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Transcript of Chapter Seven_PhD_Terry Flew
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Chapter Seven
Globalisation, International Trade Agreements and
Australian Media Policy
Globalisation and International Trade Agreements
Globalisation is a complex and multi-faceted concept. It has been argued in this
thesis that it incorporates elements such as: international flows of goods, services
and capital; international movements of people; international communications
flows; the global circulation of images, ideas and cultural forms; the development
of regional and multinational economic groupings; the growth of international
non-government agencies; and the growing significance of international law and
treaties to the activities of national governments. It is the latter issue, which has
also been termed the internationalisation of domestic law, that will be the focus of
this chapter, with particular reference to the significance of international trade
treaties to forms of national media and cultural policy in Australia. The
internationalisation of domestic law involves a process whereby the traditional
sovereignty of nation-states to determine the legal rules operative within their
own territory is increasingly subject to trends towards the national adoption of
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rules and regulatory regimes formulated by supra-national institutions for
adoption by nation-states (Mason 1996: 1).
Globalisation can be understood both as a way of describing a substantive
series of trends towards greater international movements of economic, human and
cultural forms, and as a discourse that constructs a particular relationship between
nation-states, national policies and these international movements.
Communications media have a particular significance in relation to processes of
globalisation, since they constitute the technologies and service delivery platforms
through which international flows are transacted. Moreover, converging media
industries have been leaders in the push towards global expansion and integration,
and the global media provide informational content and images of the world
through which people seek to make sense of events in distant places.
The globalisation of communications media also has an important impact
upon the ways in which media is conceived of as both a cultural form and an
object of policy. In particular, since the globalisation of communications media is
tied up with the growing international trade in media as commodities, it tends to
accentuate the degree to which questions concerning media are framed within
economic discourses, and challenges alternative conceptions of media, such as
those which stress its role in the formation of a distinctive national culture. In the
previous chapter, it was observed how the reform of broadcasting legislation in
Australia in the early 1990s became increasingly tied up with the agenda of
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microeconomic reform, as communications networks were perceived as
increasingly central to national economic performance. It also became
increasingly tied up with international treaty obligations, such as those arising
from Section 160(d) of theBroadcasting Services Act1992.
While globalisation draws attention to the acceleration of international
economic and cultural flows, there is a need to avoid seeing such developments as
being without historical precedent, or as destroying the decision-making capacity
of nation-states. There is also a need for caution in associating such trends with a
move from national to post-national cultures, or to accept a singular logic to the
trajectory of globalisation. The case of Australian broadcasting is significant in
this regard, since in some respects Australian broadcast media were more national
in terms of their content in the late 1990s than they were 30 years ago. Such a
nationalising of Australian broadcast television content was a result of
intersections between the local production industry, network programming
strategies, competition from imported material, and national cultural policies such
as the Australian content quotas for commercial free-to-air television. This notion
of a regulated national cultural space for Australian broadcasting is, however,
challenged by new delivery technologies such as cable, satellites and the Internet,
new services such as pay television, and by the application of international laws to
national regulations. It is also challenged by the rise of policy discourses that
stress the virtues of openness to international competition and the dangers of
regulatory approaches that minimise exposure to outside influences. These trends
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intersect with developments in international trade law such as the demand for
liberalisation of trade in services, as well as the opening up through national
competition policy of sectors that have traditionally had some degree of
protection from international competition.
Globalisation and Citizenship: Concerns about International
Trade Agreements
In terms of citizenship discourses, and their relationship to cultural policy,
international trade agreements present three issues of particular concern. First,
there are concerns that the processes which lead to the adoption of binding
multilateral rules, and the creation of regulatory regimes that are transnational in
character, erode national sovereignty and exclude the majority of the national
community from decisions which materially affect them. Second, there are
concerns about the treatment of culture as a commodity, to be bought and sold
internationally like any other industrial product, and whether the creation of a
regime promoting free trade in cultural goods and services is antithetical to the
maintenance of distinctive national cultures. Finally, there is the critique of
cultural domination, which recognises the symbolic dimension of audiovisual
product and its relationship to the formation of national identities, and argues that
national sovereignty over this audiovisual space is threatened by the soft power
of material exported by the US media and cultural industries.
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In the second and third cases, economic and cultural issues overlap around
the concern that the United States can use its economic advantages and political
power in the audiovisual sector to undermine national cultural industries and
cultural policy. This was a major animating concern of the European Community
in negotiations leading up to the signing of the General Agreement on Trade in
Services (GATS), that was a part of the Uruguay Round of GATT negotiations
concluded in Marrakesh in 1994 and continues to be an important element of
GATS negotiations. Marc Raboy has expressed concern that the globalisation of
communication policy is:
a harbinger of both a certain global regulatory system in communication
and a future system of world governance. It is an imperial project, with
enormous implications for the future of democracy, insofar as it is based
on political decision making at a level where there is no accountability, the
recognised autonomy of private capital, and the formal exclusion of the
institutions of civil society (Raboy 1999: 300).
Sir Anthony Mason, Chief Justice of the High Court of Australia, has
observed that the very nature of negotiating processes concerning international
treaties often precludes open consultation processes, since:
No government engaged in a negotiation relishes the prospect of
making public its objectives and intentions; to do so deprives it of
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flexibility to manoeuvre and may inhibit its ability to assemble a coalition
of forces among nations with very different interests. (Mason 1996: 26)
Such a trend generates the danger of what Anthony Giddens (1998: 71) has
termed a democratic deficit:
The movement towards international regulatory regimes presents a
practical challenge not only to national sovereignty and autonomy but also
to democratic values. If critical decisions on major questions having an
important impact on domestic affairs are to be made by supra-national
institutions or in supra-national forums, national democratic processes will
be distanced from the decision-making procedures. (Mason 1996: 13)
Mason argues that national interest arguments presented by bureaucratic
negotiators in multilateral forums cannot be allowed to prevail over democratic
imperatives, as they have produced a negotiating culture that focuses upon the
desire to see Australia as a significant actor on the international stage, without
giving close attention to all the ramifications a treaty may have for sectional
interests in Australia (Mason 1996: 27). The issues raised are similar to those
observed by Stephen Korbin (1998) around the clash of globalisations, between
those who see multilateral agreements as providing simplification and greater
certainty to transactions in an already globalised economy, and those who see
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such arrangmenets as a major and immediate threat to democracy, sovereignty,
the environment, human rights, and economic development (Korbin 1998: 98).
