Australia-United States Free Trade Agreement

The first draft of the Australia – United States Free Trade Agreement (FTA) (concluded on 8 February 2004) was released to the Australian public on Thursday, 4 March 2004.

Unlike the earlier Australia – Singapore Free Trade Agreement, there is no broad exemption for cultural services in the FTA.  The Singapore approach leaves Australia free to maintain existing intellectual property (IP) and audiovisual regimes and to change them.  The FTA approach is basically the opposite  For instance, while Australia’s existing cultural commitments have been maintained, Australia’s ability to introduce new, more protective, measures for audiovisual services has been restricted.  In particular, whether Australia can ensure adequate Australian program content in the future, irrespective of the mode of program delivery, is unclear.  A number of the FTA’s provisions also require our IP laws and practices to change so that they are closer to corresponding US provisions that arguably support rights holders rather than users, and some of the changes, such as the copyright term extension, have been introduced when there is no evidence that they benefit anyone.

The general concern across all sectors of the cultural industry is that Australia’s approach to cultural issues in FTA (which was to have been largely the same as the Singapore exemption approach) has been altered without consultation with the industry, that the draft FTA lacks clarity on a number of key issues, and that FTA is not as positive, nor even as neutral, as the industry was led to expect.

Aspects of AUSFTA especially relevant to the arts sector

The services and investment provisions

These are the provisions that deal with local content in the Australian audiovisual sector. Their effect includes that:

• the current 55% local content transmission quota for programming on free-to-air analogue and digital (except multi-channeling) prime time commercial TV is maintained but cannot be increased.  Additionally, once lowered, levels can’t be reinstated;
• the current 80% local content transmission quota for advertising on free-to-air analogue and digital (except multi-channeling) commercial TV is maintained but cannot be increased.  Additionally, once lowered, levels can’t be reinstated;
• the current 10% pay-TV programming expenditure on Australian drama production is maintained, and this percentage may be imposed on arts, children’s, documentary and educational programs.  In relation to drama, the percentage can be increased to a maximum of 20%, but only after consultation with the US;
• subject to certain conditions, Australia can also maintain measures, and introduce new measures, in relation to:
• transmission quotas for multi-channeled free-to-air commercial TV and free-to-air commercial radio broadcasting but conditions are attached;
• ensuring that Australian content on interactive audio or video services or both is not unreasonably denied to Australian consumers.  Do these services include digital services such as e-cinema?;

1. broadcasting licensing and spectrum management; and
2. tax concessions for investment in Australian film and TV production.
3. Australia may maintain existing co-production arrangements and introduce new co-production arrangements.

• A party’s ability to provide public services, subsidies and grants is not restricted.

The IP provisions

These provisions cover copyright and related rights, trade marks, including geographical indications, domain names, industrial designs, patents, regulated products and IP enforcement.  In relation to copyright, Australia’s obligations include:

• to extend the copyright term by about an extra 20 years to 70 years from publication of a film or sound recording and 70 years from the death of an author in the case of works.  The extension will not apply retrospectively;
• within 2 years from the date that  the FTA enters into force, to further restrict the circumvention of effective technological protection measures;
• to subject some unauthorised activities concerning devices or systems that decode an encrypted satellite signal to civil and criminal penalties;
• to add further criminal penalties and procedures; and
• to limit an ISP’s liability for allegedly infringing material on its systems or networks so long as the ISP complies with specified conditions which may have the effect that ISPs remove material without proof of copyright infringement.

When does the FTA become effective?

According to the Department of Foreign Affairs and Trade (DFAT), FTA is unlikely to come into force before 1 January 2005.  Before it does:

• both the Australian and United States governments must complete their respective domestic approval processes;
• any necessary legislation must be passed in each country; and
• the governments must agree on the date for FTA’s entry into force.

Arts Law will continue to participate in the FTA debate, especially with other cultural organisations concerned by the concessions that have been made.