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The Need to Talk

Bill Roberts, Secretary General of the North American Broadcasters Association, explains why broadcasters must be clear of their objectives for audiovisual services in the forthcoming talks under GATS:

In the time it takes to fly across the Atlantic the communications mergers or acquisitions may radically alter the landscape you’ve left behind. On the other hand, sometimes it seems that the regulatory structure of international trade agreements changes at the pace of a steam ship on the Atlantic crossing!

At the North American Broadcasters Association (NABA) we are evaluating the rapidly changing technological and business environment. We are watching the impact of globalisation on broadcasting and working with our members towards a better understanding of what the world of international trade agreements means for them. So when trade talks on services begin in earnest, North America’s broadcasters belonging to NABA will know what’s going on, what they agree on among themselves and what they are going to do about it.

Global changes

Globalisation has changed how broadcasters do business. It has propelled both public and private broadcasters to shift their thinking about what to sell, how to sell it, and who to sell to. In doing so, globalisation has created an inextricable link between trade and broadcasting.

Changing technology is not benign in this state of affairs. It is blurring the borders between form and content and between countries, as well as challenging traditional understanding about what constitutes broadcasting. Electronic media can no longer rely on ‘pushing’ programmes to mass customers, for now individual consumers can ‘pull’ the software they want on a virtually personalised basis.

A recent example of this cocktail of globalisation, trade, technology and consumer dominion manifested itself in iCraveTV. Prior to a court injunction instigated by industry heavyweights in the US, a Canadian upstart called iCraveTV offered consumers 17 US and Canadian television channels at no cost over the Internet. By logging on to iCraveTV’s website viewers could stream real-time video.

Unlike some of its webcasting counterparts, iCraveTV didn’t have the agreements it may have needed to rebroadcast these signals – hence the court action in both Canada and the US.

Court action aside, iCraveTV magnified how business concerns like intellectual property have gone global. iCraveTV also tested the efficacy of existing national laws and regulations in a digital communications environment.

It’s also hard to miss the connection between what is technologically and economically possible when an ubiquitous entity like AOL marries the venerable king of content Time Warner.

International trade agreements intersect with broadcasting concerns in a myriad of areas. Since trade agreements tend to emphasise open markets and fair trade, domestic policies which set the following are within the range of negotiations:

  • investment and ownership rules
  • domestic content regulations
  • restrictions on services operating in a market
  • both direct and indirect subsidies, particularly where they assist products destined for export.

Culture versus commerce

Canada, the US and Mexico have distinctively different approaches to the communications sector. Canada considers broadcasting as a ‘cultural’ industry, whereas the US sees it as part of the entertainment business, and Mexico’s policies fall somewhere in-between. Cultural issues are important to Mexico, but are not quite the public policy priority they are in Canada.

The definitions for broadcasting differ among the three, as do the rules governing ownership, market access, content and language, and incentives to use national talent.

In November last year Carol Balassa, Director of Media and Communications Services Trade Policy at the Office of the US Trade Representative, observed at a trade panel I moderated at the UN World TV Forum that the dichotomy of ‘Zola versus Cola’ or culture versus commerce among the nations’ approach to trade negotiations is not a new one. Fifty years ago negotiators had similar debates around exemptions to allow screen time quotas for motion pictures and the protection of historic archaeological treasures.

Differing definitions aside, all three North American countries took a keen interest in the third ministerial conference held in Seattle late last year. It is a little known fact that the words ‘culture’, ‘technology’ and ‘liberalised trade’ appeared in the same paragraph of the final, but failed, draft of a ministerial statement. It is a little publicised fact that a consensus was building on a common approach to the audiovisual services sector.

However, that, like all the other hopes and dreams for Seattle, is history. What lies ahead is equally interesting. As we know, the WTO announced in February that negotiations would resume on agriculture and services.

Originally, the talks had to begin by 1 January 2000 and conclude within three years. Notwithstanding the significance some place on the effect of the protests in Seattle, others believe that the talks are still on schedule, and the election of a new US president in November has always been considered an important factor in these talks.

From a North American perspective, it is significant that Canada’s ambassador to the WTO will chair the committee on services. Prior to his move to Geneva last year, Sergio Marchi was Canada’s Minister of International Trade during a time when Canada initiated and encountered a number of trade challenges at the WTO. His department debated and lost a US challenge on Canada’s cultural measures concerning magazines. Also during his tenure in the Canadian Cabinet, a Canadian advisory group named SAGIT called for an international rules-based approach that acknowledged the special nature of the cultural industries, while observing the trading environment.

This so-called ‘cultural instrument’ is something NABA’s members are considering and discussing. In the past, Canada and the US have exempted aspects of the cultural or entertainment industries from our continental trade agreements, including the Free Trade Agreement (1989) and the North American Free Trade Agreement (1994). This carve-out was accompanied by retaliatory powers.