Concerns about the treatment of culture as a commodity, to be bought and
sold internationally like any other industrial product, have been a recurrent theme
in debates about globalisation and international trade negotiations in the cultural
sphere. As the concept of culture has been democratised to incorporate all aspects
of a way of life, including popular cultural forms such as film and broadcast
media, the concept of cultural industries has been used less in a pejorative sense,
as in the original formulation of the term by Adorno and Horkheimer (1977), and
more in the descriptive sense defined by Garnham as:
the production and circulation of symbolic meaning, as a material process
of production and exchange, part of, and in significant ways determined
by, the wider economic processes of society with which it shares many
common features. (Garnham 1987: 25)
The audiovisual sector is, by this definition, the ideal type cultural
industry (Sinclair 1996: 38) since, as Schlesinger points out, the audiovisual is
both a symbolic arena and an economic one (Schlesinger 1987: 228). This does
not prevent periodic appeals in debates about international cultural trade to
sacred injunctions of culture as something that is necessarily above commerce
(Schlesinger 1991a; Klamer 1996). More commonly, concerns about the treatment
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of culture as a commodity in international trade agreements have mixed an
awareness of the dual nature of culture with a concern about unfair United States
advantage in international audiovisual markets. Knight defines the dual nature of
culture in these terms:
On the one hand, a nations culture is the expression of its values, beliefs
and perspectives and is necessary for the preservation of a healthy
democratic community. On the other hand, culture and entertainment are
big business. This business is increasingly export-oriented and is wrapped
up in issues surrounding the liberalisation of trade. (Knight 1999: 169)
The growing presence of cultural industries among the areas subject to the
disciplines of international trade liberalisation can be seen as marking a shift in
the focus of cultural policy away from non-economic defences of the value of
cultural industries, to a focus on content industries as drivers of growth in the
new economy. In the early 1980s, UNESCO defined the purpose of cultural
policy as being to establish conditions conducive to improving the means for the
expression and participation of the population in cultural life (UNESCO 1982: 9).
In the late 1990s, by contrast, the OECD was focusing on the implications of
content as a growth industry, where policy-makers must:
focus on how the network-based production and delivery of audiovisual
content will affect the regulatory issues traditionally attached to these
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services within the context of their policy commitment to expanding
markets for network-based content markets on the Global Information
Infrastructure (OECD 1998: 4).
Concerns about a turn from culture to industry in national audiovisual
policies are intensified, for their critics, by the fact that such discursive shifts are
part of a strategy to extend the United States economic domination of world
audiovisual markets. In particular, critics refer to the capacity of the United States
to exercise cultural hegemony on a global scale through the soft power attached
to US media and cultural exports. Joseph Nye, Assistant Secretary of Defence for
International Affairs in the Clinton Administration, defined soft power as:
The ability to achieve desired outcomes in international affairs through
attraction rather than coercion. It works by convincing others to follow, or
getting them to agree to norms and institutions that produce the desired
behaviour. Soft power can rest upon the appeal of ones ideas or the ability
to set the agenda in ways that shape the preferences of others. (quoted in
Thussu 1998: 66-67)
Such cultural concerns have been amplified by a sense that the global audiovisual
playing field is not level, but is rather tilted towards the interests of its dominant
player, the United States. In his comprehensive overview of factors underlying the
international popularity of Hollywood cinema, Tom ORegan has noted that US
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dominance of the international film markets arises from two related economic
factors: the cumulative competitive advantages that arise from developing a
streamlined industrial system based upon the large-volume production and
distribution; and the combination of distribution and foreign policy that would
promote structural and economic arrangements [that] facilitate international
circulation of Hollywood films (ORegan 1992: 309). Footer and Graber (2000)
observe that the capacity of members of the Motion Picture Association of
America (MPAA) to control the marketing and distribution of films in the United
States and in a large number of countries in Europe, the Americas and the Asia-
Pacific (including Australia) may constitute an instance of anti-competitive
behaviour in the cultural industries that is not currently addressed by international
trade rules. The latter point is a reminder of what Miller (1996: 79) terms the
contingent moralisms that constitute framing devices for the negotiating
positions taken by competing parties in the process of developing binding
international agreements.
The General Agreement on Trade in Services (GATS) and the
United States/Europe Audiovisual Trade Dispute
The General Agreement on Tariffs and Trade (GATT) was a multilateral
agreement signed by 23 countries in 1948, including Australia, and was one of a
series of international economic institutions and agreements put together under
US leadership after the end of World War II.1The principle underpinning these
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post-World War II international economic institutions was that international
economic disorder had contributed to World War II, and that global economic
coordination, implicitly under US leadership, was a condition for minimising the
prospects for future conflicts. While the GATT did not eliminate trade barriers, it
established a set of mechanisms that would enable their progressive reduction
over time. It did this partly through a series of global trade rounds, where GATT
members would meet and reach agreement to reduce tariffs and other trade
barriers through bilateral and multilateral negotiations. The GATT also set in
place a momentum for trade liberalisation by establishing a set of guiding
principles for trade policy:
Reciprocity: if one country lowers its tariffs against anothers exports,
it can expect the other country to lower its tariffs in return;
Non-discrimination: countries should not grant one nation or group of
nations preferential trade treatment over others (also known as the
Most Favoured Nation principle);
Transparency: countries are urged to replace non-tariff barriers with
tariffs, or taxes placed upon imports, and to agree to bind the tariff, or
not to increase it further;
National treatment: foreign suppliers are to be treated no less
favourably than domestic suppliers once acquiring market access.
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The GATT is regarded by many as a contributing factor to post-1945
world economic growth, with an expansion of world trade of 500 per cent
between 1950 and 1975 (compared with growth in world economic output of 220
per cent), and a decline in the average tariff on manufactured goods in member
countries from 40 per cent in 1947 to 5 per cent by 1990 (The Economist1990: 7).
Particularly important elements of the GATT have been the way in which
incentives to reduce protection over time are built into the framework, and that the
multilateral framework allows smaller trading nations to benefit from agreements
established between the major trading powers. At the same time, international
services trade had not been a part of the original GATT framework, and when the
Uruguay Round of multilateral negotiations commenced in 1986, it was not on the
agenda for discussion. It emerged as a new issue for GATT negotiations in 1987,
alongside trade-related intellectual property rights (TRIPS) and trade-related
investment measures (TRIMS). With world services exports totalling about $US1
trillion in 1992, accounting for one-fifth of world exports, and with an annual rate
of export growth of 15 per cent between 1982 and 1992, compared with annual
growth of 9.8 per cent for merchandise exports over the same period, it was
apparent that any commitment to trade liberalisation would have to incorporate
international trade in services. Schott and Buurman (1994: 99) observed that the
United States was the demandeurof the services negotiations in the GATT, since
it was the worlds leading exporter of services, with exports in 1992 totaling
US$162 billion and imports US$108 billion in 1993.
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The services sector was undergoing rapid changes during the 1980s and
1990s, particularly in areas such as finance and communications, with the
development of new technologies and new services, and government policies
designed to make the sectors more internationalised and market-oriented.2In the
communications services sector, the telecommunications sector was the primary
driver of change, with strong pressures worldwide to move from a system
characterised by national regulations to manage competition in order to meet
public service obligations, towards a system based upon trade liberalisation,
value-added services, open access to networks, and competition between national
and international service providers. Alan Oxley observes that a domestic
regulatory framework that was compatible with the trade liberalisation principles
of the GATT would need to: encourage new entrants into the sector; reduce the
number of activities subject to regulatory constraint; achieve greater transparency
in the provision of universal service obligations; and ensure that incumbent
service providers did not engage in anti-competitive practices in providing access
to the network for new service providers (Oxley 1991). The need for new rules
and regulations for international telecommunications trade was driven not only by
the pace of growth and change in the sector, but also by the growing significance
of information networks and facilities as a strategic resource in information-based
economies, reflecting the dual role of telecommunications as both a traded
product and service in its own right, and as a facilitator of trade in other products
and services.
