World Trade Organization (WTO)
Culture
The World Trade Organization: From Doha and Beyond
Speaking notes for Ambassador Sergio Marchi at the:
Canadian Association of Broadcasters
Third Annual International Broadcasters Dialogue
Banff Television Festival
June 10, 2002
Introduction
I am honoured to be part of the Third International Broadcasters Dialogue at this annual festival. I would also like to thank Glenn O'Farrell and the Canadian Association of Broadcasters for giving me this opportunity to speak to you on the agenda before the World Trade Organization in Geneva.
I must say it is always a great pleasure be back in Canada, and to take in the inspiring scenery of Banff. It is such a precious part of our natural heritage, and I can see why television industry representatives meet in this spectacular location every year -- the ambiance truly lends itself to creativity and innovation.
Coming home and meeting with Canadian industry leaders like yourselves helps me focus on the central goal of Canada's work at the WTO, namely, opening opportunities around the world for Canadian businesses and Canadian exports.
And as part of Canada's cultural industry -- a sector that accounts for over 22 billion dollars of Canada's GDP, and employs some 700,000 Canadians -- you all know how real and significant those opportunities are. In fact, Canadian cultural exports grew by almost 40% from 1996 to 2000.
Granted, most of those exports go to the United States -- just like all of our other products -- but Europe remains a priority market, while Latin America and Asia are emerging as important consumers of Canadian cultural goods and services. Overall, I believe our best guarantee for access and fair play in those global markets is by having clear and predictable international rules. And that is where the WTO comes into play.
The Canadian broadcasting community -- representing a 4 billion dollar industry that employs more than 30,000 Canadians -- plays an active role in helping Canada shape those rules, so it is vital that we all understand the current context and agenda of the WTO. And that's what I would like to share with you today.
Doha
The WTO's Ministerial Conference in Doha, Qatar last November was a pivotal turning point for the Organization. At Doha, trade ministers representing 142 WTO Members pushed aside the legacy of Seattle, overcame the immediacy of the 9-11 shock, and responded positively to stimulate the sluggish world economy. Ministers looked to the long term, and launched an ambitious new round of global trade negotiations.
Doha will be remembered for three major accomplishments.
The Negotiating Agenda
First, it mandated a broad negotiating agenda which includes:
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liberalization of goods and services trade on a clear timetable;
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significant agricultural reform;
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clearer rules on anti-dumping, subsidies & countervailing measures;
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certain trade and environment issues;
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a multilateral registry for wines and spirits; and,
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reform of the dispute settlement system.
Doha also paved the way for possible future negotiations on the "Singapore issues" -- global rules for investment, competition policy, transparency in government procurement and trade facilitation -- to be launched by consensus at the Ministerial Conference next year in Mexico.
Based on this broad menu of sectors, the Doha round holds the prospect of substantial economic benefits for all WTO Members.
For a country like Canada, for example - where close to 70% of our GDP comes from services, including more than 55 billion Canadian dollars in exports and millions of jobs - the services negotiations hold out huge potential.
On agriculture, a vital sector for Alberta, trade ministers made history when they agreed to negotiate reductions of, with a view to phasing out, all forms of agricultural export subsidies, and to reduce trade-distorting domestic support. Rich countries currently pay out some 1 billion US dollars in market distorting subsidies every day. That is more than four times the annual development assistance going to poor nations. The US and EU together account for about 64% of those subsidies, even before the US farm bill adds almost 190 billion US dollars in new subsidies over the next 10 years! And these are but two of the items being negotiated!
Doha Development Agenda
Second, at Doha the WTO made a serious attempt to bridge the development divide, the significant global gap between rich and poor.
The Doha Development Agenda -- as we've called this round -- will contribute to real economic growth and reduction of poverty in developing countries. And surely that is just what this and any round must do. After all, trade policy is not an end in itself, but a means to raising the living standards of people around the globe.
In that spirit, the developed-country Membership specifically committed more and better trade-related technical assistance -- to ensure that every WTO Member can participate more effectively in negotiations, and ultimately maximize the benefits of global trading system.
Moreover, the Doha mandate goes beyond enhancing capacity, and addresses developing country concerns about basic market access for their primary exports in the rich markets of the North. That's where the rubber hits the road for developing countries.
Toward this end, it should be noted that our Prime Minister has offered much needed leadership on this development theme, and he is determined that the cause of Africa be a major focus of the G8 agenda at the Kananaskis Summit, which will take place just down the road from Banff in two weeks time. This is a worthy cause for Canada to champion.
China
The third notable accomplishment at Doha was the decision - after 15 years of negotiations - to accept China as a Member of the WTO family.
This was a momentous event for both the WTO as an institution, and for China as it continues to reform its economic market place. China's accession means that more than 97% of world trade is now governed by the WTO system, making the WTO a more complete global organization, with unrivalled potential for stimulating global economic growth.
