It's Your Turn
Consultations on FTAA and WTO Negotiations
Sectoral Consultations - Culture
Discussion Paper (May 1999)
Towards a Canadian Position on Trade in Cultural Goods and Services
Table of Contents
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Treatment of cultural goods and services in existing trade agreements
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The pressures for change facing cultural industries
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A new strategy for cultural trade policy
Questions related to interests of cultural industries
Questions for discussions related to the new international instrument
The Government of Canada is seeking the opinions of Canadians on the scope, content and process for negotiations to establish the Free Trade Area of the Americas (FTAA) and for anticipated negotiations at the World Trade Organization (WTO). International trade and investment are vital to Canada's economic well-being. One in three Canadian jobs are linked directly to trade, and exports alone represent 40 per cent of GDP. History has also shown that Canada benefits from predictable and clear international trading rules, where right, and not might, determines how disputes are settled and international transactions conducted.
The preservation and promotion of cultural identity is a core objective for Canada in all international trade negotiations. During previous trade negotiations, Canada has pursued this goal by negotiating cultural exemptions, or by not assuming obligations regarding cultural industries.
In anticipation of future trade negotiations and recognizing that changing technology, convergence and economic interdependence are having a growing impact on Canada's cultural industries, the Minister for International Trade, the Hon. Sergio Marchi, requested the Cultural Industries Sectoral Advisory Group on International Trade (SAGIT) to provide advice on the challenges facing the industry and on what this means for Canada's cultural trade policy. The result of their effort is the report released on Feb 17, 1999 by the SAGIT entitled Canadian Culture in a Changing World: New Strategies for Culture and Trade.
Building on the work done by the Cultural Industries SAGIT, the Government is seeking the opinion of Canadian stakeholders on how Canada can continue to achieve its cultural and trade policy objectives in a manner that maximizes opportunities and reduces uncertainties in the international marketplace. Therefore, this discussion paper should be read in conjunction with the SAGIT Report. Together these documents outline the issues that may need to be addressed as we develop Canada's position for future trade negotiations.
After briefly canvassing some of the trade and culture issues raised in the SAGIT report, this discussion paper explains what work is underway by the federal government to respond to the Report's recommendations. We also suggest questions that Canadians may want to examine themselves in anticipation of future negotiations. Finally, we pose questions for discussion that are focussed on the SAGIT's proposal for a new international instrument.
I. Treatment of cultural goods and services in existing trade agreements
The SAGIT Report (pages 23 - 26) briefly outlines the existing trade disciplines (primarily contained in the WTO agreements & NAFTA) related to cultural industries. There is also a short description of recent trade disputes that have involved cultural industries.
There are five principal areas in which trade agreements may have commitments that affect cultural industries. These are: goods, services, intellectual property, investment and competition policy. NAFTA contains disciplines in all of these areas, while the WTO has few obligations relating to investment and virtually none relating to competition policy (although both are the subject of work in the WTO). To address Canadian cultural concerns, we have chosen either to negotiate an exemption (e.g. the FTA cultural exemption repeated in the NAFTA) or to avoid taking on obligations affecting cultural industries.
Development of an approach to trade and investment in cultural goods and services will have to encompass existing and future obligations in these five areas. It would also have to take into account the WTO (and FTAA) work on electronic commerce; an area that is clearly relevant to cultural trade issues.
The complexity of the task is a function not only of the multitude of existing obligations in trade agreements but of determining how these agreements relate to one another. For example, as was underlined by the WTO decision on Periodicals, the distinction between goods and services is sometimes unclear, allowing GATT and GATS obligations to co-exist. Thus, any future trade negotiations that affect cultural goods and services will have to take into account the different agreements in these five areas, the overlap between them and the linkages to other horizontal work programs such as the one on electronic commerce.
II. The pressures for change facing cultural industries
While trade agreements have sometimes been used by our trading partners to challenge specific elements of Canada's cultural policies, the SAGIT Report identifies some of the other pressures and challenges facing cultural industries. New industries and new products mean that sectors that were once quite different - broadcasting, cable, satellite, telecommunications and multi-media - are now merging and converging. In such a dynamic environment, it is not always clear how the rights and obligations of existing trade agreements will apply. As the Report notes (page 25):
"New links between cultural content, telecommunications, and business and industry applications are making it more difficult to define cultural products for purposes of trade agreements blurring the traditional definition".
Of course, this is a challenge for domestic regulators too and Canada is not alone in trying to determine how best to continue to pursue cultural policy objectives in such a dynamic environment.
Another source of change for cultural industries arises from continuing economic interdependence. More open markets and the creation of global market niches present opportunities for cultural industries but also pose challenges for domestic policies intended to promote cultural identity. As a result, trade and investment issues may hold larger considerations for cultural industries than they have in the past.
