A look at the origins of the cultural diversity discourse
Although the idea of state protection of cultural identity is not exceptional and has existed for many years, possibly going as far back as the origins of sovereignty (Petito, 2001), the international policy debate on the relationship between trade and culture began only after the First World War. This has to do with the changing nature of the medium, as well as with the particular period in history. In the former sense, although the printed media, such as books, newspapers and magazines, were the first manifestation of the industrialisation of cultural production, they had relatively low tradeability, mostly because of their cultural specificity and the use of local language, which made them less appealing to a critical mass of consumers outside the domestic market (Footer and Graber, 2000: 116-117). Audiovisual media, especially film, in contrast, proved more suitable for engaging and appealing to a broader audience. After the First World War, the initial predominance of European cinema had subsided and Hollywood had clearly become the new centre of global film-making, exporting visual entertainment in vast amounts (Bruner, 2008; Singh, 2008; Trumpbour, 2007).
As a reaction to this shift of power, and fearing both the economic and cultural impact of Hollywood, many European governments introduced measures to protect their domestic film industries, mostly in the form of import and screen quotas. These measures found expression in the 'Special provisions relating to cinematograph films', which became part of the GATT 1947. Article IV thereof permitted quotas for 'the exhibition of cinematograph films of national origin during a specified minimum proportion of the total screen time', while preserving the general ban on quantitative restrictions on imports (GATT Article XI). The screen quotas under Article IV GATT are a proof that cultural exceptions were indeed accepted by the GATT members; but they also reveal the relatively narrow focus of such exceptions on audiovisual media.
The idea that some measures protecting national cultural industries may be justified was also reflected in bilateral and regional fora. In 1988, the cultural proponents celebrated a major victory when Canadian negotiators introduced a 'cultural exclusion' clause in the Canada- US free trade agreement (CUSFTA).1 Five years later, such exclusion was also included in the North American free trade agreement (NAFTA), which incorporated by reference CUSFTA in Annex 2106.2 It should be noted, however, that this cultural clause was coupled with a retaliation provision that significantly limited by design its practical use.
The cultural exception proponents were eager to transplant these localised 'successes' into the multilateral context. The tension between trade and culture had intensified at this point of time as technology, especially satellites, increasingly facilitated diffusion of cultural content, not only in film but also in television. Another important reason for the particular intensity of the cultural exception battle fought during the Uruguay Round had to do with the round's special mandate and the significance of its outcomes. The Uruguay Round was not simply aimed at dismantling tariff barriers but was a much further reaching undertaking that ultimately led to the establishment of the WTO with a new structure and an impressively effective dispute settlement mechanism (Jackson, 1997). The WTO, which became operational on 1 January 1995, included domains previously unaffected by international trade regulation - most notably, intellectual property (by means of the agreement on trade-related aspects of intellectual property rights, TRIPS) and services (by means of the General agreement on trade in services, GATS).3
The cultural proponents at the WTO, led by the then European Communities and Canada,4 had an ambitious goal during the Uruguay Round of negotiations. They aimed at exempting any product or service that is culture-related from the rules of the negotiated WTO Agreements - and hence at establishing an 'exception culturelle'. While they were eager to create such rules that would allow carve-outs for all cultural sectors, it should be again stressed that the main focus of the efforts was upon the exclusion of audiovisual services, as the sensitivities in the media sector were the highest and as other cultural services were less tradeable.
Reflecting this narrow focus of the tension, during the Uruguay trade talks, a Working Group on Audiovisual Services was established. Its essential task was to consider whether the special cultural considerations related to the audiovisual sector demanded its total exclusion from the scope of the services agreement,5 or whether a dedicated annex to the agreement would provide a solution. The opinions differed profoundly, and even the diplomatic vernacular of trade representatives could not conceal the chasm between those in favour of free trade and those in favour of shielding (national) culture. While Canada and audiovisual media exporters, such as India, Brazil and Hong Kong, were important actors (WTO, 1990a), the greatest clash on media matters was between the European Community (EC) and the US (Singh, 2008: 122 and passim). This particular feature of the discourse on trade and culture sets it apart from other 'trade and...' debates, which typically involve confrontation between developed (where the US and the EU tend to share the common front) and developing countries (Lang, 2007).
