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

32 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

33 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 the Broadcasting Services Act 1992.

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

34 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.

35 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

36 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

37 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

38 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 nation’s 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

39 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 one’s 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 O’Regan has noted that US

40 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 (O’Regan 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 AsiaPacific (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.1 The principle underpinning these

41 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 another’s 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.

42 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 Economist 1990: 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 demandeur of the services negotiations in the GATT’, since it was the world’s leading exporter of services, with exports in 1992 totaling US$162 billion and imports US$108 billion in 1993.

43 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.2 In 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.

44 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 television’s 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:

45 • 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 VII Recognition, requiring that forms of education and experience acquired in order to supply a particular service

46 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 country’s 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 highbudget 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 panEuropean 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).

47 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, AngloSaxon 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 Community’s ‘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

48 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 nondiscrimination 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 GATT’s 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

49 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;

Their domestic 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 world’s leading audiovisual services exporter. For

50 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] people’s Europe is not’ (Schlesinger 1997: 373).

51 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, ‘Eurocitizenship’ 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

52 to services. Footer and Graber (2000) observe that the concept of a ‘cultural exception’ is unlikely to be acceptable under the GATS framework, partly because it would introduce legal uncertainty around the definition of ‘culture’, but also because it would be open to challenge on the grounds of being, under Article XIV of the GATS covering General Exceptions, ‘a means of arbitrary or unjustifiable discrimination between countries where like conditions prevail’, or ‘a disguised restriction on trade in services’.

Second, there is a disjuncture between the ‘official’ conception of culture as a coherent and distinctive national or regional form, and actual national production, industry development and consumption patterns that are much more hybridised and influenced by the dominant US audiovisual formats. The question of whether ‘official’ concerns about protecting local or national culture are matched by popular concerns, particularly in nations where there is significant exposure to imported films and television programs, has always been doubly problematic in light of Jeremy Tunstall’s famous aphorism that ‘The Media are American’, or that media production worldwide has been profoundly influenced by the generic and formal conventions of the dominant American sectors (Tunstall 1977). The danger is that protectionist measures for domestic cultural industries, or exclusion from the trade disciplines of the GATS, will be seen within those societies as reflecting rent-seeking behaviour by producer interests, cloaked in the ‘sacred’ language of culture and the rhetoric of cultural nationalism, while in practice cultural products are strongly shaped by the practices of the US film and

53 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 nationstates. (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

54 treaty negotiations and trade policy. The Australian federal government, those government departments concerned with international trade and economic performance, and Australia’s 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 Australia’s 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).

55 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’ (O’Regan 1992: 91), or a ‘safety net’ for local content (Cunningham and Jacka 1996: 224). O’Regan 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’ (O’Regan 1993: 76). Australia’s situation in international

56 television trade was therefore presented as being closer to that of Englishspeaking Canada than France and other continental European nations.

Such arguments provided useful counters to the deregulatory and antiprotectionist 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 don’t understand how difficult it is, and we’ve heard you and thank you. You let us professionals go off and do it,

57 it is a very complicated and difficult international negotiating job, I have to be on a plane to Geneva in two hours, why don’t 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 Australia’s 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 Australia’s 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 it’s not so much dogeat-dog as T-Rex-eats-pups. (Given 1993: 4)


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’ (O’Regan 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’ (O’Regan 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

59 ‘as our part of a global cultural intervention to maintain and enhance difference and creative opportunity everywhere’ (Given 1993: 4).

Australia’s 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 nation’s overall economic and political objectives. More generally, Australia’s 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 motif among Australia’s economic policy agencies since the 1970s, and a commitment to trade

60 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 1970-71 1976-77 1986-87 1991-92 1996-97 Source: Snape et. al. (1998: 13). Manufacturing 36 27 19 13 6 Agriculture 28 9 19 11 n/a

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 outwardlooking Australian economy. In the March 1991 industry policy statement, Building a Competitive Australia, Prime Minister Bob Hawke argued that

61 Australia’s ‘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 outwardlooking 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

62 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 ‘postFordist’, 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

63 played by the Broadcasting Services Act 1992, 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 ABA’s requirement under Section 122 (2)(b) of the Broadcasting Services Act 1992 to develop a standard

64 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 … Australia’s 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 Act 1992 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 the Broadcasting Services Act 1992, by being in breach of the Protocol of Trade in Services of the CER.9 The 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

65 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 Brennan’s 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 program’s content (Leiboff 2000).