III. A new strategy for cultural trade policy
The SAGIT Report concludes with the recommendation that Canada should champion the idea of a new international instrument which would lay out the ground rules for cultural policies and trade. The report notes (page 31):
"A new cultural instrument would seek to develop an international consensus on the responsibility to encourage indigenous cultural expression and on the need for regulatory and other measures to promote cultural and linguistic diversity. The instrument would not compel any country to take measures to promote culture, but it would give countries the right to determine the measures they will use (within the limits of the agreement) to safeguard their cultural diversity."
Its recommendation is based on the fact that cultural goods and services are to a great extent already subject to the existing trade and investment obligations and that pressures are building (for example, commitment for further negotiations on services, industry convergence) that may lead to more extensive coverage. The SAGIT Report leaves open the question of where a new instrument should be negotiated. However it does describe what the SAGIT believes such an agreement should do:
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recognize the importance of cultural diversity
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acknowledge that cultural goods and services are significantly different from other products
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acknowledge that domestic measures and policies intended to ensure access to a variety of indigenous cultural products are significantly different from other policies
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set out rules on the kind of domestic regulatory and other measures that countries can and cannot use to enhance cultural and linguistic diversity
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establish how trade disciplines would apply or not apply to cultural measures that meet the agreed upon rules
Next Steps:
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Analysis:
In preparation for future trade negotiations, the Department of Foreign Affairs and International Trade and other government departments have work underway in various issue areas of relevance to cultural industries:
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Trade in Goods and Services
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Intellectual Property
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E-commerce
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Investment
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Competition policy
As part of this process, the Departments of Foreign Affairs and International Trade and Canadian Heritage are examining issues that are particularly relevant to trade in cultural goods and services and how these areas might overlap.
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Consultation:
Through the Cultural Industries SAGIT, focus groups and other on-going or specific consultations, the cultural industries stakeholders will be involved in developing the Canadian position. More generally, the Government has sought the written views of Canadians via a notice in the Canada Gazette and the Standing Committee on Foreign Affairs and International Trade is undertaking cross-Canada hearings on issues related to future trade negotiations. In addition, federal officials will work closely with their provincial counterparts to elaborate Canada's position for future negotiations.
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International Advocacy and alliance building:
Both the Minister for International Trade and the Minister for Canadian Heritage have been raising international understanding and awareness of the importance Canada attaches to the promotion of cultural diversity and identity. In meetings of Trade Ministers and through such initiatives as the International Network on Cultural Policy, they have made clear Canada's intention to ensure that future international negotiations recognize the right of governments to promote these cultural objectives. Canada is also pursuing these issues both bilaterally and through multilateral institutions such as UNESCO.
In advance of the November 1999 WTO Ministerial Meeting in Seattle, WTO Members are identifying their priorities for future negotiations and putting forward proposals for negotiations. In this regard, Canada is considering how to ensure that work in the WTO will reflect our views regarding cultural goods and services.
Questions related to interests of cultural industries
In order to prepare for future negotiations, Canadian cultural industries will want to ensure that they have identified their specific interests with respect to any future negotiations. Questions cultural industries may want to consider include the following:
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What Canadian regulatory and policy frameworks are most important to your industry?
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What impact would the use of similar frameworks by other countries have on your plans?
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Is access to foreign capital and foreign partners important to you?
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How do you see the use of the Internet and e-commerce affecting your business plans?
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To what extent do you see opportunities for growth in markets outside Canada?
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What barriers do you face when selling or investing outside Canada?
Questions for discussions related to the new international instrument
Based on the SAGIT recommendation we need to begin discussion on a conceptual framework for a new instrument to address trade and cultural policy issues. Described below are the possible elements of such an instrument, drawing from our experience with other international instruments. They should be discussed from the starting point of the objectives of Canadian cultural policy and of the interests of Canadian cultural industries. The discussion should not pre-judge the question of where such an instrument should be negotiated or whether a given instrument would contain all of these elements.
General Principles
As set out in the SAGIT paper (page 5), Canada's cultural policies are based on the principles of freedom of expression, freedom of choice, access to Canadian culture, cultural diversity and partnerships between governments and the private sector. While less work has been done in defining cultural principles than trade principles at an international level there are some principles existing in international cultural agreements which reflect issues such as shared cultural objectives and the principle of cultural diversity.
How can such principles be adapted to a new international instrument?
To what extent should other international principles such as non-discrimination, transparency and predictability also be included?
Scope of Coverage
Rather than attempting to define what is meant by "culture" we might focus our efforts on those goods and services which are most relevant to policies related to culture, trade and investment, and thus more likely to benefit from clearly defined rules.
What cultural goods and services would be subject to such an instrument?
Rules-based Approach
One of the goals of clearly defined rules is to provide certainty so that governments and industries will know which policy instruments cannot be challenged by our partners and which may be exposed to dispute settlement.
What types of policy instruments and in what sectors would we want such an instrument to guarantee freedom of use by governments?
Are there certain policy instruments that we would find unacceptable for governments to use?
How would the rights and obligations of the new international instrument relate to those in existing or future agreements?
What type of dispute settlement process would we like to have in a new international instrument?
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