It also means that China will now be committed to a set of multilateral rules which offer significant advantages to Canadian exporters. This includes the WTO's intellectual property rules that are so important to the cultural sector.
Start of the journey
Looking ahead, it is clear that Doha was just the beginning of the journey. We only launched new negotiations; now we have much work and very little time to do it.
The deadline is Jan. 1, 2005, and in WTO real time that is a very ambitious goal. Especially when you consider that the previous Uruguay round took almost 8 years to complete.
But WTO Members have made solid progress since Doha on establishing the intricate framework needed for negotiations, the plumbing side of the equation. Without going into the many details, the WTO Membership has:
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Chosen Cancun, Mexico to host the 2003 Ministerial;
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Established a lean and efficient negotiating structure and workplan; and,
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Raised 30 million Swiss Francs for the "Global Trust Fund" on technical assistance.
In fact, the WTO has moved faster than the GATT did in Uruguay Round. But then again, we don't have 8 years to finish the job!
The Challenges Ahead
Of course, a number of challenges confront us in the actual negotiations themselves, which is the poetry side of the equation.
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The first challenge, and greatest enemy, is time.
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Members will need an unwavering determination to meet the January 1, 2005 deadline. We will also require active and ongoing Ministerial engagement
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We must maintain the trust and enthusiasm of developing world
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Developing countries constitute three quarters of the WTO Membership.
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WTO Members must deliver technical and capacity-building assistance and maintain the goodwill from Doha.
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Cooperation between the US and EU is critical
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These are the two "elephants" at the WTO.
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US Trade Representative Zoellick and EC Trade Commissioner Lamy deserve tremendous credit for working cooperatively in containing their differences before Doha, and in shaping a shared agenda.
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Their ability to work together was a decisive step toward launching a new round.
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It is now vital that they continue to work together and prevent disagreements from spilling over to the negotiations.
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US needs to be a leading, liberalizing force
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Recent decisions in the US on softwood, the farm bill and steel, are worrying Canada and other WTO Members.
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The US must remain a leader and a liberalizer in world trade.
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To successfully close negotiations by 2005, the US Administration will also need flexible and realistic Trade Promotion Authority from Congress -- and the sooner the better.
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And that's because no self-respecting nation will want to negotiate twice with the United States, once with the Administration and then with the Congress. WTO Members want to do it once and do it right.
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The final challenge is to build greater public support for the WTO as an institution for the WTO as an institution
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Political leaders cannot make the tough choices required if they and the public only hear from the WTO's critics.
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I believe Canadian business leaders, stakeholders and governments must all help to build support for Canada's work at the WTO given our vested interests.
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To be frank -- compared to bilateral and regional initiatives -- the private sector internationally took much less interest in Seattle and Doha.
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Given the stakes involved, this needs to change.
What the WTO Means for Canada
What are the stakes for Canada?
Well, I believe that Canadians instinctively know how crucial trade is to our national economic fabric. Canadians understand that we must go beyond our frontiers if our nation is to sustain the economic wealth needed to maximize opportunities for our citizens. Last year, Canada's exports totalled more than C$402 billion -- more than 45% of GDP -- and one in three Canadian jobs are tied to exports alone.
So clearly, Canada's current and future prosperity depends in large measure on a rules-based global system:
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a system that seeks to eliminate unnecessary barriers to trade;
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a system that is fair and transparent;
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a system that can arbitrate disputes according to who is right and not who has the might;
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and a system that can adapt in an era of unprecedented global change.
Indeed, try to imagine, in an increasingly interdependent global economy, a world without an institution like the WTO? Without a doubt, this would not be a better world for Canada, nor for many other nations.
Trade and Culture
Canada's need for a rules-based international system applies to cultural industries as much as any other sector.
Our market for cultural goods and services is already one of the most open in the world, but we must also ensure a Canadian presence on the international stage. In that respect, we need to go beyond Doha.
That's why Canada is championing the development of a "New International Instrument for Cultural Diversity", which aims to lay out clear rules for culture and trade matters for the benefit of artists, performers, writers, producers, broadcasters and ultimately, consumers and citizens around the world.
As you know, in bilateral and regional trade agreements, such as NAFTA, Canada has negotiated a "cultural exemption". And at the WTO, the "bottom-up" structure of the General Agreement on Trade in Services (the GATS) allows Canada to choose which sectors we want to open to foreign competition and to what extent. For example, we have taken no GATS obligations for audio-visual services. And until the New International Instrument is fully developed, Canada will continue its strategy of not making any commitments that restrict our ability to achieve our cultural policy objectives.
In that light, the fact that other Members may want negotiations on A-V services places Canada -- or any other country for that matter -- under no obligation to make any such commitments.
But changing technology, industry convergence and growing economic interdependence are creating new challenges. Convergence in the industry means companies may have several means of distributing products to audiences - via broadcast or print, cable or internet. So owners of "content" are now facing a different set of rules, domestically and internationally, depending on their choice of distribution.
