The Legal Coordination Of Trade-Culture Conflict

Cultural products generally refer to those consumer products that convey ideas, symbols and ways of life. They inform or entertain, contribute to build collective identity and influence cultural practices. Cultural products have both commercial and cultural values.They convey and construct cultural values, produce and reproduce cultural identity and contribute to social cohesion. In today’s world, cultural trade is extremely uneven and the international cultural market is dominated by a few developed countries or groups of countries, primarily by the United States and the European Union. The serious imbalance of cultural trade, especially the rapid spread of popular cultural products produced by the United States over the globe under the banner of free trade, many countries, in particular developing countries, fear their cultures would be assimilated to the American culture.The global culture is facing with the crisis of cultural homogenization, uniformity and poverty. A kind of sense of cultural crisis has awakened many countries’consciousness of cultural sovereignty and many trade-restrictive cultural policies have been proposed. As a result, trade/culture conflicts have become increasingly frequent in international trade. Taking the approaches of historical investigation, economic analysis, normative analysis, positive analysis and multidisciplinary research, etc., based on the perspective of cultural trade, this dissertation provides a comprehensive analysis of issues concerning the trade-culture conflict and its legal coordination, and suggests solving the trade/culture conflict basing on the right to cultural development.In addition to the introductory and concluding parts, the core of this dissertation is divided into five chapters.Chapter one, based on the perspective of "cultural exception" in international trade, explores the origin, development and causes of trade-culture conflict. "Cultural exception" originated in the disputes on the film trade between the United States and Europe in the early 20s of the 20th century, when the European countries undertook screen quotas to limit the imports of American movies in order to resist the U.S. film invasion and protect their own film industry. Clauses equal to "cultural exception" can also be found in Florence Agreement, Nairobi Protocol, US-Canada Free Trade Agreement and North American Free Trade Agreement. However, only in the Uruguay Round’s concluding negotiations, had the "cultural exception" been formally established and the negotiating parties made compromises and did not insist on applying all the GATT rules to audiovisual products. As many and many countries increasingly concern about culture, "cultural exception" principle is becoming increasingly prevalent in today’s world. The causes of trade-culture conflict are complex. To find out why trade-culture conflict occurs, in addition to taking the general analysis, the realities of international cultural trade which concentrate mainly on developed countries must be taken into account. There are four reasons behind trade-culture conflict:(1)the shock of national culture by globalization;(2) cultural trade is typically intra-industry trade;(3)the different opinions on the concept of culture and the characteristics of cultural products;(4)policy consideration to European integration.Chapters 2 and 3 both demonstrate the likeness of coordination of trade-culture conflict in the multilateral trading system. Chapter 2 assesses the applicability of WTO law in the trade-culture conflict primarily from the text perspective. Although the WTO panel and appellate body have acknowledged the unique nature of Members’ culture and Members can define and apply for themselves the concept of "public morals" in their respective territories, they have established a set of strict criteria for the "necessity" and "preface" requirements of GATT Article XX(a) and GATS Article XIV(a).As a result, it will be very difficult to defend cultural policies which are obviously in contradiction with WTO law according to GATT Article XX(a) and GATS Article XIV(a).The specific content of Article XX(f) is not clear until now, it is generally believed that the exception appears to prevent the export of looted artifacts and not safeguard the culture generally. GATT Article IV is the only clause which treats cultural products specially in WTO law. In fact, GATT Article IV is the acknowledgment of screen quotas for cinematograph films adopted by European countries since 1920’s.This exception is very difficult to be applied to other Audio/Visual products by an expansion of it. However, it can be cited as guiding precedent for subsequent negotiations on cultural trade. In theory, the security exception of Article XXI of the GATT and Article XIV bis of the GATS should cover the cultural security. Nevertheless, WTO members appear to refrain themselves not to apply the security exception based on political consideration. Due to the unique cost structure of cultural products, it is difficult to judge whether export of cultural products constitutes dumping. Subsidy is usually used as a policy tool to achieve cultural policy objectives by WTO Members. The same rules concerning subsidies and countervailing measures are applied to both cultural products and other products. However, excessive subsidy is disadvantageous to developing countries.In addition, subsidy plays a limited role in achieving the policy goals of subsiding cultural products,.As the content of cultural product is not easily separated from its material support, the safeguard measures of GATT is difficult to apply to cultural goods. Cultural product is copyright product and cultural trade is closely related to