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Extension of these trade liberalisation principles to audiovisual services
would, however, prove to be one of the major areas of disagreement in
multilateral negotiations leading to the GATS. Unlike telecommunications,
national regulations in broadcasting and related areas, such as film, have been
concerned with content as well as market structure and infrastructure and, unlike
most areas covered by the GATT, have possessed a cultural and informational
dimension. The question of whether a cultural exception should exist for films
and television programs has a long history in the GATT,3 and has been a
particularly significant area of conflict between the United States and European
nations, most notably France. In its initial drafting in 1948, Annex IV of the
General Agreement on Tariffs and Trade was included at the request of nations
with domestic film quotas. It stated that For cultural reasons, systems of aid to
the production of printed films for cinema exhibition may be maintained provided
they do not significantly distort international competition in export markets.
Attempts by the United States in 1962 to use the GATT to address barriers to
trade in television programming were rejected by the GATT, on the grounds that
even where television was not State owned, government had quite properly taken
a special interest because of televisions importance as a cultural and
informational medium (GATT 1962).
The key elements of the GATS that would have an impact upon the
conduct of domestic audiovisual policies were:
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Article II Most-favoured-nation treatment, whereby Members are
required to accord immediately and unconditionally to services and
service suppliers of any other Member treatment no less favourable
than that it accords to like services and service suppliers of any other
country; 4
Article XVI Market Access, which requires that each Member shall
accord services and service suppliers of any other Member treatment
no less favourable than that provided for under the terms, limitations
and conditions agreed and specified in its Schedule. This Article also
requires that, if the cross-border movement of capital is an essential
part of the service, the Member is required to permit such capital
movements;
Article XVII National Treatment, which requires that each Member
shall accord to services and service suppliers of any other Member, in
respect of all measures affecting the supply of services, treatment no
less favourable than it accords to its own like services and service
suppliers.
Other areas of the GATS that were of potential significance included Article VI
Domestic Regulation, which limits the capacity to set technical standards or
licensing requirements in ways that restricted the capacity of other Member states
to supply a service into a Member country; Article VIIRecognition, requiring that
forms of education and experience acquired in order to supply a particular service
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in one country should be recognised in that of another, through common
international standards where possible; and Article XV Subsidies, seeking to
minimise the trade-distortive effects of domestic subsidies on the capacity of
suppliers from other Member states to compete in that countrys service markets.
The EC member states led the campaign to restrict the impact of the GATS
on audiovisual services in the Uruguay Round. European concerns with the
potential impact of free trade in audiovisual product on domestic industries and
national cultures are multifaceted. In 1995, the United States had a surplus of $6.3
billion in its audiovisual trade with the European Commission, and US films
accounted for between 60 and 90 percent of market share in EC member nations
(Schlesinger 1997; OECD 1998). Cultural and linguistic barriers between EC
member states have constituted a barrier to intra-European audiovisual trade,
which would give member states the economies of scale to compete with high-
budget US product. It is estimated that, in 1990, less than 10 per cent of
programming made in one EC nation was viewed in another member state
(Kaplan 1994: 304), in spite of various EC-initiated attempts to develop pan-
European television networks and audiovisual content (Collins 1998). In such an
environment, as Toby Miller notes, US content has established itself as an
entertainment other alluring precisely because it has the weight of Europe
against it, and benefiting from competition that would not be present without the
subsidised screen (Miller 1996: 80).
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The issues are wider than those of industry viability, and incorporate
important elements of political and cultural sovereignty. It has been argued by the
Europeans that their audiovisual media ecology is distinctive, as it is based around
public service broadcasting, state cultural policy initiatives to cater for cultural
and linguistic diversity within the nation-state, and a formative role for media in
the development of citizens (EC 1998). In some European nations, most notably
France, cultural concerns run much deeper. For the French, the hegemony of
Hollywood is seen as constituting a mechanism whereby the significance of
French language and culture is being diluted, both within France and
internationally. The idea that the United States was using international trade
forums to promote free trade in audiovisual services is seen as the latest
manifestation of American cultural imperialism (Palmer 1996: 36). Former
French President Francois Mitterand argued in the early 1990s: Who can be blind
today to the threat of a world gradually invaded by an identical culture, Anglo-
Saxon culture, under the cover of economic liberalism?. Similarly, the French
Minister for Culture under the Mitterand government, Jack Lang, had called for
genuine cultural resistance to financial and intellectual imperialism (quoted
in Miller 1996: 72).
Such European concerns culminated in the European Communitys
Television Without Frontiers Directive of 1989, which set a European works
program content quota of 50 per cent, binding upon all EC members. Through the
Television Without Frontiers doctrine, the EC sought to liberalise audiovisual
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trade and Europeanise audiovisual content among the EC member states, while
strengthening barriers to content from outside of the EC, most notably the United
States. US trade negotiators considered the Directive to be nothing more than
economic protectionism couched in cultural language (quoted in Kaplan 1994:
302), and sought to have the Directive struck down as contrary to the non-
discrimination principles of the GATT. EC negotiators responded, first, by arguing
that television was a service and not a good and, second, as services increasingly
came within the GATT framework, for a cultural exception to be granted to
audiovisual services. The EC negotiators drew upon the North American Free
Trade Agreement (NAFTA), and the exclusion of cultural industries that Canada
had negotiated under Article 2005 of the Agreement (Acheson and Maule 1998).
In order to save the GATT from collapse, in late 1993 US negotiators agreed to
disagree with the EC on whether the status of films and television programs was
primarily commercial or cultural, leading to exclusion of audiovisual services
from the GATTs rules governing transparency and non-discrimination, and
extending this to new communications technologies as well as existing media, at
the conclusion of the Uruguay Round in Marrakesh in 1994.
This outcome was seen as a major political and ideological victory for the
EC, and for other participants in the GATS negotiations, including Australia, who
adopted the European understanding of films and television programs as integral
parts of a national and regional culture, rather than primarily as tradeable
economic commodities (Grant 1994; Footer and Graber 2000). It was achievable
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in part because, paradoxically, the member states of the EC acted as a collective
diplomatic entity, using arguments in defence of the Directive that extended the
claims of audiovisual content as central to the maintenance of a national culture
from the level of member states to that of Europe as a putative supranational
cultural entity. In this respect, it marks out a distinctive element in the
development of regional trade agreements and their relationship to cultural policy.
There has been a dramatic growth in regional trade agreements since 1985,
with 33 regional trading agreements being reached between 1990 and 1994
(Frankel 1997). In a survey of cultural industries policies in regional trading
blocs, Hernan Galperin (1999a) found that variations in treatment of audiovisual
industries within the regional trading agreement were shaped by:
Their industrial profile, or the distribution of economic and political
resources among the trading partners audiovisual industries;
Theirdomestic communications policies, or the regulatory framework
governing communications industries, and including audiovisual,
telecommunications and cultural policies;
The degree of cultural distance among member states, including
similarities/differences in language, audiovisual consumption habits,
and genre preferences. A relevant issue is also the degree of cultural
distance between those nations and other nations, most notably the
United States as the worlds leading audiovisual services exporter. For
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example, it is often noted that Great Britain is culturally closer to the
United States than to the nations of continental Europe.
