CCA Bulletin 34/06

Ottawa, August 21, 2006

Trade negotiations: the pressure on Canadian audio-visual policies temporarily relieved

In late July, Pascal Lamy, Director-General of the World Trade Organization (WTO) announced that the "Doha Round" of negotiations had been suspended indefinitely. The Doha Round, launched in 2001, is the latest attempt by the WTO to make progress on eliminating tariffs and easing other barriers to international trade. The suspension covers all WTO negotiating tables, including the General Agreement on Trade in Services (GATS).

Concerns have been expressed about the possible serious consequences of a new GATS agreement for the treatment of cultural services, including the audio-visual sector. Canada and other countries received a request from seven countries, including the United States and Japan, to open up motion picture production, distribution and exhibition; promotion and advertising; and sound recording services . This request stems from the new "plurilateral request" negotiating protocol, a process that WTO implemented to put more pressure on member states to "improve" their services offers.

The consequences for the Canadian audio-visual sector are evident. The request seeks the elimination of content quotas, foreign equity restrictions, nationality or residency requirements, discriminatory tax treatment, local production or employment requirements, and other policy measures. It also seeks to limit the use of co-production treaties. In other words, foreign firms would be free to set up in any market and to operate without restrictions and government measures designed to promote national culture and thence, cultural diversity.

Concerns have also been expressed about telecommunications services negotiations, where Canada is one of those seeking other countries to open up this sector. This plurilateral requests asks others to remove all limits on foreign investment in the domestic telecommunications sector, an interesting development given that Canada currently maintain ownership limits of domestic telecommunications firms on the grounds that, with convergence, rules in telecomm, cable and broadcasting must be equivalent.

The suspension followed the collapse of a last ditch negotiating session in Geneva at the end of July. The reason cited by Mr. Lamy for the suspension was the impasse over agricultural subsidies, the perennial bête noire of international trade negotiations.

There is divided opinion about what these developments mean. Clearly, it is an admission by the WTO that a comprehensive trade deal will not be concluded before the mid-2007 expiry of the "fast-track" negotiating authority provided to the U.S. President, which is essential for any deal to be approved by Congress. Some believe negotiators will now "harvest" the commitments made to this time and conclude the Doha Round, others believe negotiators will merely re-focus on negotiations to conclude after the next U.S. Presidential election. Some expect that certain countries will push for the GATS negotiations to be resumed separately from the Doha Round, since they were part of the left-over matters from the previous negotiating round and were mandated to continue at that time.

Regardless of what happens over the next six months, the CCA will keep a close eye on developments at the WTO to assess any possible impact on the Canadian arts and culture sector. To date, the Government of Canada continues to insist that it will not negotiate culture during any international negotiations, including at the WTO, and the CCA will work to continue to ensure that this position is maintained.