Trade Negotiations and Trade Negotiations and Culture: What’s at Culture: What’s at Stake? Stake? Ramesh Chaitoo Ramesh Chaitoo Services Trade Specialist, CRNM Services Trade Specialist, CRNM [email protected][email protected]CRNM/TRINNEX Workshop on CRNM/TRINNEX Workshop on The Impact of Trade and Technology on Caribbean Creative Industries The Impact of Trade and Technology on Caribbean Creative Industries October 28-29, 2004, Crowne Plaza Hotel, Trinidad October 28-29, 2004, Crowne Plaza Hotel, Trinidad
Transcript
Trade Negotiations and Culture: Trade Negotiations and Culture: What’s at Stake?What’s at Stake?
CRNM/TRINNEX Workshop on CRNM/TRINNEX Workshop on The Impact of Trade and Technology on Caribbean Creative IndustriesThe Impact of Trade and Technology on Caribbean Creative Industries
October 28-29, 2004, Crowne Plaza Hotel, TrinidadOctober 28-29, 2004, Crowne Plaza Hotel, Trinidad
ChallengesChallenges
Reliance on traditional exports no longer viableReliance on traditional exports no longer viableDeclining competitiveness in basic goodsDeclining competitiveness in basic goodsErosion of relative value of preferences in EU, Erosion of relative value of preferences in EU, US, etc.US, etc.End of preferential treatment in key marketsEnd of preferential treatment in key marketsNeed to diversify exports – increase services Need to diversify exports – increase services exportsexportsNeed to develop new services industriesNeed to develop new services industriesCultural industries have great potential to add Cultural industries have great potential to add new value, create jobs and stimulate growth but new value, create jobs and stimulate growth but they do not receive right attentionthey do not receive right attention
Negotiating TheatresNegotiating Theatres
WTO – GATS in Doha round – 2005…WTO – GATS in Doha round – 2005…
(Caricom & DR) – European Union re Economic (Caricom & DR) – European Union re Economic Partnership Agreement (EPA) by 2007Partnership Agreement (EPA) by 2007
Regional market for services in CARICOM Regional market for services in CARICOM Single Market and Economy (CSME) by Dec Single Market and Economy (CSME) by Dec 2005 – but Telecoms excluded2005 – but Telecoms excluded
Creative IndustriesCreative Industries
"Creative industries" include the recording "Creative industries" include the recording industry; music and theatre production; the industry; music and theatre production; the motion picture industry; music publishing; book, motion picture industry; music publishing; book, journal and newspaper publishing; the computer journal and newspaper publishing; the computer software industry; photography; commercial art; software industry; photography; commercial art; and the radio, television and cable broadcasting and the radio, television and cable broadcasting industries. (UNCTAD)industries. (UNCTAD)
Estimated that global market value of creative Estimated that global market value of creative industries will increase to US$1.3 trillion in 2005 industries will increase to US$1.3 trillion in 2005 (from $831 billion in 2000(from $831 billion in 2000
Most favoured nation (MFN) treatment - Most favoured nation (MFN) treatment - same same treatment to imports from all other WTO treatment to imports from all other WTO members;members;National treatment – same treatment as National treatment – same treatment as domestic goodsdomestic goods & services; & services;But many derogations from these principles;But many derogations from these principles;In the General Agreement on Trade in Services In the General Agreement on Trade in Services (GATS) only Services included in a country’s (GATS) only Services included in a country’s Schedule is open to other WTO members;Schedule is open to other WTO members;Even for those sectors you can include - MFN Even for those sectors you can include - MFN exemptions; limitations on market access & exemptions; limitations on market access & national treatment;national treatment;
BUT IS CULTURE SPECIAL?BUT IS CULTURE SPECIAL?
Very value-ladenVery value-ladenTied up with nationalism and identityTied up with nationalism and identityBut in a globalized economy to preserve But in a globalized economy to preserve and promote culture you have to sell itand promote culture you have to sell itIf not, dominant economies will present If not, dominant economies will present their culture since they own the means of their culture since they own the means of disseminating cultural expressiondisseminating cultural expressionThey also are the creators of the They also are the creators of the technology for such (ICT)technology for such (ICT)
Exceptions for “culture”Exceptions for “culture”
GATT Art XX - exception for protection of GATT Art XX - exception for protection of artistic, historic and archaeological artistic, historic and archaeological treasurestreasures
No special treatment for cultural goods & No special treatment for cultural goods & services but GATT Art. IV has special services but GATT Art. IV has special exception for films.exception for films.