In the case of NAFTA, Canada sought to exclude cultural industries from its
agreement with the United States, as an indicator of the relatively weak position
of its audiovisual producers in the English-language Canadian market, their
dependence upon proactive national cultural policy, and their very high levels of
exposure to US product. By contrast, Mexico has strong domestic broadcasters,
significant linguistic and cultural barriers to US material, and an audiovisual
policy increasingly oriented towards expanding exports into the Spanish-speaking
world, including Spanish speakers in the United States; it had no comparable
interest in a cultural exception.
The EC audiovisual strategy is based upon the possibility of creating a
single European market, enabling European producers to develop economies of
scale and scope comparable to those that provide US producers with a major
competitive advantage in international audiovisual trade. The strategy of
developing a unified European audiovisual space is problematic in light of the
significant cultural and linguistic barriers, or what Galperin terms the cultural
distance, that exists between the EC member nations. Schlesinger (1997) notes
four problems with the notion of a pan-European audiovisual or cultural space.
First, it is a product of official Europe, which is worried about America and
Americanisation [while] peoples Europe is not (Schlesinger 1997: 373).
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Second, the claim that European television programming is about culture in
contrast to American entertainment is questionable in light of the economic
strategies that underpin the creation of a European single market, and the fact that
European commercial broadcasting is no less about entertainment than that of the
United States. Third, in spite of claims to be promoting cultural diversity within
Europe, Schlesinger doubts that such policies will adequately service the
identities and meet the interests of cultural and ethnic minorities within EC
member states. Finally, identification with Europe as a supranational entity lacks
popular appeal within EC member states because, at least in part, European
political culture is thin, widely perceived among European citizens as being
characterised by elite brokerage, bureaucratism and legalism. As a result, Euro-
citizenship will struggle to overcome the seductive pull of the national [and]
the undoubted power of non-rationalistic elements of political and national culture
that confer a wider, non-deliberative sense of solidarity and belonging
(Schlesinger 1997: 387).
Two implications arise from these observations for the likelihood of a
cultural exemption being sustained by the EC member states, and other nations
with similar concerns about their cultural industries, such as Canada. The first is
that definitions of audiovisual media as a form of culture that is distinct from
other marketable commodities will be more difficult to sustain in a global media
environment characterised by strategies to make national media systems more
internationally competitive, and the extension of the WTO framework from goods
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television industries rather than a distinctively national aesthetic. Galperin
(1999b) has noted that the European audiovisual policy has fostered industrial
concentration while failing to democratise access to cultural resources within
European nations. Galperin has argued that the debate needs to shift from the pros
and cons of trade liberalisation in cultural industries, which he views as not
necessarily evil, to the relationship between the institutional structures of cultural
production and distribution and the normative goals of cultural policy and cultural
development:
Cultural development calls for new forms of government intervention in
the cultural arena, aimed not at protecting producers but at democratising
the use of communication resources. The real debate is not between
foreign versus local audiovisual products, but rather between a regulatory
regime for audiovisual markets based on the tenets of corporate liberalism
and the global competitiveness logic versus audiovisual policies aimed at
creating diverse and inclusionary cultural spaces within and across nation-
states. (Galperin 1999b: 73)
The GATS Debate in Australia
The debate in Australia about the inclusion of audiovisual services into the GATT
provides revealing insights into the different policy and debate cultures that exist
in Australian media policy, particularly in relation to matters of international
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treaty negotiations and trade policy. The Australian federal government, those
government departments concerned with international trade and economic
performance, and Australias trade negotiators at the GATT took to the
international trade in services negotiations in the Uruguay Round of the GATT
with enthusiasm. The development of multilateral rules promoting services trade
liberalisation was seen as consistent with Australian economic priorities to expand
trade, diversify exports and open up new sectors of the domestic economy to
greater international competition. As international trade in services emerged as a
significant policy issue in the late 1980s, the Industries Assistance Commission
was arguing that: If Australias domestic barriers to services trade are significant,
the gains from removing them could be quite large (IAC 1989a: 41), and that
Australia would benefit from the unilateral reduction of trade barriers [and]
should pursue a trade liberalisation course irrespective of the actions of other
nations (IAC 1989b: 86). The IAC and the Department of Foreign Affairs and
Trade (DFAT) were also flagging areas in Australian film and television where
policies to support the local production industry would contravene the principles
of the GATT, including local content quotas for broadcasting, local content
requirements for television drama, local content requirements for television
advertising, tax concessions for investment in Australian films, and direct
financial assistance available to Australian film producers through the Film
Finance Corporation (IAC 1989a: 40-41).
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For many in the film and broadcasting sector, this was a profoundly odd,
alienating and threatening discourse. In the area of cultural industries, Australia
had a deficit of about $1.25 billion in 1992-93 (Mableson 1995: 69), and a deficit
in trade in television programs that was $150 million in 1987-88 and $200 million
in 1997-98 (Productivity Commission 2000: 163). More important than the
figures, however, was a sense that the development of an Australian film and
television production sector had been a product of proactive regulation to promote
local production, and that this had been a significant milestone in Australian
cultural policy. The growing interest among some academics and analysts in
understanding media as cultural industries meant that an informed response to the
GATS round could be developed, that did not simply rest upon cultural
nationalism or dichotomies between economics and culture. One example of this
was the argument that local content regulations and subsidy arrangements for
Australian television were not primarily about defence of a national culture
through economic protectionism, but rather about ensuring the existence of a
limited local presence alongside the Hollywood product (ORegan 1992: 91), or a
safety net for local content (Cunningham and Jacka 1996: 224). ORegan also
argued that local content quotas for Australian commercial television did not
constitute a substantive barrier to the import of US programming, but were a
means of ensuring limited local production in import-competing genres such as
drama, where linguistic and cultural proximity to the United States made
Australian television one of the least protected and cosseted of international
television industries (ORegan 1993: 76). Australias situation in international
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television trade was therefore presented as being closer to that of English-
speaking Canada than France and other continental European nations.
