At the 2001 meeting in Qatar, the World Trade Organization launched a comprehensive new round of trade negotiations, covering issues with potentially serious consequences for cultural policy in many countries. Failure to include language in the Ministerial Declaration acknowledging the importance of promoting cultural diversity will be significant as these critical negotiations reach a climax.

The world’s cultural community must redouble efforts to counter the blind pursuit of a free trade agenda by trade officials. We must be vigilant of our trade officials and the WTO. The ability of states to encourage and support their own artists and cultural producers may well be lost in the WTO “Doha Development Agenda.”

Doha Ministerial Declaration

The Declaration is a ten-page document that assumes liberalized trade is positive for all. It outlines an aggressive work program for the WTO and contemplates new negotiations in several key areas. The timetable is unrealistic as it directs negotiations to conclude “not later than 1 January 2005,” although some of the negotiations are not set to begin until after the Fifth Session of the Ministerial Conference, to be convened in Cancun Mexico in September 2003. Previous substantive rounds of negotiations have taken up to a decade to conclude.

Preamble

There is reference in the preamble to a number of key social objectives, including sustainable development, protection of the environment, public health, core labour standards and protection of bio-diversity. But, there is no reference to the importance of promoting and maintaining cultural diversity. Given the broad scope of the new round of negotiations, this failure is significant. Even the failed Seattle declaration contained language on cultural diversity but there was no consideration of such language in Doha.

As a consequence, in the new round of talks, when trade negotiators make the final trade-offs to secure the deal, in what is considered to be a “single undertaking,” or a fully integrated round of negotiations, there is nothing in the official Declaration that can be used to ensure they will look at the potential consequences of decisions for global cultural diversity.

Ongoing Negotiating Agenda

The Declaration outlines a revitalized work program in what has been called the “built-in agenda,” the matters left over from the Uruguay Round that have guided the WTO’s work in the past few years. Under the new work program, negotiations continue in several key fields.

General Agreement on Trade in Services (GATS)

Negotiations have already begun on the basis of agreements reached in Geneva. Requests for commitments were exchanged in June 2002 and initial offers were tabled in March 2003. The cultural community has significant concerns about these negotiations:

• All forms of artistic expression are services as defined by the GATS. While countries may refrain from making commitments in these fields under the bottom-up approach to the talks, pressure can be applied bilaterally and multilaterally to seek such commitments.
• The US and several other states have tabled proposals that audiovisual services should be fully covered by the GATS. Fully half of the requests received by the European Union concern audiovisual services. The EU and others continue to reject efforts to expand the GATS in this sector. Clearly, this will be a major issue in the new round, and with more issues in play overall, the chances of a trade-off increase.
• Proposals have been tabled on other cultural services.
• Proposals on “horizontal issues” can also be anticipated. These are commitments that apply across all services, whether or not a country has agreed to include that sector in its general commitments. This means that such commitments would apply to audiovisual services, publishing, sound recording, visual arts, and other forms of expression even if these sectors are otherwise “exempt” from the disciplines.

Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS)

In the ongoing negotiations the debate on TRIPS is primarily about health issues, medicines and the misuse of the patent system, but copyright issues remain part of the agenda. There are other issues in TRIPS, including the minimal protections provided to individual creators. The cultural community also must consider a potentially serious element of the ongoing discussions:

• With the Doha Declaration, the TRIPS Council is directed to conclude the “modalities” through which “non-violation complaints” can be adjudicated. A “non-violation complaint” is one in which a member country of the WTO can file a complaint against a measure maintained by another member that, while not technically a violation of the TRIPS, nonetheless “impairs” the benefits the other member would reasonably expect to receive. As a consequence of their ownership of copyright, multinational firms may well encourage their governments to challenge national cultural measures because these “impair” the benefits these firms “can reasonably expect” to enjoy under TRIPS provisions.

Electronic Commerce

Discussions on electronic commerce may well touch significant cultural issues. The US has urged that software be covered completely by the various WTO disciplines, effectively prohibiting imposition of regulatory measures and controls. Others point out that the content of some software products is cultural in nature and therefore should not be included as proposed. The US can be expected to argue that the transmission of cultural materials across computer networks is merely e-commerce that should be free of regulations.

New Negotiating Agenda

One of the key areas of dispute in the Doha Agenda is debate around the so-called Singapore issues, the new areas of negotiations demanded by the industrialized nations.

Investment

From the perspective of the cultural community, perhaps the most significant single section of the Doha Declaration is entitled Relationship Between Trade and Investment. It states, “recognizing the case for a multilateral framework to secure transparent, stable and predictable conditions for long-term cross-border investment, particularly foreign direct investment, … we agree that negotiations will take place after the Fifth Session of the Ministerial Conference, on the basis of a decision to be taken, by explicit consensus, at that Session on modalities of negotiations.” While the Declaration does state that negotiations must take account of the “right” of governments to “regulate in the public interest,” this section essentially brings the dramatic rebirth of the failed Multilateral Agreement on Investment (MAI).

The Organization for Economic Cooperation and Development attempted to implement an investment treaty, but it failed in the face of significant opposition. The French government was among those to highlight the negative consequences on culture of the draft proposal. To the extent the outcome of the new WTO negotiations on investment approaches the agreement abandoned by the OECD in 1997, the results could be catastrophic for culture:

• 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 for challenges by multinational firms in the entertainment business would be great.

Interaction Between Trade and Competition Policy

This is another new issue to be negotiated after the Cancun Ministerial Session in 2003. While the negotiating agenda in this area is not yet clear, there are potential consequences for cultural policy:

• Competition policies are used to counter the dominant position of foreign firms in the domestic marketplace. More importantly, with convergence and technological change, these tools could become more significant in the future. If the ability to use competition policy as a cultural policy tool is restricted or compromised by the WTO agreement, an important mechanism to encourage indigenous artists and producers will be lost.

Government Procurement

While the Declaration states “negotiations (on government procurement) shall be limited to the transparency aspects and therefore will not restrict the scope for countries to give preference to domestic supplies and suppliers,” it is useful to recall that TRIPS began as a simple anti-piracy measure. It is possible to create a scenario in which practices of the public service broadcasters and other public cultural institutions could be held to scrutiny under a WTO agreement on government procurement.

WTO Rules

There is agreement to launch negotiations “aimed at clarifying and improving” agreements on subsidies and countervailing measures. Significantly, the negotiations will commence with an examination of “trade distorting practices.” The US maintains that cultural subsidies and other measures are “trade distorting,” and this may provide an avenue for them to pursue such a claim.

This analysis was provided by the International Network for Cultural Diversity
Garry Neil
INCD Coordinator
August 2003

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Click here to download the Cancun Declaration on Cultural Diversity in PDF format.