2. 2. Communication ServicesCommunication ServicesD. Audio-visual servicesD. Audio-visual servicesa. Motion picture and video tape production and a. Motion picture and video tape production and distribution servicesdistribution servicesb. Motion picture projection service b. Motion picture projection service c. Radio and television services c. Radio and television services d. Radio and television transmission servicesd. Radio and television transmission servicese. Sound recording e. Sound recording f. Otherf. Other
Cont’dCont’d
10. 10. Recreational, Cultural and Sporting Recreational, Cultural and Sporting Services (other than audio-visual services)Services (other than audio-visual services)
A. Entertainment services (including theatre, live A. Entertainment services (including theatre, live bands and circus services) bands and circus services)
B. News agency servicesB. News agency services
C. Libraries, archives, museums and other C. Libraries, archives, museums and other cultural servicescultural services
D. Sporting and other recreational servicesD. Sporting and other recreational services
E. OtherE. Other
Modes of Supply:Modes of Supply:
1. Cross border trade - cable TV1. Cross border trade - cable TV2. Consumption Abroad – concerts for tourists in Cbbean2. Consumption Abroad – concerts for tourists in Cbbean3. Commercial Presence – set up studio in NY3. Commercial Presence – set up studio in NY4. Temporary Entry/Movement of Natural persons – 4. Temporary Entry/Movement of Natural persons – travel overseas do a gig.travel overseas do a gig.
In today’s world (1) depends on technologyIn today’s world (1) depends on technology(2) is easiest for developing countries (DCs); But (3) is high (2) is easiest for developing countries (DCs); But (3) is high
cost and firms are too small in DCs; (4) is constrained by cost and firms are too small in DCs; (4) is constrained by immigration issues but DCs can supply many services immigration issues but DCs can supply many services through this modethrough this mode
Allowed Restrictions on Market Allowed Restrictions on Market Access (Art. XVI) under GATSAccess (Art. XVI) under GATS
Allows one-time limitations on:Allows one-time limitations on: number of service suppliersnumber of service suppliers::– License requirement, subject to an economic needs test, to open a License requirement, subject to an economic needs test, to open a
new restaurant (100 restaurants in total) new restaurant (100 restaurants in total)
total value of service transactions or assetstotal value of service transactions or assets::– Foreign bank subsidiaries limited to x% of total domestic bank Foreign bank subsidiaries limited to x% of total domestic bank
assestsassests
total number of service operations or on the total number of service operations or on the total quantity of service outputtotal quantity of service output::– Limit on the broadcasting time allocated to foreign moviesLimit on the broadcasting time allocated to foreign movies
Market Access (cont’d.)Market Access (cont’d.)
total number of natural personstotal number of natural persons::– Foreign labour cannot exceed x% of total labour Foreign labour cannot exceed x% of total labour
force in a particular sectorforce in a particular sector
types of legal entity or joint types of legal entity or joint ventureventure::– Stipulate branch, subsidiary, etc.Stipulate branch, subsidiary, etc.
participation of foreign capitalparticipation of foreign capital::– Limits on foreign shareholding, etc.Limits on foreign shareholding, etc.
Allowed Limits on National Treatment Allowed Limits on National Treatment (Art. XVII) under GATS(Art. XVII) under GATS
No less favourable treatment to foreign services and No less favourable treatment to foreign services and services provided, unless any discriminatory services provided, unless any discriminatory conditions and qualifications are set out in national conditions and qualifications are set out in national Schedule of specific commitments.Schedule of specific commitments.
Examples of limitations on national treatmentExamples of limitations on national treatment
– Preference given to domestic audiovisual services providers in Preference given to domestic audiovisual services providers in the allocation of radio frequencies for the national territorythe allocation of radio frequencies for the national territory
– Foreigners required to obtain a special work permit to work in Foreigners required to obtain a special work permit to work in the hospitality sectorthe hospitality sector
– Hotels by non-Jamaicans subject to special discriminatory taxHotels by non-Jamaicans subject to special discriminatory tax
– Government tax incentives for small hotels by Jamaican small Government tax incentives for small hotels by Jamaican small business personsbusiness persons
Typical Barriers to Trade in Cultural Typical Barriers to Trade in Cultural Goods and ServicesGoods and Services
Tariff barriers (e.g. fiscal measures such as the Tariff barriers (e.g. fiscal measures such as the imposition of custom duties)imposition of custom duties)Other tax barriers - duties on CDs: 6 % US; 6% Other tax barriers - duties on CDs: 6 % US; 6% Canada; 9% EUCanada; 9% EUWitholding tax on revenes from live Witholding tax on revenes from live performances performances Non-tariff measures (e.g. legal and practice Non-tariff measures (e.g. legal and practice barriers such as screen quotas)barriers such as screen quotas)Investment barriers (e.g. restriction or limitation Investment barriers (e.g. restriction or limitation of foreign capital or equity participation, control of foreign capital or equity participation, control of the nationality of company directors, or of the nationality of company directors, or restriction on the repatriation of capital).restriction on the repatriation of capital).
