance, the democratic access to the means of cultural communication, and to respect the fundamental human rights, as discussed in the first chapter.
* One of the biggest dangers of culture being within WTO is that it has become an integral part of the negotiating process. It is not excluded from the process of giving and taking. A country that refuses to make commitments in its cultural fields may face sanctions with a refusal to its requests for commitments in many other cases. If you refuse to negotiate on culture, the US will say no to any other requests made for other services. This may tempt a country to give up the right to continue to have its own cultural policies. Such a humiliating situation should never happen. If it is important to protect and to promote the flourishing of cultural diversity, measures regulating the cultural market are necessary to make sure that the market is not dominated by a too small number of large producers and distributors. The right to apply such measures cannot and must not be given up in trade negotiations.
* In the Doha Ministerial Declaration, November 2001, that was the start of a new round of trade liberalisation and consequently of abolishment of protective measures, there is a section about Trade and Investments. Why might this be a threat for cultural diversity? For many years investing enterprises have been used to having free markets throughout the world without being restrained by conditions concerning their investments. In the mid-90s the rich countries have tried to reach this ideal within the context of their association, the OECD, aiming at a Multilateral Agreement on Investments (MAI). Such an agreement would have abolished all kinds of obligations that enterprises would have when they invest in other countries, as well as in poorer parts of the world. Enterprises can hit and run as they like without providing benefits for poor countries, even though it was proposed that countries had to pay enterprises for the “losses” they would suffer from government measures that were considered as detrimental.
Notably in Canada and in France the arts world protested against such a treaty because it would prevent countries from being able to regulate cultural markets in favour of cultural diversity. The link between culture and investments is of course that nearly every cultural activity is related to an investment. MAI intended making countries comply to the wishes of investing enterprises. Due to the protests the preparations for this investment treaty were cancelled.
But not forever. Investors are trying to get such a treaty, that makes them more important than national states, within the WTO framework. Garry Neil sums up what the consequences might be: ‘An investment agreement could force a re-evaluation of a significant number of cultural policies, including: prohibitions, limits or restrictions on foreign ownership in the cultural industries; public service broadcasters and other public institutions, since these might be perceived as unfair competitors for private foreign investors; regulations that discriminate against foreign broadcasting or publishing interests; co-production treaties; even financial subsidy programs if these discriminate against foreign firms or individuals. Should the agreement include an investor-state dispute settlement system that permits individual firms to sue foreign governments, the potential challenges by multinational firms in the entertainment business would be great.’ (Neil 2001).
* It might even follow that a country may claim that another country makes it impossible to harvest copyrights. How could this be the case? The argument might be that a country that regulates its cultural market (for instance by ownership regulations and other measures as will be discussed in chapter 4) makes it impossible for an enterprise from another country to get benefits from exercising their copyrights. Why? The answer will be: these regulations provide artificial limits on how many sales (of music for instance) can be made, and this is a distortion of the market place. In any case, this could be the argument.
* In WTO a division has been made between the so-called goods and services, a distinction that does not fit in cultural life as we know it, and that might be harmful for the arts. First there was only GATT (since 1948) that promoted trade liberalisation of goods between the member states. During the Uruguay Round the concept of services was also introduced in order to stimulate freedom of trade in non-tangible products. In the new organisation WTO a new kind of agreement was established, notably on services, called GATS, the General Agreement on Trade and Services, under whose umbrella culture was placed as being services. But are cultural expressions goods or services? Who knows? In trade terms one might say that the work of the author, the painter, the musician or the film distributor is a “service”. ‘But the physical embodiment of the artistic creation can also be viewed as a “good”. A magazine, book, compact disk and painting are all physical objects with mass and texture.’ (Neil 2002).
What about the artistic expressions performed or shown in the digital media? Are they “services” or “goods”? Apparently they are non-tangible. The US claims, however, that digital music or software (also with a cultural content) should be considered as “goods”. One may wonder why the struggle about those distinctions is so sharp. The fact is that under GATT (the “goods” agreement) trade liberalisation has progressed much more than in the sector of the so-called services. Moreover, the way a country commits itself to a trade liberalisation is different under both agreements. Under GATS a country itself makes the decision to make a commitment to a certain opening of its market. Under GATT it is the contrary. There are general measures about the liberalisation of specific goods. A country that does not wish to adhere to this general rule must exempt itself from this ruling, which is much more difficult than in the case of GATS where the commitment is more of a choice.
By pushing the whole digital field into the “goods” sector the US hopes to liberalise this domain completely, preventing this field from being regulated. It looks as though the US will say to Europe and other parts of the world: you may keep the old media, but you should surrender the future to us. This extremely important case may make all aware that culture is not divisible in “goods” and “services”. Artists are always working in different media, old and new alike, and also the results of their work are of different shapes and qualities. To disconnect it in goods and services is not helpful, specifically if the purpose is not to suppress the possibility that the digital field may be regulated in favour of the protection and promotion of cultural diversity.
* Ivan Bernier and Hélène Ruiz Fabri conclude that under the circumstances of economically driven globalisation cultural diversity is threatened, ‘because the original and multiple identities of the groups and societies that make up mankind are being undermined by a trade liberalization process, whose final outcome is hard to predict. The process in question, which is based largely on competition, tends to impose a single commercial mould on the many expectations citizens have in different realms of human activity and fosters new forms of social organisation that call into question not only traditional ways of doing things, but shared values as well.’ (Bernier 2002: 23).
The authors recognize that all national cultures have to adapt over time to a variety of changes, both internal and external. The real problem that the present form of economic globalisation poses for the diversity of cultures ‘is whether the changes it brings about in values, lifestyles and ways of doing things affect our ability to “promote and maintain a pluralistic public space where citizens have access to and can participate in cultural life, which itself is necessary for public life.” (in Raboy 1994: 77). In other words, do such changes affect our ability to maintain distinct cultural expressions?’ (Bernier 2002: 23). Cultural diversity is also threatened, according to Ivan Bernier and Hélène Ruiz Fabri ‘by the impact of trade liberalization on the capacity of states to sustain distinct cultural expressions, since it prevents them from adopting standards that directly or indirectly impede the circulation of cultural goods and services.’ (Ibid.).
They clarify; that these negotiations concern the various types of government intervention commonly employed in the cultural sectors, such as subsidies, quotas, restrictions on foreign investment, regulatory measures, and so forth (see chapter 4). ‘Unfortunately, once a state agrees to stop using one or more of these types of intervention, it cannot go back on its decision. New Zealand found this out recently after making a commitment during the Uruguay Round of negotiations to no longer apply quantitative restrictions in the audiovisual services sector, effectively limiting its leeway solely to subsidies. When it backtracked and announced in its Ministry of Culture’s 2001-2002 activity program that it planned to re-introduce radio and television quotas, the United States soon made it clear that this was no longer possible.’ (Ibid.).
What is the case? New Zealand deregulated its broadcasting sector and listed it as a covered service under the GATS. It is thus constrained from reintroducing quotas, despite a change in government and clear public will to re-regulate the sector. Nearly all printing and publishing companies in New Zealand, as well as the majority of book retail outlets, are owned and controlled by foreign interests. It is now difficult for New Zealand writers to get works published or distributed locally. One may conclude, that foreign dominance threatens local creativity and cultural spontaneity.
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