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OpenMarket: Alex McHugh

  • Tracking the Cultural Exception, Part Five: There Is Another Way

    August 19, 2013
    ftaIn the final entry to my series, the question I want to address is more difficult to answer: Why haven’t more countries woken up to the inefficiency of cultural exceptions in trade agreements? They are harmful to consumers, don’t give either signatory an edge, and are no longer even effective at blocking trade in cultural products. So why don’t more policy makers would realize this?

    One reason is that politicians like to pose as protectors of their nation’s cultural heritage against encroachment of overly commercialized mass popular culture, mostly from America. Another is that old policies die hard. Once a policy is in place, inertia tends to keep it there. So what would a trade agreement without a cultural exception look like?...
  • Tracking the Cultural Exception, Part Four: A Double-Edged Sword

    July 31, 2013
    Americans generally think of subsidies to audiovisual industries like film and television as a foreign phenomenon. Yet that is hardly the case. In fact, one common argument for cultural exceptions made in other countries is that they are the best way to counter massive U.S. subsidies.

    European film producers have a point, but they’re pursuing a wrongheaded approach. Rather, they have much to gain from negotiations, as U.S. subsidies would be on the table as well. As I noted in a previous post, the outdated policies actually harm the industries they’re meant to protect. And efforts to keep them in place help keep other distortionary policies in place. In the case of U.S. film subsidies, they could be said to be protected by the European exception.

    There’...
  • Tracking the Cultural Exception, Part Three: For Your Grandad’s Audiovisual Industry

    July 30, 2013
    Protectionist audiovisual policies are not only inefficient, they’re outdated. Protectionist policies don’t translate into profits because they are built for an audio-visual industry that no longer exists. Gone are the days when effective broadcasting was about building a mass audience. In the world of Netflix and Hulu, screen quotas for local content have been rendered obsolete. Today’s viewers are globally minded and know how to access the media they want—wherever it may come from.

    As users gain access to more content delivery channels, their power in the market has increased astronomically. The more successful audiovisual producers have realized that drawing uninterested consumers to their products is now a losing game. Instead, their focus should be on maximizing the time...
  • Tracking the Cultural Exception, Part Two: Exempt from Success

    July 2, 2013
    Arguments for cultural exemptions in free trade agreements seem simple -- allow for continued protection for domestic movie/entertainment industries to bolster their viability. But do such policies actually promote local creative industries?

    Advocates for cultural protectionism often forget that although restricting the number of foreign films coming in may help some filmmakers at home, it often hurts them abroad. Filmmakers in countries with restrictions on foreign films are less likely to get reciprocal international promotion. They also are severely limited in their production choices, because quotas on foreign investment make co-production with foreign partners much more difficult -- so difficult in France that tax rebates were introduced to encourage foreign filming and co-production, which had been widely discouraged by strict quotas....
  • Tracking the Cultural Exception, Part One: How Does One Exempt a Culture?

    June 25, 2013
    On June 14, the European Union’s Council of Foreign Affairs adopted a mandate for negotiation on the Transatlantic Trade and Investment Partnership (TTIP). It includes a “cultural exception” so obviously protectionist that it’s hard to understand how it got through. Many European leaders made a good show of opposing the exception, but French ministers didn’t have to twist too many arms. The French Culture Ministry released a letter documenting support for the cultural exemption from across Europe, and mentions a pro-exception petition by filmmakers that has gathered 5,000 signatures. In light of all this, the ...
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