Other BarriersOther Barriers
Work permit or visa requirements – Work permit or visa requirements – unclear, cumbersome, time-consumingunclear, cumbersome, time-consuming
Requirements such as licensing by Requirements such as licensing by industry associations – for Theatre in UK industry associations – for Theatre in UK you must comply with EQUITY rulesyou must comply with EQUITY rules
WTO Rules & Cultural PolicyWTO Rules & Cultural Policy
Current rules allow governments room to protect Current rules allow governments room to protect cultural interests;cultural interests;Most WTO Members have subsidies for cultural Most WTO Members have subsidies for cultural industries;industries;Domestic content requirements; local screen Domestic content requirements; local screen times; local music quotas on radio;times; local music quotas on radio;But these should be scheduled in GATS But these should be scheduled in GATS commitments; commitments; Preservation of cultural identity is NOT Preservation of cultural identity is NOT incompatible with open trade regimeincompatible with open trade regime
Cultural Industries in CARICOMCultural Industries in CARICOM
Jamaican music industry employs about 15,000 people Jamaican music industry employs about 15,000 people and accounts for 15-20 % of the US$300 million in and accounts for 15-20 % of the US$300 million in reggae music sales. reggae music sales. The music industry in Barbados is estimated to earn The music industry in Barbados is estimated to earn about US$15 million and in the Eastern Caribbean music about US$15 million and in the Eastern Caribbean music accounts for about US$20 millionaccounts for about US$20 million
The CI sector makes a valuable contribution to the The CI sector makes a valuable contribution to the Caribbean economy but goes largely undocumented.Caribbean economy but goes largely undocumented.Consequently, the sector has suffered from neglect in Consequently, the sector has suffered from neglect in government economic policy formulation throughout the government economic policy formulation throughout the region.region.
Caribbean Objectives re Cultural Caribbean Objectives re Cultural Goods & ServicesGoods & Services
Create and facilitate opportunities for Create and facilitate opportunities for Caribbean business in creative industries Caribbean business in creative industries (performing and lyrical arts, music & (performing and lyrical arts, music & entertainment sectors, publishing, A/V, entertainment sectors, publishing, A/V, etc.) to contribute to investment, etc.) to contribute to investment, employment generation and wealth employment generation and wealth creation;creation;Market access in OECD & other countries Market access in OECD & other countries is very importantis very important
Media & Communication & CultureMedia & Communication & Culture
Improve access of cultural industries to Improve access of cultural industries to existing media.existing media.
Align trade policy with telecoms and Align trade policy with telecoms and broadcast media policy.broadcast media policy.
Source funding for audio-visual Source funding for audio-visual production.production.
Encourage co-production and Encourage co-production and collaborations in media productions.collaborations in media productions.
Media & Cultural OutputMedia & Cultural Output
Access to media is vital to business Access to media is vital to business development in the sector. “Consumers buy development in the sector. “Consumers buy what they see, hear and read in the media”.what they see, hear and read in the media”.
Regional content in the print, radio and Regional content in the print, radio and audiovisual media is low relative to the quantum audiovisual media is low relative to the quantum of cultural content produced across Caribbean. of cultural content produced across Caribbean.
The goal should be to make local & regional The goal should be to make local & regional content more accessible to media houses to content more accessible to media houses to expand contribution of cultural industries to expand contribution of cultural industries to Caribbean identity formation.Caribbean identity formation.Protection of Intellectual property issuesProtection of Intellectual property issues
Negotiating ObjectivesNegotiating Objectives
Reduce any current barriers to export of Reduce any current barriers to export of Caricom cultural goods and services;Caricom cultural goods and services;Restrictions on temporary entry - work permit Restrictions on temporary entry - work permit requirements & proceduresrequirements & proceduresRestrictions on investment – e.g., set up radio Restrictions on investment – e.g., set up radio station in Toronto to play Cbbean music; set up station in Toronto to play Cbbean music; set up magazine.magazine.Reduction of tariffs on cultural products – CDs, Reduction of tariffs on cultural products – CDs, craftscraftsReduction of constraints to export of live Reduction of constraints to export of live performances (domestic requirements)performances (domestic requirements)
Linkages are keyLinkages are key
For creative industries to grow we need For creative industries to grow we need efficient “other” servicesefficient “other” services
Trade negotiations may help you in some Trade negotiations may help you in some respectsrespects
Critical role of telecoms – how do we get Critical role of telecoms – how do we get leading edge technology? leading edge technology?
