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21 The UNESCO Convention on Cultural Diversity: Cultural Policy and International Trade in Cultural Products Peter S. Grant Introduction despite frantic efforts by the US to oppose it. I can say that I had a small hand in the creation of this convention since I first suggested the idea at a This chapter deals with the global conflict over the meeting of a Canadian trade advisory group in right of countries to maintain space and choice for 1998. That group adopted the idea, published it in their own films and other cultural products, in the a report in 1999, and then stepped back as govern- face of a massive trade imbalance in favor of the ments and cultural organizations – first in Canada, Hollywood-based multinational companies. It is a then around the world – took up the struggle to story involving dramatic confrontations, emo- implement it. tional arguments, and pitched battles in a number But I am ahead of my story. It is a complex of glamorous international cities. Of course, narrative, dating back to the early part of the Hollywood blockbuster films are known around twentieth century. And the story has not yet ended. the world for action-filled confrontations, special effects wizardry, and a plot involving global com- batants. But it is unlikely that the story recounted Trade in Cultural Products in this chapter will ever be told in a blockbuster film, at least not one financed by Hollywood. Part of the reason is that the story is more complex We now live in a globalized world where cultural than the kind of story that Hollywood films like products – books, sound recordings, magazines, to tell. But part of the reason is also that the story TV shows, films – can be accessed from just about reveals an appalling and embarrassing disconnect anywhere. It is a world of seemingly unparalleled between the position espoused by Hollywood and choice. the position of virtually every country outside the Sixty years ago, international trade was a fraction United States (US). of what it has since become. And international trade This is not an objective account, since it is told in cultural products was also tiny in comparison from the point of view of one of the combatants. with present-day trade flows. Since then, cultural The story culminates in the overwhelming approval trade has exploded in size. It has also changed in 2005 of a new international convention on cul- dramatically. Formerly, most trade took the form tural diversity by countries around the world, of physical goods shipped across borders, such as The Handbook of Global Media and Communication Policy, First Edition. Edited by Robin Mansell and Marc Raboy. © 2011 Blackwell Publishing Ltd. Published 2011 by Blackwell Publishing Ltd. MMansell_c21.inddansell_c21.indd 333636 33/16/2011/16/2011 77:04:41:04:41 PPMM UNESCO Convention on Cultural Diversity 337 books, magazines, or film. Now, trade in cultural do not specify the origin of its cultural content. It products typically involves the transfer of intellec- is possible for the original work and its copies to tual property, and what crosses borders is fre- be produced in different locations. For example, quently a digital bit stream, sent through satellite many films created and projected in country links or fiber optic cable. A may have been imported in the form of release prints from country B, which benefits from com- This has also made such trade very difficult petitive laboratories that process at lower prices. to measure or to value. Disputes abound as to In trade records, the products are declared as whether cultural products are best described as originating from country B. However, from a cul- “goods” or “services,” and how to price or value tural point of view, country B is not considered as such products when most of the value is intangible the country of origin of this product. and the marginal cost of producing a copy or obtaining an additional viewer is close to zero. In A third problem is a definitional one. In trade this regard, a study released by the United Nations terms, cultural products can be seen as only one Educational, Scientific and Cultural Organization part of a broader classification of creative-industry (UNESCO) Institute for Statistics in 2005 included products, which can include computer software the following commentary:1 and the products of related industries like advertis- ing, architecture, design, or fashion. Many studies Generally trade statistics cannot accurately meas- of “creative clusters” focus on this broader classifi- ure the economic value of copyrighted cultural cation, making comparisons more difficult. works sold in foreign markets. Cultural products Recent studies have attempted to develop a bet- have both a tangible element, such as the plat- ter picture of trade flows in regard to cultural prod- form of product format, and an intangible ele- ucts, although none of them has fully addressed the ment which determines their content and makes them reproducible as many times as desired. This issues noted above. Using the broader definition of intangible nature of cultural products leads to what is encompassed, a 2008 study by the United underestimations of the actual global value of Nations Conference on Trade and Development exchanges. For example, trade statistics assign a (UNCTAD) concluded that the value of world small value of US$100 to an original work pro- exports of creative industry goods and services tected by copyright, i.e. a film print or a master reached US$424.4.billion in 2005 (3.4 percent of version, when exported from one country to world trade) compared with $227.4 billion in 1996. another. Yet, this original work may generate Over the period 1996–2005, the creative industries millions of dollars in sales and royalties through increased their shares of global markets, growing at copies, exhibition rights and reproduction license an overall annual rate of 8.7 percent for the period fees. However, if unsuccessful, this product may 3 generate almost no revenue at all. Thus, trade 2000–05. statistics as they are currently collected cannot A more recent US study focussed on a narrower reflect the intangible assets or the market value definition and estimated that the revenue generated of many of the cultural products being exchanged in 2007 by foreign sales or exports of cultural prod- among countries. This constitutes the main limi- ucts created in the US was US$7.62 billion for pre- tation to attempts to measure cultural trade, recorded records and tapes; $20.38 billion for motion which ideally requires the formulation of alterna- pictures, TV, and video; and $5.78 billion for news- tive methodologies and statistical classifications. papers, books, and periodicals.4 A number of other countries also have export Another problem arises because customs data do success for their cultural products. Television pro- not track the origin of the content but only the ori- grams from Mexico are widely distributed through- gin of the manufactured copy that crosses the bor- out Latin America and in Spanish-speaking parts of der. The two are not necessarily the same. As noted the US. Countries with large internal markets, like 2 in the UNESCO Institute for Statistics study: Brazil’s television and India’s film industries, also Only limited information is available on the ori- have some export success. gin of the cultural content of traded products. However, much of the trade in cultural products The rules applied to origin and destination of is seen as largely one-way. In 2007, movies produced imported and exported products relate to the in Hollywood accounted for 63 percent of the box location of where the product is processed, but office receipts in European theaters.5 The box office MMansell_c21.inddansell_c21.indd 333737 33/16/2011/16/2011 77:04:41:04:41 PPMM 338 Peter S. Grant share of Hollywood films is even higher in other terms of trade law? In particular, why are special countries, often reaching 90 percent or more. By policies or measures required for products of popu- contrast, the percentage of box office achieved by lar culture? After all, if they are popular, won’t the foreign films in the US is typically below 10 percent. market automatically supply them? The US is also the dominant television exporter. These are logical questions. But to the con- A British study estimated that 85 percent of all sternation of economists and policy-makers, the children’s programming, 81 percent of television answers are not easy. In fact, it is widely acknowl- movies, and close to 75 percent of dramatic televi- edged that the economic principles applicable to sion programs sold in the global television market ordinary commodities are difficult if not impossible were of US origin.6 to apply to cultural products. Cultural goods and The size and perceived importance of the trade services are affected by what The Economist has in cultural products has grown exponentially. The called “curious economics”9 and these have to be “cultural industries” are also increasingly seen by carefully borne in mind. Table 21.1 lists a number many developed countries as a vital part of their of attributes that make it clear that the marketplace economy. A major study published in November is quite different for cultural products when com- 2006 entitled “The Economy of Culture in Europe” pared with the market for ordinary commodities.10 underlined the culture sector’s potential for creat- To illustrate this, it may be useful to look at ing more and better jobs in the future.7 The study the economics of a popular new TV drama series showed how the cultural industries in Europe drive made in the English language.11 Drama is the most economic and social development, as well as inno- costly to produce of the forms of audiovisual vation and cohesion.

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