Is Free Trade selling out the Arts?

By Robyn Ayres, Executive Director of the Arts Law Centre

First published in ART+law March, 2003

You may well ask what has free trade got to do with the arts and the answer is, a lot…. at least potentially. The Australian Government is currently involved in negotiations in relation to international free trade which have the potential to significant impact upon the cultural life of Australia. The first round of talks for the free trade agreement with the US commence in mid March and the Australian Government is required to make its “offers” in relation to the General Agreement on Trade in Services (GATS) by the end of March.

So what have these negotiations got to do with the arts? Both the US Free Trade Agreement (USFTA) and GATS have the potential to limit the ability of the Australian government to implement cultural policies and programs which support and foster the arts in Australia. This means that the government, in making a free trade deal today, could restrict itself and future Federal and State governments from continuing some of the mechanisms currently in place that support the arts in Australia. These could include tax concessions for Australia filmmakers, funding for Australian art galleries, quotas of Australian content on television, grants for Australian artists, and funding for Australian art organizations, to name but a few.

Globalisation should mean that in Australia we have increasing access to artists and cultural products from overseas and in turn other countries have increasing access to our art and culture. Whilst most people support the exchange of cultures and regard it as an enriching experience, the reality is that the exchange is not always a two way street. A good illustration of this is the dominance of the American film industry in the Australian market.

Between 1994/95 and 1999/00 exports in film, television and video programs from Australia rose from $99m to $175m while imports increased from $462m to $683m. Over 60% of these imports were from the US.[1] In terms of feature films over 250 films are released into the Australian market each year, of which 70% are from the US, 10% are Australian and the rest are from the UK, Europe, Asia or elsewhere.[2] Australian films took 8% of box office receipts whereas the US share of the box office was 83%.[3]

The Australian government has recognised that market forces alone are not enough for  our cultural organisations and individuals to be self-supporting. We therefore have in place different methods of government support, by way of grants, subsidies, quotas, regulations and tax concessions, which assist creative activities in Australia to develop and flourish.

There is an argument that by seeking to protect our own culture we are isolationist. As Sheila Copps the Canadian Minister for Cultural Heritage recently said

(B)y promoting cultural diversity we are protecting the right of all cultures to express themselves, but also to enrich other cultures with which they are in contact. We are protecting the right to say who we are, what we want, what our dreams are, and what fills our imagination, each in our own way. Those who prefer to see things in the cultural sector from a strictly economic point of view sometimes see our common goal as a type of protectionism. Nothing could be further from the truth, because protecting our own culture does not prevent us from being open to the world’s cultures.[4]

Free Trade Agreement

In the lead up to the USFTA talks, the US has made it clear that there are certain government restrictions in place in Australia which they want removed. Areas of concern that the US is likely to raise include audio-visual services (includes filmmaking and music recordings), e-commerce, telecommunications, and intellectual property rights.

In some of these areas, such as e-commerce and telecommunications, it is not immediately obvious what impact it would have on Australian culture. In the e-commerce area Australia has a fledgling digital content industry producing content and software applications in the areas of education, entertainment and ecommerce. These industries are both commercial and cultural. There are concerns that a FTA may lead to restrictions on government support for this emerging industry.[5] In the telecommunications area the dividing line between telecom and cable are increasingly blurred and there are concerns that this will be used as a back door way of extracting concessions in relation to cultural content carried, particularly in relation to audio visual services. Decisions to remove restrictions in these areas may prevent the government from introducing policies and programs that ensure diversity of cultural content (including support for Australian content).

General Agreement on Trade in Services (GATS)

GATS is one of the agreements of the World Trade Organisation (WTO). It came into force in 1995 and provides a framework of rules for international trade in services. [6] The objective of GATS is to achieve a higher level of liberalisation in the trade in services. There is also a firm timetable in place in which to achieve progressive liberalisation. GATS is very broad in its scope covering all aspects of what are regarded as services (from health to hairdressers, funeral directors to high tech transmission of data). And whilst many artists may not agree, all forms of artistic expression are considered services as defined by GATS.

GATS works by governments making commitments on the economic sectors to which they explicitly agree that GATS will apply.[7]  Once a government makes a commitment under GATS, the government cannot put restrictions on the supply of the service nor can they discriminate against foreign-owned service providers. This means there can be no special treatment for Australian service providers e.g. by way of grants, subsidies or other means of financial support.

From 1995, many governments around the world have argued that since they did not commit to apply the GATS provisions to the cultural sector, there is a de facto “cultural exemption”. However there are very serious concerns that there is a strong push from some countries, notably the US, to include cultural services in GATS and for the elimination of many support measures used to promote local film, music and television.

Australian Coalition for Cultural Diversity

Arts Law is a member of the newly formed Australian Coalition for Cultural Diversity (the ACCD) which is a coalition of Australia’s leading cultural professional organisations which have come together to provide a strong voice to the Government on trade issues. The ACCD includes representatives from music, film, writers, book publishing, libraries, museums, dance, multimedia and visual arts. The primary aim of the ACCD is to promote the rights of individuals to participate in and give expression to his or her own culture and that this should be supported by the Government. In order to do so the ACCD says that the Australian government should be free to adopt the policies that are necessary to support the diversity of cultural expression in Australia.

The ACCD has made submissions to the Department of Foreign Affairs and Trade in relation to both the USFTA and GATS, calling on the Federal Government to negotiate a broad exemption for cultural industries, and to allow it to continue supporting and fostering Australian cultural expression unfettered by the constraints of trade agreements.[8]

International Convention on Cultural Diversity