Such arguments provided useful counters to the deregulatory and anti-
protectionist thrust which the GATT negotiations promoted in Australian
broadcast media policy debates. In particular, they strengthened the case for
Australian GATT negotiators seeking to exempt audiovisual services from the
conditions of the final GATS agreement. Jock Given, who was Policy Advisor to
the Australian Film Commission during this period and actively involved in these
negotiations, notes the importance of such hard intellectual work for the sector
to work out its common position, to accompany the easy rhetorical line of not
selling out to the Americans.5 This was important for two reasons. One was that
it enabled those in the film and television production sector to establish their
credentials in discussions with the Australian GATT negotiators, reflecting the
professionalisation of participation in a particularly arcane and remote field of
policy, but one with important practical consequences. As Given recalls:
The danger was always going down and talking to these people. You need
to be able to engage with where they were at, you needed to be able to talk
about sectoral annotations and MFN derogations, and all that sort of stuff
Their temptation was always to say, This is a really complicated and
difficult business, you really dont understand how difficult it is, and
weve heard you and thank you. You let us professionals go off and do it,
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it is a very complicated and difficult international negotiating job, I have
to be on a plane to Geneva in two hours, why dont you leave it to us. 6
The second reason why such hard intellectual work was valuable was
that it enabled a case to be made for exempting audiovisual services from
Australias final GATS commitments without rejecting the GATT framework
entirely, or presenting a case that smacked of special pleading. As Given notes,
Australian producers as a whole, including Australian audiovisual producers, have
an interest in the GATT framework of multilateral trade negotiations and trade
liberalisation. There was a need to acknowledge the viewpoint of the federal
government and Australian GATT negotiators that Australias interests would be
best served by a successful overall resolution of the Uruguay Round of GATT
negotiations, but this needed to occur in ways that keep the rules of the
agreement tough but allow flexibility in the extent to which countries are required
to apply the rules immediately.7 Given puts this point in the following terms:
We need the metropolis of the GATT. Its contribution to our economic
prosperity will be important not least because it is that prosperity which
pays the bills for cultural subsidy. We also need the GATT because, as a
small country, we are less vulnerable in an environment of multilaterally
endorsed trading rules than we are in the dog-eat-dog world of bilateral
trade wars. Especially in audiovisual services where its not so much dog-
eat-dog as T-Rex-eats-pups. (Given 1993: 4)
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Australia was among the majority of countries that did not make a
commitment to the GATS agreement in the audiovisual services sector, in effect
aligning itself with the EC, led by France, against the United States. It is
important to be aware, however, that it did not do so for the same reasons as the
EC countries. Whereas the European position was driven primarily by the desire
to protect and defend national cultural industries as pillars of a strong and
historically grounded sense of national cultural citizenship and identity, countries
like Australia were driven far more by the need for communicative boundary
maintenance and the existence of a local supplement alongside an assumed and
predominant import profile, and a culture [that] tends to be thought of as
emergent rather than as fully constituted (ORegan 1992: 91). Moreover,
countries such as Australia and Canada enter into such arrangements as exporters
as well as importers of audiovisual product, with a strong historical awareness of
the dynamics of trade in the global cultural economy. Such distinctions tend to be
lost in multilateral diplomatic forums such as the GATT, where countries as
diverse as Australia, Canada, France and Japan will line up together and speak in
the same broad cultural sovereignty terms against US pressures for audio-visual
trade liberalisation and an end to state production subsidization (ORegan 1992:
91). The distinction is important, however, when the interests of Australian film
and television producers are considered in the international political economy of
trade liberalisation. Given has argued that the cultural task of Australian content
regulation is not primarily to defend national culture from globalisation, but rather
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as our part of a global cultural intervention to maintain and enhance difference
and creative opportunity everywhere (Given 1993: 4).
Australias policy position towards local content rules to safeguard local
production and culture was inconsistent in the context of international
negotiations around liberalising trade in audiovisual services. In the late 1980s,
when international rules governing trade in services emerged as an item in the
Uruguay Round agenda, the Australian Broadcasting Tribunal was completing an
extensive inquiry that would support the necessity of Australian content
regulations for commercial broadcast television. At the same time, other arms of
government, such as the IAC and DFAT, were questioning the necessity or
desirability of such policies as a means of achieving the nations overall economic
and political objectives. More generally, Australias approach to the negotiation of
international trade treaties has been that of a high-profile free trade nation. As a
leading exporter of agricultural goods, the Australian government was
instrumental in establishing the 14-country grouping known as the Cairns Group
in 1986, promoting trade liberalisation in agriculture as part of the Uruguay
Round of GATT negotiations, and the Australian government welcomed the
development of a non-discriminatory, multilateral framework for international
trade in services.
Opposition to protectionism has been a dominant motifamong Australias
economic policy agencies since the 1970s, and a commitment to trade
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liberalisation has been politically bipartisan during this period, and in fact pursued
with most vigour by the Whitlam, Hawke and Keating Labor governments. Trade
liberalisation had become an area of policy activism among economists within
government, as well as among academic economists and in the financial media.
The influence of such arguments can be seen in the impact of domestic economic
policies that saw effective rates of assistance for manufacturing and agriculture
fall from relatively high levels in the early 1970s to near-zero levels by the end of
the century (see Table 7.1):
Table 7.1
Effective Rates of Assistance for Manufacturing and Agriculture in Australia
Year Manufacturing Agriculture
1970-71 36 281976-77 27 91986-87 19 191991-92 13 11
1996-97 6 n/a
Source: Snape et. al. (1998: 13).
This commitment was an unwavering characteristic of the Hawke and
Keating Labor governments in the 1983-96 period. They saw the Banana
Republic crisis of the early 1980s as requiring policies of microeconomic reform
and trade liberalisation, aimed at promoting an open, competitive and outward-
looking Australian economy. In the March 1991 industry policy statement,
Building a Competitive Australia, Prime Minister Bob Hawke argued that
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Australias self-interest is served by a steadfast refusal to return to the days of
protectionism (Hawke 1991), while Treasurer Paul Keating claimed that by the
end of the 1990s, Australia will have renounced once and for all the fallacious
doctrine that prosperity can be found behind the insular wall of protection
(Keating 1991).
Such statements received ample support from academic economists such
as Ross Garnaut and Kym Anderson (1987), who argued: (1) as a small economy
with a high dependence upon export revenues and capital inflow, Australia had a
strong prima facie interest in free trade; (2) that demands for assistance were
manifestations of a political market for protection, whereby organised interest
groups in import-competing manufacturing sectors could pursue sectional
interests through political lobbying, to the detriment of Australian consumers,
export industries and, over time, the national economy; and (3) that domestic
trade liberalisation would enable Australia to benefit from the economic boom
occurring in the Asia-Pacific, as Australian industries became more outward-
looking and export-oriented.8 Such gains, moreover, would be more than simply
economic. The influential report Australia and the Northeast Asian Ascendancy
(also known as the Garnaut Report) argues that relations with the countries of
Northeast Asia are of substantial importance politically and culturally as well
(Garnaut 1990: 6). For those involved in broadcast media and other cultural
industries, this dominant policy culture would introduce a new dimension to
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media policy discourse, and would require an understanding to be developed of
largely unfamiliar legal and policy areas such as international trade law.
Australian broadcasting had been founded on a Fordist regime of
monopolistic regulation (Aglietta 1987; De Vroey 1984), characterised by
relatively stable industry structures and corporate profit rates, and the primary
orientation of producers towards national economies. It had developed a political
economy, policy system and policy culture that were relatively stable and
routinised among the major institutional agents. The social contract between
commercial broadcasters, state regulators and production industry and public
interest groups, involving the redistribution of surplus profits through regulations
such as Australian content rules, was based upon the stable and highly profitable
distribution structure of the overall system. The question of how to respond to
international trade agreements was bound up with the issue of whether there
would be a shift in Australian broadcasting from a Fordist system, characterised
by universal access to all services, limited channel free-to-air broadcasting and
broad appeal programming, towards a new model, which has been termed post-
Fordist, of user pays and differentiated access, multichannel and converged
media services, and increasing specialisation and demographic targeting of
programming. In the absence of a significant constituency for change, as
illustrated by the belated introduction of pay TV, the drive for policy reform came
from the bureaucracy itself. The resulting incoherence and reluctance to be open
about policy settings was illustrated in the Project Blue Sky case, and the role
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played by the Broadcasting Services Act1992, drafted by DOTAC, in allowing
New Zealand programming to be classified as Australian content, under the terms
of the Closer Economic Relationship.