When discussing the role of the EC on the international scene, it should be noted that although the EC had limited powers in cultural affairs, as the core competence remained with the member states (Craufurd Smith, 2004b, 2011), it had more leeway in the field of audiovisual services. The Television without Frontiers (TWF) Directive, adopted in 1989, is an expression of this and proved the centrepiece of the evolving and expanding European media policy (Burri, 2007; Harrison and Woods, 2007). Noteworthy in the context of the present discussion is that despite being essentially a liberalisation instrument, the TWF Directive contained two specific provisions (Articles 4 and 5), which were the only tools at Union level explicitly meant to serve cultural goals by ensuring a balance of offerings in the EU broadcasting markets. Article 4 TWF called upon the member states to ensure, where practicable and by appropriate means, that broadcasters allocate a majority of time on television channels, to European-made programmes (the so-called 'European works'). Article 5 TWF was intended to secure that a minimum proportion of viewing time (10 percent) is reserved to European works created by independent producers, or alternatively that a minimum programme budget is allocated to independent productions.
The EC was undoubtedly keen to preserve these quotas (Attentional et al., 2011; Burri, 2007) and thus to make them permissible at the international level (Burri, 2009). Generally, the EC sought to secure sufficient wiggle room for cultural policy measures to be taken at both Union and member state levels (very often under the influence of key players in the debate, such as, notably, France).
The EC pursued these goals by relying on a set of arguments relating to the specific qualities of cultural goods and services. This strategy has been typical of the EU's positioning in global governance debates bearing on culture and became truly fully fledged after the end of the cultural exception battle and in its conceptual and institutional transformation into a cultural diversity policy (Burri, 2010a). At its very basis, such a policy is built around the two-pronged axiom that some sort of additional regulation is indispensable in markets for cultural goods and services because they fail, and that the ensuing market failures can be corrected through state intervention.6 These economic rationales have been strengthened in the political context by an enduring negative attitude towards globalisation and its effects, including or even especially those upon culture (Cowen, 2002; Giddens, 2002; Held et al., 1999). More concretely, in the WTO setting, the cultural identity line has been prominent in the tactics of the EC - on the one hand, by emphasising the importance of the audiovisual industry to European identity and unity, and by highlighting the harmful effects of the American entertainment industry, on the other (Singh, 2008: 132-133).
The EC sought to ensure that in liberalising audiovisual services, their cultural specificities would be respected, by means of an annex (WTO, 1990a). Audiovisual services, defined fairly broadly, were to be exempted to a significant extent from the obligations of most-favoured-nation (MFN), national treatment and market access (WTO, 1990a) - that is, from the core non-discrimination duties and progressive liberalisation rationale, which underlie the entire multilateral trade system.
It is fair to say that the EC was not completely united in this approach and there were various opinions within it. France has been very proactive and a leading player; Germany and Britain were somewhat reluctant (Singh, 2008: 122-123). The European Commission (Commission), headed at the time by Jacques Delors, acted as a strong policy entrepreneur, reflecting as well as shaping the views of the member states (Levy, 1999; Ross, 1995: 115; Singh, 2008: 127). The framing of the audiovisual services issue matters because giving a particular behavioural profile to the EU on the international scene has had a positive feedback effect and boosted European cultural identity (Goff, 2000, 2007; Singh, 2008: 133-134). It is also to be acknowledged that the institutional design of the EU has had a clear impact on international trade negotiations intended to change the European policy status quo - Meunier argues that in such 'conservative' cases, unanimity voting and restricted delegation make the EU a tough bargainer, so that the negotiating opponent cannot obtain more than what the most conservative EU state is willing to concede (Meunier, 2000), which in the present case is clearly France.
The US, heavily lobbied by the entertainment industry (Grant and Wood, 2004: 352-376; Singh, 2008: 134-138), matched the European offensive. The US was opposed to any cultural exception, regardless of whether the exception was part of the overall framework agreement or confined to audiovisual services. Its strongest argument was that of disguised protectionism, especially considering the intrinsic difficulty of defining 'national' and 'culture'. It also stressed consumers' freedom of choice, as well as other positive effects of free trade in cultural products (WTO, 1990b). Being cautious about pushing too far on the cultural identity issue, the US had been consistent in framing the whole debate as one of trade not culture (Singh, 2008: 134-135).
Owing to the extreme political charge of the trade and culture debate, the audiovisual services quandary almost turned into a stumbling block for the entire multilateral trade agenda (Graber, 2004), which had been designed as a 'single undertaking' and accordingly demanded agreement by all on all issues. One must at the same time also bear in mind that the audiovisual sector was only one deal amongst many, and there were trade-offs and other interests within the WTO bargaining process and outside it (Braithwaite and Drahos, 2000; Singh, 2008). So, it would be wrong to isolate this contestation of trade and culture, as it should be seen in the context of both grander international cooperation deals, as well as of specific domestic circumstances and their historical evolution, such as for instance those related to the perceived role of France in culture (Meunier, 2001, 2006).