Canadian Cultural Policy and the NAFTA: Problems Facing the U.S. Copyright Industries

By Hedley, Hale E. | The George Washington Journal of International Law and Economics, January 1, 1995 | Go to article overview

Canadian Cultural Policy and the NAFTA: Problems Facing the U.S. Copyright Industries


Hedley, Hale E., The George Washington Journal of International Law and Economics


I. INTRODUCTION

Since the early part of the twentieth century the Canadian government has singled out the so-called cultural industries for special treatment.l The special status accorded these Canadian enterprises has been a focus for debate over U.S.-Canadian trade issues. This Note first examines Canadian efforts, both current and historical, to preserve cultural industries. This policy has been implemented in large part through Canadian legislation and regulation of different aspects of its foreign trade such as tariffs, taxes, foreign investment restrictions, and content requirements that overtly discriminate against U.S. cultural industries.

Second, this Note examines how the Canadian government has circumvented the "national treatment" aim of the North American Free Trade Agreement (NAFTA)2 with respect to cultural industries. Pursuant to its policy of safeguarding these industries, the Canadian government first negotiated an exemption to the principal of national treatment in the NAFTA.3 The cultural industries exemption (CIE) is a carry-over from the United States-Canada Free Trade Agreement (FTA).4 Through this exemption Canada is able to discriminate against corresponding U.S. cultural industries for any reason without being subject to the NAFTA enforcement procedures. This Note details the negotiations surrounding the CIE in both the FTA and the NAFTA, including the four exceptions to the CIE. This Note recognizes that the CIE and the implementation of Canada's cultural policy are the result of a validly negotiated exception to the "national treatment" aim of the NAFTA. Nevertheless, this Note provides a recent example where, even under the CIE exceptions, Canadian policies help to create a politically sanctioned, economically motivated, nontariff trade and entry barrier to vital U.S. copyright industries.

Third, this Note looks at the industries most affected by the CIE. U.S. cultural industries produce some of the most popular trade assets, not only in North America but throughout the world.5 These largely copyright-based industries accounted for over three percent of the U.S. gross domestic product and over thirty-four billion dollars in foreign sales in 1990.6 This Note details the unilateral trade remedies, both existing (such as section 301 ) and proposed (such as mirror-image legislation) that could be used to guard these vital industries from Canadian cultural protectionism. This Note discusses the multinational treatment of certain U.S. copyright-based industries under the Uruguay Round of the General Agreement on Tariffs and Trade (GATT).7

Fourth, this Note analyzes the exceptions to the CIE, looks at alternatives for U.S. cultural industries, and discusses the implications for multilateral trade agreements.

Finally, this Note calls for utilization of trade-based and legislative measures to protect U.S. cultural industries and stresses that the CIE should not be permitted to set an adverse precedent for the treatment of U.S. copyright industries abroad.

II. PROTECTING CANADIAN CULTURE: BACKGROUND

It has been said of culture in Canada that "[n]o country in the world is as influenced by a neighbor as Canada is by America. All other countries usually have a balance in population, different languages or other factors that act as buffers. In North America you've got a giant elephant beside a mouse."8 A commentator for Canada asserts that "keeping Canadian culture alive for the next generations is not a question of dollars. It becomes `entirely a matter of political will!' "9

Prior to the existence of a free trade agreement between the United States and Canada, cultural industries in Canada had to be subsidized due to the relatively small size of the Canadian market and the overwhelming influence of the United States.10 To help their domestic industries, the Canadian government also implemented restrictive trade legislation11 and regulations that ensured minimum Canadian content of radio and television programming and motion pictures. …

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Canadian Cultural Policy and the NAFTA: Problems Facing the U.S. Copyright Industries
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