Perils of Cultural Protectionism

Attention all European firms that export to the U.S.! Thanks to a protectionist political project run by Canada and France, you may face some rough times ahead.

In September 2003, after the failure of global trade talks in Cancún, Mexico, EU Trade Commissioner Pascal Lamy proclaimed that the quest for freer global trade “is on a life-support machine.” Unfortunately, he may be right, as the prognosis for further worldwide trade liberalization is not good. And it may get worse. In about a year’s time, trade tensions between the European Union and the United States will likely intensify dramatically, and European companies that export goods to the U.S. could suffer as a result.

The problem is this: Since 1998, the government of France has been casting about for a way to limit permanently any further inroads by what French commentators call the “Anglo-Saxon steamroller” into its domestic market. This “steamroller” is known as “Hollywood” to the rest of the world. American movies enjoy a 70 to 85 percent share of the domestic film market throughout Europe.

A question of taste

Ignoring that many French citizens like U.S. cultural products, French politicians have lambasted American movies and sound recordings. In February 2003, France’s president, Jacques Chirac, condemned what he called “the champions of unlimited trade liberalization” (read: Hollywood) for trying to force-feed cultural “products pre-formatted for the masses” to global consumers. And in May 2003, Jean-Pierre Raffarin, France’s prime minister, predicted that the United States would soon “invade” Europe’s TV networks by overwhelming them with advertisements for American movies.

France has an unlikely ally in its fight against U.S. cultural exports—America’s neighbor to the north, Canada. Working together, Ottawa and Paris have built up an organization known as the International Network on Cultural Policy

(INCP), a six-year-old organization whose worldwide liaison bureau operates from Ottawa, Canada. Some 60 countries are members. A significant number hail from Europe: Austria, Croatia, Denmark, Finland, Luxembourg, Greece, Hungary, Iceland , Latvia, Italy, the Netherlands, Norway, Poland, Portugal , Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine, and the United Kingdom.

The INCP’s ostensible goal is “to develop strategies to promote cultural diversity.” So what sorts of tools can countries use to “promote cultural diversity,” INCP-style? If we study France’s example, we get an idea. These tools, unfortunately, mostly center on reducing consumer access to desired products. Paris maintains heavy quotas and restrictions that, according to the United States Trade

Representative’s office, form “a significant barrier to access of U.S. [TV] programs to the French market” and limit “the broadcast share of American music” on French radio stations. (Canada, by the way, maintains very similar trade restrictions.)

If this is the sort of advice that INCP wants to recommend to its members, then it should rename itself the “International Network for Cultural Protectionism,” or maybe “International Network for Cultural Paroc hialism.” Limitations of any kind on what people can see or listen to constitutes a reduction in the “diversity” of cultural products consumers can access. The people behind INCP should be more straightforward in admitting this, and should not hide behind innocent-sounding terminology.

The INCP project is advanced so far that France and Canada hope to get an international cultural protectionist treaty signed into law sometime next year. The treaty, to be written under the auspices of the United Nations Educational, Scientific and Cultural Organization (UNESCO) will enshrine the right of governments to impose French- and Canadian-style cultural protectionism on their domestic cultural markets.

If this treaty passes, governments that wish to do so will use it as an excuse to reduce consumer access to American cultural products.

This will damage America’s so-called “copyright industries” (which includes Hollywood). These industries export about 70 billion euros worth of products each year, equal to 5 percent of US GDP. The Americans who work in these industries will end up adversely affected by the new treaty, whether it is through lost jobs or wages, are guaranteed to complain to their government.

Now, Europeans whose jobs depend on exports to the U.S. need to ask themselves some questions.

First, do they believe that this protectionist attack on American exports will inspire good will in the White House, when Europeans come calling on trade issues in the future? Will it inspire goodwill among members of Congress?

Secondly, do they see any risks to launching a protectionist attack on a successful American industry? Is there a chance the Americans may seek to retaliate with punitive trade measures? If so, do European exporters see any potential for “collateral damage” to their own economic interests?

Thirdly, recalling Monsieur Lamy’s remarks, do they believe INCP’s work will make the atmosphere for additional global trade liberalization better, or worse?

If Europeans whose jobs depend on exports to the US see INCP’s proposed cultural protectionist treaty as a sensible measure, then there is no need for them to do anything.

But what about those who take the opposite view? If there are Europeans who think that passage of the INCP treaty will damage trans-Atlantic trade relations, the time for them to speak up is now.

It’s a myth to say that Americans do not value cultural diversity in the same way as Europeans do. A walk down the street in any large American city will demonstrate the truth of this statement. The wish to protect and promote cultural diversity is not unique to Canada and the European continent – it’s a wish that Washington shares, a wish that should unite Western governments, rather than divide them.

Europeans need to prod their governments to ask if there are other ways to protect cultural diversity that do not endanger the cause of freer global trade. Take UNESCO. Perhaps, for example, instead of UNESCO assisting in the passage of a cultural protectionist treaty, it could instead encourage all countries to stress the value of cultural diversity through their publically funded school systems. Educating the young to appreciate the variety of ways in which the human family expresses itself will do more to protect true cultural diversity than any trade protectionist measure ever could. That might be a better use of UNESCO’s energy, and a better way, in the end, to address France’s concerns.

Countries should be free to nurture their cultural diversity. Surely, they can find ways to protect it that will not sabotage the drive towards freer global trade.