This thesis will not dwell upon the validity of the High Court of Australia’s 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

66 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 Act was 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

67 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, children’s 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 the Project Blue Sky case, such as Jo Tyndall, Executive Director of the Screen Producers and Directors Association of New Zealand, believed that

68 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 Galperin’s (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

69 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 Zealand’s 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

70 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 to Project 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, children’s and special interest programming, in contrast to the use of local content quotas in Australia, with specific requirements for drama, children’s and documentary programming. In contrast to Australia, where the Australian government funds the ABC as a noncommercial public broadcaster and the SBS as a specialist multicultural broadcaster, New Zealand’s publicly owned TVNZ, as a State-Owned Enterprise, is required to operate on a largely commercial basis. As a result, local content

71 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

72 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.15 While 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 the status 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

73 ‘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: 288290).

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)

74 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 StatesCanada 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

75 (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 Australia’s 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 world’s 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.



It has been observed in this chapter that, while Australia’s 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 of fora, 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.


Other international economic institutions established after World War II included the International Monetary Fund, the International Bank for Reconstruction and Development (the World Bank), and the Bretton Woods monetary system. 2 The GATT negotiators in the Uruguay Round did not agree on a singular definition of services industries, but rather identified twelve sectors that included: business, financial, communications, tourism, health, construction, distribution, education, environmental, recreational, transport and other services. The category of communication services included 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 was administered. 4 This Article has a special provision that MFN provisions can be exempted if listed in an Annex on Article II exemptions. 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 MFN provisions. 5 Interview with Jock Given, 18 November 1997. 6 Ibid. 7 Ibid. 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 Australia’s 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 to economic restructuring. 9 Project Blue Sky Inc. & Others v Australian Broadcasting Authority, No NG 807 of 1995. 10 Australian Broadcasting Authority v Project Blue Sky and Others, No. NG753 of 1996, per Wilcox and Finn JJ. 11 Project 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 Children’s Television Foundation, Screen Producers’ Association of Australia, Australian Writers’ Guild, 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 TV productions that could attract private capital. Productions supported under the CTVPF would not be eligible for Australian content quota points, so that the direct subsidy was additional to quota. The CTVPF led directly to an additional 81.5 hours of local content over three years, and indirectly to a further 186 hours of local drama production, as six CTVPF-funded pilots were subsequently developed into drama series (ACTPF 1998). 15 This round of WTO negotiations was preceded by the failure to implement toe Multilateral Agreement on Investment (MAI). The Multilateral Agreement on Investment (MAI) was an initiative developed through the OECD in 1995, as a response in part to the failure to liberalisation of foreign investment rules in the Uruguay Round of GATT negotiations. It would have allowed foreign corporations to prosecute national governments under international law if they believed that national policy actions had contravened the MAI, by establishing investor-to-state as well as state-to-state dispute resolution mechanisms. While the Director-General of the World Trade Organisation, Renato Ruggieri, described developing the MAI as ‘writing the constitution of a single global economy’ (quoted in Goodman 1999: 34), the MAI struck major opposition worldwide. The adverse implications for national sovereignty were widespread, as it was believed that national regulations in areas such as the environment, labour standards, product safety and anti-competitive behaviour were under threat from the MAI (Joint NGO Statement 1997). Negotiations on the draft MAI ceased in October 1998, as a result of growing international political opposition. For its critics, this was seen as ‘the first time [that] an autonomous international campaign had forced the world’s most powerful states to reconsider a major economic agreement’ (Goodman 1998: 36). Concern with the MAI in Australia can be gauged from the Parliamentary Joint Standing Committee on Treaties receiving over 900 submissions to its inquiry into the potential consequences of the MAI for Australia (Parliament of the Commonwealth of Australia 1999).


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