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

CCA Bul­letin 34/06

August 21, 2006

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.