Caribbean PositionCaribbean Position
No formal regional policy position on culture-No formal regional policy position on culture-trade issue as yet;trade issue as yet;But most CARICOM states have opened But most CARICOM states have opened Entertainment Services in GATS/WTO (with Entertainment Services in GATS/WTO (with limitations);limitations);All CARICOM states need investment in cultural All CARICOM states need investment in cultural industries;industries;Domestic capital base is inadequate;Domestic capital base is inadequate;Convergence of media and ICT is important for Convergence of media and ICT is important for marketing cultural products & services.marketing cultural products & services.
Globalization & CultureGlobalization & Culture
Preserving cultural diversity in the face of Preserving cultural diversity in the face of the pressures of economic globalization the pressures of economic globalization and trade liberalizationand trade liberalizationCanada, EU want to exempt culture from Canada, EU want to exempt culture from trade rulestrade rulesSpecial international instrument on cultural Special international instrument on cultural diversitydiversityBut small states need to develop cultural But small states need to develop cultural industries with foreign investmentindustries with foreign investment
UNESCO & Cultural DiversityUNESCO & Cultural Diversity
Discussions on Draft Discussions on Draft Convention on the Convention on the Protection of the Diversity of Cultural Protection of the Diversity of Cultural Contents and Artistic ExpressionsContents and Artistic Expressions March 30 – March 30 – 33rdrd April; May 31 April; May 31stst
First draft in mid July. Convention should be completed First draft in mid July. Convention should be completed in 2005.in 2005.
Overall aims and objectives of the Convention are Overall aims and objectives of the Convention are laudable and such Convention can be supportedlaudable and such Convention can be supported
BUTBUT Caricom must ensure that this initiative does not Caricom must ensure that this initiative does not result in restrictions on market access for its cultural result in restrictions on market access for its cultural
exports.exports.
UNESCO DiscussionsUNESCO Discussions
Instrument (Convention) will be legally binding – Instrument (Convention) will be legally binding – change from previous declarations.change from previous declarations.Define - Nature of 'cultural goods and services' Define - Nature of 'cultural goods and services' Disagreement on whether Convention should Disagreement on whether Convention should recognize their dual cultural and/economic recognize their dual cultural and/economic nature. nature. Some countries felt that consideration of the Some countries felt that consideration of the latter went beyond scope of Convention. latter went beyond scope of Convention.
UNESCO ConventionUNESCO Convention
Generally affirmed that pre-eminence of the Generally affirmed that pre-eminence of the cultural value of cultural products over their cultural value of cultural products over their economic value would be underscored;economic value would be underscored;
Demand that cultural goods and services from Demand that cultural goods and services from developing countries receive special treatment.developing countries receive special treatment.
May affect WTO obligations, even if indirectlyMay affect WTO obligations, even if indirectly. .
UNESCO ConventionUNESCO Convention
Agreed that a non-exhaustive list of cultural Agreed that a non-exhaustive list of cultural goods and services would be included; goods and services would be included; Disagreement re obligations arising from Disagreement re obligations arising from Convention on state parties at the Convention on state parties at the international level;international level;Some experts think Convention should expressly Some experts think Convention should expressly allow countries to derogate from existing allow countries to derogate from existing commitments in international agreements if commitments in international agreements if exercise of these rights would threaten or cause exercise of these rights would threaten or cause serious damage to cultural diversity - No serious damage to cultural diversity - No agreement on this issueagreement on this issue
Problems with Draft ConventionProblems with Draft Convention
In September 2004 - UNESCO meeting considered the In September 2004 - UNESCO meeting considered the Draft Convention on the Protection of the Diversity of Draft Convention on the Protection of the Diversity of Cultural Contents and Artistic ExpressionsCultural Contents and Artistic ExpressionsLanguage in many parts is very broad and vague and Language in many parts is very broad and vague and may be used for arbitrary protectionist purposes; can may be used for arbitrary protectionist purposes; can frustrate market access for cultural goods & servicesfrustrate market access for cultural goods & servicesNot clear what is meant by “vulnerable forms of cultural Not clear what is meant by “vulnerable forms of cultural expression” (Art. 18)expression” (Art. 18)Also Art. 19 (Option A) is problematic; unclear what can Also Art. 19 (Option A) is problematic; unclear what can “cause serious damage or threat to the diversity of “cause serious damage or threat to the diversity of cultural expression.”cultural expression.”Need for a balance between protection of culture and Need for a balance between protection of culture and market access for cultural goods & services market access for cultural goods & services