The Project Blue Sky Case: Bilateral Trade Agreements and
Australia-New Zealand Audiovisual Trade
The Australia New Zealand Closer Economic Relations (CER) Trade Agreement
came into force in 1983, although a more limited free trade agreement has been in
place since 1965. The CER required the gradual elimination of tariffs on all goods
not otherwise specified in an annex to the agreement (the negative list) within
five years, and a commitment to liberalise all import quotas and eliminate export
subsidies on goods traded between the two countries. A review of the CER in
1988 led to the signing of a Protocol on Trade in Services between the two
countries, which aimed to liberalise barriers to trade in services between the two
member states, expand trans-Tasman trade in services, and establish a rules-based
system to govern trade in services compatible with the rules of the GATT. The
Australian CER representatives listed limits on foreign ownership of broadcasting
and television as part of the negative list and thus exempt, but not, significantly,
Australian content rules for commercial free-to-air television.
This had the potential to place the Television Program Standard (TPS) 14
in jeopardy, and it pointed to a tension between the ABAs requirement under
Section 122 (2)(b) of the Broadcasting Services Act1992 to develop a standard
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for commercial television broadcasting licensees relating to the Australian
content of programs and the requirement under Section 160(d) that the ABA is
to perform its functions in a manner consistent with Australias obligations
under any convention to which Australia is a party or any agreement between
Australia and a foreign country. An Australian content standard that did not
include New Zealand content could be in breach of Article 5 of the Protocol on
Trade in Services to the Australia New Zealand Closer Economic Relations- Trade
Agreement, which required that Each Member State shall accord to persons of
the other Member State and services provided by them treatment no less
favourable than that accorded in like circumstances to its persons and services
provided by them.
What followed was an acrimonious series of legal actions in the Australian
Federal and High Courts, initiated by sections of the New Zealand audiovisual
industry, which established Project Blue Sky in 1993 in order to argue that
Australian content regulations contravened both Section 160(d) of the
Broadcasting Services Act1992 and the CER. The initial judgment in the Federal
Court by Justice Davies found in favour of Project Blue Sky, finding that the 1995
Australian Content Standard set by the ABA had contravened Section 160(d) of
theBroadcasting Services Act 1992, by being in breach of the Protocol of Trade in
Services of the CER.9The ABA successfully appealed this finding before the Full
Federal Court in 1996, with the majority judgment of Justices Wilcox and Finn
determining that the ABA faced an impossible task in reconciling the specific
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requirement of Section 122 (2)(b) and Section 160(d) of the Broadcasting
Services Act 1992, and that a New Zealand program is not an Australian
program, since Australian content [was] something particular to this
country.10 This finding was overturned in an appeal to the High Court of
Australia, which found in favour of Project Blue Sky, and required the ABA to
modify the Australian Content Standard accordingly, on the basis that Sections
122 and 160 are interlocking rather than conflicting provisions, and that the
power conferred by Section 122 must therefore be exercised within the
framework imposed by Section 160.
11
An interesting element of the finding was
Chief Justice Brennans argument that the Australian content of a program was
the matter in which Australian ideas find expression, and that this was not in
itself guaranteed by the provenance of the program, or its being under Australian
creative control, which reopened issues about whether regulatory agencies should
set laws to guarantee the Australianness of a programs content (Leiboff 2000).
This thesis will not dwell upon the validity of the High Court of
Australias legal judgment, other than to note, with Leiboff (1998, 2000), that the
judgment is an adverse one for those seeking to argue in law in favour of cultural
arguments where they are potentially in conflict with economic understandings of
the nature of a service. The failure to include Australian content rules for
broadcasting on the negative list of the Protocol on Trade in Services to the
Australia New Zealand Closer Economic Relations Trade Agreement, despite the
clear preferences of the local production industry for such an exemption, has been
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viewed with great suspicion by some within the media production sector. Both
Anne Britton and Christina Spurgeon have claimed in interviews with the author
that they had received guarantees that broadcasting services would be exempt
from CER provisions, and that s. 160(d) of the Broadcasting Services Actwas
intended to address different kinds of treaty obligations, such as human rights,
labour or environmental standards. Both believe that members of the Department
of Transport and Communications were sneaky in claiming that there would be
an exemption for broadcasting services to industry and public interest
representatives, but then claiming that it was not included due to an oversight, or a
bureaucratic stuff-up.12 The extent of uncertainty in the legislation about
whether the CER had primacy over the Australian Content standard was indicated
by the so-called riding instructions given by the Minister for Transport and
Communications, Bob Collins, to the then ABA Chair, Brian Johns, asking him to
look at the treatment of New Zealand programs under the new Act as a matter of
priority (Given and York 1996: 18).
The other major question arising from the Project Blue Sky case involves
the merits of the arguments put by Australian representatives for exemption of
broadcasting services from CER provisions, and the case put by New Zealand
representatives for their inclusion. Gareth Grainger, Deputy Chair of the
Australian Broadcasting Authority, argued that the Australian Content standard
existed as part of the obligations of the ABA under Object 3(e) of the
Broadcasting Services Act to promote the role of broadcasting services in
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reflecting a sense of Australian identity, character and cultural diversity, and that
this objective should have primacy over obligations under international trade
agreements:
Cultural protection measures are based upon an assumption that local
industries foster local creativity and indigenous talent which may
otherwise have no expression. Such expression enriches the cultural life of
the nation as a whole. National identity, character and cultural diversity
are thus expressed in a material form: such expression would not
necessarily occur without specific measures designed to promote it and
ensure that it has access to local audiences. (Grainger 1998: 11)
The alliance of Australian production industry groups, known as Project True
Blue, were concerned that relatively small amounts of New Zealand programming
would erode the local content quotas for drama, childrens and documentary
programs, and that New Zealand producers could take advantage of the CER to
dump low-cost programming in Australia (Britton 1997).13 There was also a
concern that recognition of the capacity of the CER to override local content
quotas could, in an era of the GATS and the World Trade Organisation, be the
thin end of the wedge for the abolition of all forms of cultural protection in order
to comply with international trade and other treaty obligations (Fell 1998).
Advocates of theProject Blue Sky case, such as Jo Tyndall, Executive Director of
the Screen Producers and Directors Association of New Zealand, believed that
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these concerns were overstated, and that opportunities existed for the two
countries to develop a more recognisably equitable integrated market, and
increase the range of issues on which Australia and New Zealand arts lobbies
have similar interests (Art & Law 1998: 6). Other New Zealand observers, such
as academic Geoff Lealand, believed that the issue was not money but equity
between the two trading partners (Lealand 1997: 48), even if he was elsewhere
sympathetic to the emotional and cultural logic behind the Australian desire to
protect the local industry by opposing the Project Blue Sky case (Lealand 1996:
227).
Using Galperins (1999) framework for assessing the impact of regional
trade agreements on cultural industries policy, it is apparent that the CER
agreement between Australia and New Zealand has both similarities and
differences with the NAFTA and EC cases. As in the NAFTA relationship
between the US and Canada, both Australia and New Zealand share English as a
common language, and both have significant cultural and historical similarities.