More recently, an annex to GATS on telecommunications services at the WTO excluded broadcasting. Broadcasting, in particular, has been slow to be included for a number of reasons including the fact that it is often regulated for purposes of national security and social policy objectives. In addition, it is a highly politicised arena, and with the pace of technology, one that is hard to define.

However, it strikes many that have been following this saga that a rules-based approach has a number of advantages including the audiovisual sector negotiability, predictability and flexibility.

For one thing, coming to a negotiated agreement allows all parties to air their concerns about the issues at hand. For another, a rules-based system creates a more predictable business environment for shareholders and managers in the industries concerned. If the agreement is forged with an eye to the future, it can also be made flexible enough to observe changing technology as well as the notion of fluctuations in social sentiment.

Necessity for negotiations

Before entertaining some thoughts about whether such an accord on audiovisual services should be negotiated within the WTO, or at another international body, let’s consider the advantages and disadvantages of the status quo.

In the absence of a special set of rules governing the cultural sector or entertainment industries, the sector is vulnerable in that the norm in other industries may be imposed upon it. In addition, some countries have been chafing for some time at others’ national regulations, which advantage their citizens with:

  • national content on radio and television
  • restrictions on ownership
  • limited market access for services if a domestically owned provider exists
  • indirect subsidies or tax credits for the use of domestic nationals by either foreign or national businesses
  • direct subsidies to producers for programmes or products destined for export.

If we do not appear to be moving to a rules-based economy, the US Congress will be under pressure to remedy such trade irritants.

Consider the recent furore in California from people who work in the movie business. They are infuriated that the global economy and currency fluctuations have threatened Hollywood’s hegemony as the centre of the entertainment business. While on one hand they are demanding protections for themselves, it is not inconceivable that they will demand that incentives in Canada, Australia and other film and television production centres are eliminated to create a level playing field.

Failing to initiate negotiations toward a rules-based system for audiovisual services may mean that players who are finally dragged to the table will have fewer cards to play and fewer public policies to trade on.

A cultural instrument

If such an ‘instrument’ or treaty were possible, could it be created at the WTO? Or should it be negotiated outside GATS and brought back later? Could another existing or even a new organisation administer these rules? These are just some of the questions about trade and audiovisual services that NABA’s members are considering.

Negotiating a services agreement that covers everything including audiovisual services at WTO as currently planned would be to the advantage of larger trading nations. They could exercise trade-offs in one field in favour of another. How audio-visual services would fare would remain to be seen.

For middle powers, removing audio-visual, however it is defined, from WTO, removes them from this political and unpredictable process. Allowing them to be negotiated autonomously and return to the WTO at a later date would enable a strong consensus to develop – a consensus which would be difficult to tamper with.

Venue for the talks

The near-term challenge as to where to hold such talks is an interesting question. The United Nations Educational, Scientific and Cultural Organization (UNESCO) is a possible destination. UNESCO plays an invaluable role, yet it is hard to imagine that an organisation bereft of US involvement could possibly take on these responsibilities in an area of commerce which the US values so highly.

Some have suggested that the Organisation for Economic Cooperation and Development (OECD) might be appropriate. However, its lack of success to bring the Multilateral Agreement on Investment to a close does not stand in its favour.

Finally, an organisation with strengths in reaching wide-ranging accords like the World Intellectual Property Organization (WIPO) would be a leading candidate. WIPO is an experienced treaty negotiator and its agreements balance cultural and commercial concerns in fields such as sound recordings and music, performers’ and performance rights, film and television, e-commerce, folk history and heritage issues. In addition, WIPO has good relations with the WTO, including its joint interests in intellectual property such as the Agreement on Trade-related Intellectual Property Rights (TRIPS).

These factors stand WIPO in good stead as a potential venue for negotiating a cultural instrument or treaty, but there would be outstanding issues such as how to:

  • relate a WIPO-negotiated instrument to ultimate WTO sign-in
  • define the scope of the treaty
  • contain other sectors from demanding similar, special treatment

NABA’s role

NABA has been doing its homework for several years. We have commissioned material from PricewaterhouseCoopers Management Consulting Services, and organised comprehensive trade panels for our members and others at the UN World TV Forum held annually in New York, which we sponsor. We participated in the 1998 European Union-Canada conference on cultural pluralism, and other conferences throughout North America. In addition, we have had a strong hand in at least two IIC panels on trade in Brussels last year and in Washington this past spring.

We continue to carry out significant research in this area. Currently, with PricewaterhouseCoopers we have developed a ‘primer’ on international trade for our members. As part of our plan to be an honest broker, PricewaterhouseCoopers is surveying our members on their views on the forthcoming services round.

Greater consensus

Ultimately, a positive outcome would be to achieve a greater consensus among broadcasters from the three North American countries – a consensus we would discuss with our colleagues at the other world broadcasting unions.

As North America’s only continent-wide organisation of broadcasters and broadcast-affiliated organisations and, as one of eight broadcasting unions, NABA is well positioned to take a leading role in identifying the issues, and working with others towards welcome solutions.

Bill Roberts, NABA
Filed Under: English | Industry | Magazine Article | WTO