The bilateral cultural issues of the 1980s and 1990s between Canada and the U.S. centered on trade involving Sports Illustrated, Country Music Television, Borders Books, film distribution and satellite television. These took place within the context of commitments in multilateral and regional agreements dealing with cultural trade issues. Except in the case of Sports Illustrated, the disputes were resolved in the political arena outside the provisions of either the World Trade Organization (WTO) or the North American Free Trade Agreement (NAFTA). The cultural exemption/retaliation provisions of the latter have yet to be tested. With the new millennium, some of the old issues remain but new ones have appeared.
This paper summarizes current and prospective issues and then focuses on two aspects of the topic. The first, the growing importance of foreign markets for the Canadian cultural industries, has received limited attention to date; the second is current, a proposal for an international agreement on cultural diversity to address the frictions that arise at the interface between domestic cultural policies and international trade and investment obligations. The two are related in that the thrust of the draft agreement is inconsistent with the direction being taken by prominent members of the Canadian creative community.
Historically, Canadian cultural policy has been inward looking, espousing ways to protect Canadians from inflows from the U.S. while at the same time being supportive of Canadian cultural producers. The rhetoric of cultural protectionism repeats the following phrases: promoting Canadian cultural sovereignty and identity; assuring shelf space for Canadian products; allowing Canadians to tell their stories to each other; countering the commercial advantage enjoyed by U.S. producers that have a large domestic market and dump their product into Canada; overcoming American discrimination against the consumption of foreign content; supporting Canadian ownership of producers and distributors in the pursuit of national sovereignty, unity and identity; asserting that Canadian owners will cross-subsidize the production of Canadian content; affirming that cultural content is unlike that of other goods and services and cannot be subject to traditional economic analysis; and maintaining that trade in cultural goods and s ervices should be exempted from trade agreements.
Most recently, this viewpoint has been expanded to include the need to protect and promote cultural diversity. Versions of this rhetoric can be found in the statements of those supporting existing Canadian cultural policies, and especially in the speeches of the Minister of Canadian Heritage and publications of this department. Seldom is an attempt made to evaluate whether the policies have achieved and are achieving their objectives. Elsewhere we have noted their deficiencies (Acheson and Maule, 1999, 329-48).
The nationalist rhetoric ignores some inconvenient facts. Canadian consumers often choose not to watch the content that is the result of subsidies and tax incentives, especially Canadian films and television drama programs. Audiences for the Canadian public broadcaster have been dwindling. Canadian private broadcasters, film distributors and book publishers have been rewarded handsomely for importing foreign content and fight to maintain this privilege. At the same time, some are active exporters and are anxious to sell further ownership to foreign investors. The system of subsidies has been subject to abuse, in some cases supporting the importation of non-Canadian material. And technology is undermining the effectiveness of measures like content quotas.
The U.S. rhetoric that counters the positive claims of cultural nationalism is that these industries are part of the entertainment sector of the economy that is governed by market forces. Whatever unique features the cultural industries have, they should be treated like any other industry as far as trade and investment negotiations are concerned; they should be subject to GATT (General Agreement on Tariffs and Trade) commitments for goods and GATS (General Agreement on Trade in Services) commitments for services trade. …