Both countries share with the EC nations a concern about high levels of US
audiovisual import penetration and its capacity to undermine the local production
industry and elements of a distinctive national culture but, in contrast to EC
nations such as France and Germany, neither Australia nor New Zealand has
historically possessed a strong sense of national cultural sovereignty underpinned
by its cultural industries. Both cultures have historically been very open to
external influences, and the governments of both countries have been committed
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since the 1980s to reducing levels of protection and regulation in order to be more
oriented towards international markets, as well as being supportive of
international moves towards trade liberalisation.
Audiovisual trade between the two countries is dominated by Australia,
with Australian programming accounting for 12.9 per cent of programs on New
Zealand television in 1993, and it is estimated that Australia earned NZ $13
million annually from program sales to New Zealand, while New Zealand earned
NZ$300 000 a year from trans-Tasman program sales (Lealand 1996: 218, 226).
In an interesting contrast to the United States/Canada relationship, it was Australia
as the dominant partner in the regional trade agreement that was hostile to
liberalisation of audiovisual trade within the trading bloc. The potential impact of
New Zealand imports on the amount of Australian material broadcast seems to
have been quite minimal. While the MEAA has argued that the amount of New
Zealand material supported through subsidy from New Zealand On Air could
potentially meet up to 70 per cent of the Australian drama quota (Britton 1997),
such aggregate figures do not address the question of whether Australian
commercial television networks would find such material suitable for broadcast,
or would attract sufficient Australian audiences to be commercially viable. The
failure of the Grundys-produced Shortland Street, New Zealands most popular
serial drama, to attract a significant audience when it screened on SBS in
Australia in 1994 is often cited as a case in point. Franco Papandrea (1998) has
estimated that the impact of including New Zealand programs in the schedule of
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Australian drama and documentary programs would be likely to be minimal, even
where New Zealand imports have a cost advantage over local programs, since
there is no evidence of significant Australian audience preference for New
Zealand content, compared with high preference for Australian content in both of
these program categories.
Where the Australian and New Zealand broadcasting systems differ
significantly is in their degree of regulation. While both countries were committed
to a general program of deregulation in the 1980s, this went much further in New
Zealand in the broadcasting sector. It can be argued that much of the Australian
opposition toProject Blue Sky stems from the concern that deregulation went too
far in New Zealand, and that comparable developments in Australia would mean
the end for local content quotas, as part of the race to the bottom thesis that
globalisation leads to competitive downgrading of regulatory standards
(Bratihwaite and Drahos 2000). New Zealand has no local content quotas, relying
instead upon the public authority New Zealand On Air (NZOA) to fund local
production in the areas of drama, documentaries, childrens and special interest
programming, in contrast to the use of local content quotas in Australia, with
specific requirements for drama, childrens and documentary programming. In
contrast to Australia, where the Australian government funds the ABC as a non-
commercial public broadcaster and the SBS as a specialist multicultural
broadcaster, New Zealands publicly owned TVNZ, as a State-Owned Enterprise,
is required to operate on a largely commercial basis. As a result, local content
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levels in New Zealand are among the lowest in the world at 24 per cent in 1998,
compared with the 55 per cent transmission quota for Australian commercial
television and local content on the ABC at 58 per cent (Norris et. al. 1999; cf.
NZOA 1998). 14
Given such regulatory disparities, the CER provisions are seen by critics
as a battering ram for enforcing conformity with GATS and other provisions
stipulated by international trade bodies such as the World Trade Organisation. The
Australian view has been that New Zealand should strengthen its own local
content provisions, rather than seek to dismantle the Australian local content
quotas. This position has some support in New Zealand, particularly since the
election of a Labour government in 2000, which has become increasingly
concerned that Australian TV producers may be the principal beneficiaries of
application of the CER to audiovisual services regulation (Lealand 2000). A
consequence of the protracted and quite bitter legal disputes has, however, been
that consideration of the desirability of a trans-Tasman audiovisual space, or the
benefits of free trade within geographical regions as a basis for expanding scale
economies and building more unified geolinguistic regions in the face of global
competition, has never been on the policy agenda. In Australia, such propositions
have been constructed as the thin end of the wedge, towards the total
dismantling of policy support for the local audiovisual production industry. In this
respect, the Australian arguments against including audiovisual services in the
CER are very different to those of the EC negotiators defending Television
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Without Frontiers in the face of US opposition, even though both draw upon
similar concerns about globalisation and the dangers of US domination of world
audiovisual markets.
The Millennium Round of the WTO
The World Trade Organisation commenced the Millennium Round of
negotiations concerning trade liberalisation in Seattle in November 1999, amid
protests from over 1000 non-government organisations and several thousand
protestors.15While WTO negotiations are currently in a degree of limbo after the
Seattle protests, they are continuing nonetheless, with renegotiation of the General
Agreement of Trade in Services being central to the new round of multilateral
trade negotiations. It has been argued that the GATS Agreement reached at the
end of the Uruguay Round was flawed, by virtue of the quasi-voluntary nature of
the national commitments process, or what Hoekman and Kostecki (1995: 142)
describe as the a la carte approach to trade liberalisation. US negotiators
demanded a stronger commitment on the part of WTO member states to trade
liberalisation in services, believing that the current approach had allowed many
members to essentially preserve thestatus quo, and had failed to meet the stated
objective of progressive trade liberalisation (WTO 1999). It has been proposed
that the GATS framework would better promote the goal of progressive trade
liberalisation in services if the current Round was based upon across-the-board
(horizontal) rather than sectoral approaches to regulatory liberalisation, and a
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negative list approach, where any area where an exemption has not been listed
by a member is covered by the disciplines of the GATS, rather than the approach
taken at the Uruguay Round where members nominated areas where they would
commit themselves to the disciplines of the GATS (Watson et. al., 1999: 288-
290).
The audiovisual sector was an area where a large number of WTO
member nations sought exemptions from the GATS during the Uruguay Round.
The WTO has observed in its Background Notes that 40 member countries
(counting the European Community as a single entity), including Australia, had
taken 33 exemptions from the Most Favoured Nation (MFN) clause of the GATS
(Article II) in the areas of co-production agreements for film and television
productions, and National Treatment status (Article XVII) in terms of eligibility
for financial assistance, tax benefits and entry procedures for natural persons.