the TRIPS Agreement. The copyright protection for cultural products has become too strong and now threatens cultural diversity. The TRIPS Agreement is in general tipped in favour of the protection of modern technology and does not refer specifically to the protection of traditional knowledge concerning developing countries.With the development of digital integration technology, telecommunications services and Audio-Visual services are gradually fused into a single digital platform. As a result, Audio-Visual products might be included into GATS through the backdoor opened by media convergence and value added services. In recent years, the United States actively takes the opportunity for negotiations over telecommunication service and electronic commerce to promote the liberalization of cultural trade.Chapter 3 probes into the position of GATT/WTO dispute settlement body on trade-culture conflict mainly from the judicial approach. Steadfast in judicial restraint and primacy of economic efficiency, the GATT1947 panel applied the GATT rules in a very "dogmatic" approach and often declined to consider social and cultural issues which were not clearly defined in GATT1947 for their limited terms of reference. To some extent, the WTO dispute settlement body follows the position of the GATT1947 panel as above. Although recognizing the uniqueness of Member’s national culture in a general sense, the WTO dispute settlement body is very cautious about the assertion that cultural product is special product when it deals with the specific cultural product and tends to treat cultural products like ordinary commodities. Both the Canada-periodicals case and China-Publications and Audiovisuals case demonstrate clearly that if a measure is obviously discriminatory, even it is used to achieve domestic cultural policy objectives, it is difficult to obtain recognition of the WTO dispute settlement body. To Member’s domestic cultural policy, the WTO dispute settlement body is in favor of the liberalization of cultural trade. The position of the WTO dispute settlement body as above is also embodied in its approach to deal with "like product" and "goods versus services" issues.Chapter IV examines the legislative history and content of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions. There are many shortcomings in the Convention and its role for the settlement of trade-culture conflict is very limited. First of all, the application scope of the Convention is not clear. Secondly, the Convention’relation to other international legal documents is ambiguous, in particular the relation to the WTO. Third, the Convention is basically a soft law and not justiciable in practice. Fourth, the Convention pays no real attention to the urgent need of developing countries. Therefore, the Convention is basically symbolic, especially in a very vulnerable position relative to the WTO. Nevertheless, the Convention is still very important because it resists the idea that anything should be restraint by trade rules and confirms the cultural products are different from other products. Therefore, in future trade negotiations, the Convention would definitely strengthen the bargaining power of those countries which are keen to resist cultural trade liberalization.Chapter V reflects on some issues concerning how to coordinate trade-culture conflict. Cultural trade should not be entirely liberalized. First, there are shotcomings existing in free trade theory. Secondly, there are three types of market failure concerning cultural products, that is, imperfect competition, externalities and public goods. Thirdly, one precondition of the comparative advantage theory is that the products concerned could be exchanged in international market, but apparently, there is no such interchangeability in the cultural production. Similarly, another prerequisite of the theory of comparative advantage is that the product concerned should have price elasticity of demand, while the price elasticity of demand for cultural products is very low. In addition, efficiency is not the only value of cultural production. The existing solutions proposed to coordinate trade-culture conflict do deserve careful consideration, but they fail to grasp the essence of the problem. In fact, cultural trade is neither a purely economic issue, nor is it a simple cultural one, but an issue related to global development. Therefore, the method to coordinate trade-culture conflict should be constructed on the basis of global development. Culture and development are closely linked and culture lies at the center of development. The right to cultural development has evolved as a kind of fundamental human right. Based on the above considerations, the dissertation makes a suggestion to coordinate trade-culture conflict as follows: WTO Council of Ministers makes a resolution to insert the words "protect and promote cultural diversity" into the foreword of Marrakesh Agreement establishing the WTO and to stress the cultural dimension of development acknowledging the right to cultural development is an integral part of "sustainable development" described in the preamble of Marrakesh Agreement establishing the World Trade Organization; when dealing with a case concerning trade-culture conflict, to ask the Panel and the Appellate Body, as well as Members concerned,to take into account the relevant provisions of the Convention on the Protection and Promotion of the Diversity of Cultural Expressions; to require members to give full attention to the right to cultural development (in particular to the relationship between TRIPS Agreement and the right to cultural development), and to further improve the relevant rules for the protection and promotion of cultural diversity in future negotiations.