For example, the Split-Run Magazines dispute started when Sports Illustrated beamed content into Canada via satellite and circumvented the tariff code against printed split-run magazines. The WTO dispute settlement decision made it clear that a new approach to culture and trade issues was warranted.
With the Split-Run case acting as a catalyst, in 1999 the federal government accepted the recommendation of the Cultural Industries Sectoral Advisory Group on International Trade (SAGIT) to pursue a New International Instrument.
The SAGIT argued the time was right to lay out ground rules to enable Canada and others to maintain policies that promote culture, while respecting trade rules and ensuring markets for cultural exports.
Contrary to what some people may think, the Instrument is not an attempt to have our cake and eat it too, nor is it a protectionist tool. It is a legitimate expression of Canada's aspirations as a country -- an assertion that our cultural experiences are uniquely woven into our very lives and communities in a way that defines and sustains us as a nation and as a people.
And beyond our borders, the Instrument offers a means to help ensure that distinctive stories and storytellers around the world can find space for themselves in the global information society. In short, the working proposition for the Instrument is that cultural diversity is a rich and dynamic part of our global heritage, and we should strive to keep it that way.
But I can tell you from my experience in Geneva that developing the Instrument will not be easy. The very concept is relatively new in international terms, and it competes with many other issues for attention. It will take time and effort to build the consensus required.
We all know that support from major countries will be critical. But I believe that support from the developing world is perhaps just as important. Not only do developing countries make up the majority of the membership of major international organizations like the WTO, but they too have their own unique concerns about the role and place of their culture in the global community.
The popular Jamaican music sector, for example, is a global industry worth 1.2 billion US dollars. And African sound recordings are now estimated to earn about 1.3 billion US dollars per year. Yet the lack of technological and legal infrastructure in Jamaica and Africa, including insufficient intellectual property protection, means most of the production, promotion and profits go to Europe and North America. Jamaica and Africa retain only a small return on these cultural assets.
In that context, we need to build common cause with many nations, and build support for an Instrument that meets all our different needs. You can help build those bridges.
Successes
We are already making some progress on this front. To help lay the international groundwork for the Instrument, Canada is building a growing recognition of the importance of cultural diversity and of the need for greater international cooperation.
Our efforts can be seen in the G-8 Okinawa Communique and the Summit of the Americas Declaration. Culture Ministers from Members of the Organization of American States will have their first Ministerial in Cartagena in July. Francophonie Culture ministers have endorsed in principle the need to consider a new instrument, as has the 2001 UNESCO Declaration on Cultural Diversity and its Work Plan.
My former Cabinet colleague and successor, the Minister for International Trade, Pierre Pettigrew, consistently raises the issue with his counterparts.
And my good friend, the Minister of Canadian Heritage, Sheila Copps, has championed the International Network on Cultural Policy (INCP).
In fact, culture ministers participating in that forum have tasked a working group, chaired by Canada, to prepare a draft outline of options for the new international instrument for this October's meeting of Ministers in South Africa. Similar work on a draft Instrument has also been undertaken by an NGO, the International Network for Cultural Diversity, hosted in Canada by the Canadian Conference of the Arts.
In Canada's view, it is absolutely critical for our culture and trade officials to work together with industry and other stakeholders if we are to achieve our goal. Policy coherence is vital if we are to encourage, and ultimately convince, others to adopt our unique and cooperative approach. Above all, we must remain resolute, and not be discouraged by the challenges before us. We should take some comfort that, partly because of Canada's efforts and leadership, there is today a lively international dialogue on cultural diversity, trade and globalization.
Conclusion
In closing, we all know the international economy is changing more quickly than ever. Every day, technological advances are opening up new opportunities in all facets of our lives, and these changes are touching people in cities and villages in all corners of our world.
The power of international trade can help to maximize these opportunities: it can help to improve living standards, it can help to reduce poverty, and it can also help to enhance our cultural diversity. We need, however, to harness and shape the forces of trade. We need fair and effective rules to guide trade. And we need to distribute the benefits of trade more evenly among the family of nations.
The World Bank recently estimated that abolishing all trade barriers would boost global income by almost 3 trillion US dollars, and lift 320 million people out of poverty. It's unrealistic to assume that one trade round will abolish all barriers, but this figure serves as a powerful vision of the huge potential for the Doha agenda.
Talking of the emerging global village, it was Marshall McLuhan who said that:
"We have become irrevocably involved with, and responsible for, each other."
He was right. We truly have become our brother's keeper. In this spirit, the WTO's new round offers our global community unprecedented opportunities. It should also challenge all of us to go beyond self-imposed limitations, and live up to our responsibilities to one another.
Thank you very much and enjoy the rest of the Festival.
Updated on July 29, 2002
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