Moreover, restrictions were sought in areas such as limits on foreign
shareholding, local content quotas, and exclusion from national treatment in
relation to domestic producers. Perhaps most significantly, the WTO notes that:
Audiovisual industry representatives in a number of member countries
suggested that the cinema and broadcasting sectors should be excluded
form the Agreement in order to protect national industries and cultures
from being overwhelmed by foreign products. (WTO 1998: 8)
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In what appears likely to be a repeat of debates that occurred during the
Uruguay Round of GATS negotiations, as well as the NAFTA and United States-
Canada Free Trade Agreements negotiations, the European Commission and
Canada have flagged their concerns about subjecting cultural industries to the full
range of GATS obligations. The EC is concerned that the specificity of content
and legitimacy of public policy objectives, based on cultural diversity and
pluralism of expression, is recognised in international trade negotiations (EC
1998). To this end, it proposes that the specificity of the audiovisual sector be
registered through the application of a cultural exception, to be registered as a
general exception under Article XIV of the GATS on General Exceptions, that
currently includes public order, safety and national security provision. The
Canadian government has registered similar concerns about the GATS, but prefers
the development of a new international instrument on cultural diversity to a broad
cultural exemption, that allow member states to utilise specified domestic cultural
measures to safeguard cultural sovereignty and cultural diversity (CISAGIT
1999). Knight has noted that such a position moves beyond national protectionism
by identifying the distinctiveness of cultures as a principle that has universal
validity:
Far from being a parochial or simply national concern, the protection of
local culture is of global concern. Without national governments
providing counterweight to the overwhelming and growing presence of
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(mainly American) entertainment culture, cultural diversity will be swept
away in an era of globalisation. (Knight 1999: 169)
There is at this stage not a clearly defined Australian position on the WTO
and trade in audiovisual services. At a general level, Australia supports
progressive trade liberalisation in the services sector. In a 1999 speech to the
Australian Coalition of Service Industries, the Minister for Trade, Tim Fischer,
reiterated Australias support for extension of the GATS framework, as providing
a secure and stable framework for managing our trade, and providing the
capacity to expand access into new export markets (DFAT 1999). In some services
sectors, such as education where Australia is the worlds sixth largest exporter of
education services (Cunningham et. al. 2000), support for further trade
liberalisation is readily understandable. At the same time, and in apparent
contrast, the Australian audiovisual sector was opposed to further trade
liberalisation through the GATS, arguing that the sector is already highly
internationalised, and that further trade liberalisation would jeopardise current
assistance arrangements, and thereby threaten local culture and Australian
democracy (AVPIG 1999). Moreover, it was argued that such a position had the
support of the Minister for Communications, Information Technology and the
Arts, as indicated by the decision to amend Section 160(d) of the Broadcasting
Services Act in order to quarantine the international treaty obligations to only
cover the CER between Australia and New Zealand.
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Conclusion
It has been observed in this chapter that, while Australias overall
negotiating position in relation to the WTO and the GATS has been a highly
supportive one, the Australian audiovisual production sector has tended to see its
future as being threatened by further trade liberalisation as required under the
GATS. The concerns in the Australian audiovisual sector are reflective of a wider
range of concerns about the impact of globalisation and international trade
agreements on political citizenship, national cultures and cultural sovereignty.
Such concerns have been played out in a variety offora, from the opposition of
the European Community to free trade in audiovisual services, to mass
demonstrations against the WTO negotiations in Seattle. On a more local scale,
the Project Blue Sky case, and the issue raised about whether television programs
produced in New Zealand should count as Australian content under the CER
agreement, revealed concerns in the Australian audiovisual industry that such an
agreement was the thin end of the wedge towards dismantling local content
quotas, even if the actual threat of material produced in New Zealand was
minimal. Such debates are bound up with wider questions about television as a
cultural industry, and whether claims about its cultural distinctiveness and
contribution to national cultural development, as opposed to understanding
television as a services industry, remain tenable in an era of globalisation,
technological convergence and trade agreements such as the GATS.
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1 Other international economic institutions established after World War II included the International MonetaryFund, the International Bank for Reconstruction and Development (the World Bank), and the Bretton Woods monetarysystem.
2 The GATT negotiators in the Uruguay Round did not agree on a singular definition of services industries, butrather identified twelve sectors that included: business, financial, communications, tourism, health, construction,distribution, education, environmental, recreational, transport and other services. The category of communication servicesincluded postal services, courier services, telecommunication services (including on-line services) and audiovisual services.
3 Until the establishment of the World Trade Organisation (WTO) in 1995, at the conclusion of the Uruguay Round
of the GATT, the GATT had described both the trade treaty and the institutional framework through which it wasadministered.
4 This Article has a special provision that MFN provisions can be exempted if listed in an Annex on Article IIexemptions. Prior to the conclusion of the Uruguay Round, a range of MFN exemptions were taken out by Member states,including Australia, in the area of audiovisual services, primarily to insulate co-production agreements from MFNprovisions.
5 Interview with Jock Given, 18 November 1997.6Ibid.7Ibid.8 Anderson and Garnaut drew attention to a league table of industrial countries showing that growth rates in Gross
Domestic Product (GDP) per capita were lower in Australia over the 1870-1976 period than any other industrial country,and that that Australias GDP per capita had fallen from the 3rd highest in the world in 1950 to 7th in 1970 and 14th in 1980(Garnaut and Anderson 1987: 16-17). They attributed this decline to political interventions that had locked up resources in
less internationally competitive industries that had not been required to innovate, as protectionism had been an alternative toeconomic restructuring.
9Project Blue Sky Inc. & Others v Australian Broadcasting Authority, No NG 807 of 1995.10Australian Broadcasting Authority v Project Blue Sky and Others, No. NG753 of 1996, per Wilcox and Finn JJ.11Project Blue Sky Inc. & Others v Australian Broadcasting Authority [1998] HCA 28, 28 April 1998, S41/1997,
perMcHugh, Gummow, Kirby and Hayne JJ.12 Interview with Anne Britton, 28 September 1998; interview with Christina Spurgeon, 28 October 1997.13 The amici curiae in the High Court case were: Australian Film Commission, Australian Film Finance
Corporation, Australian Childrens Television Foundation, Screen Producers Association of Australia, Australian WritersGuild, Media Entertainment and Arts Alliance, Australian Screen Directors Association, Susan Lyons, Graham Thorburn,Denise Morgan and Jonathon M. Shiff Productions.
14 Australia also experimented with an NZOA-type arrangement with the Commercial Television Production Fund(CTVPF), established in 1995 as an initiative of the Keating Labor government as part of its 1994 Creative Nation cultural
policy statement. The CTVPF was provided with $60 million over three years to fund high-quality commercial TVproductions that could attract private capital. Productions supported under the CTVPF would not be eligible for Australiancontent quota points, so that the direct subsidy was additional to quota. The CTVPF led directly to an additional 81.5 hoursof local content over three years, and indirectly to a further 186 hours of local drama production, as six CTVPF-fundedpilots were subsequently developed into drama series (ACTPF 1998).
15 This round of WTO negotiations was preceded by the failure to implement toe Multilateral Agreement onInvestment (MAI). The Multilateral Agreement on Investment (MAI) was an initiative developed through the OECD in1995, as a response in part to the failure to liberalisation of foreign investment rules in the Uruguay Round of GATTnegotiations. It would have allowed foreign corporations to prosecute national governments under international law if theybelieved that national policy actions had contravened the MAI, by establishing investor-to-state as well as state-to-statedispute resolution mechanisms. While the Director-General of the World Trade Organisation, Renato Ruggieri, describeddeveloping the MAI as writing the constitution of a single global economy (quoted in Goodman 1999: 34), the MAI struckmajor opposition worldwide. The adverse implications for national sovereignty were widespread, as it was believed thatnational regulations in areas such as the environment, labour standards, product safety and anti-competitive behaviour wereunder threat from the MAI (Joint NGO Statement1997). Negotiations on the draft MAI ceased in October 1998, as a resultof growing international political opposition. For its critics, this was seen as the first time [that] an autonomousinternational campaign had forced the worlds most powerful states to reconsider a major economic agreement (Goodman1998: 36). Concern with the MAI in Australia can be gauged from the Parliamentary Joint Standing Committee on Treatiesreceiving over 900 submissions to its inquiry into the potential consequences of the MAI for Australia (Parliament of theCommonwealth of Australia 1999)