The cultural industries as a regulatory challenge for international trade law : insights from the NAFTA, the WTO and the EU

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(1)EUROPEAN UNIVERSITY INSTITUTE Department of Law. THE CULTURAL INDUSTRIES AS A REGULATORY. CHALLENGE FOR INTERNATIONAL TRADE LAW Insights from the NAFTA, the WTO and the EU. Rostam Josef Neuwirth. Thesis submitted with a view of obtaining the degree of Doctor of Laws of the European University Institute ____________________________________________________________________________ © 2005 Rostam J. Neuwirth.

(2) Meinen Grosseltern, J. & J. Neuwirth. i Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(3) TABLE OF CONTENTS Table of Contents........................................................................................................................................................................ ii Acknowledgements.....................................................................................................................................................................vii Abbreviations ...........................................................................................................................................................................viii Abstract................................................................................................................................................................................... xiv. INTRODUCTION ____________________________________________________________ 1 CHAPTER 1. THE CULTURAL INDUSTRIES IN INTERNATIONAL TRADE LAW ................................. 1. PART I. 6. THE CULTURE INDUSTRY AND THE ‘C ULTURE CHAPTER 2 § 2.1.. AND. T RADE D EBATE ’ ______________ 6. PRELIMINARY METHODOLOGICAL CONSIDERATIONS................................................6 Preliminary Remarks on the Trade and Culture Debate........................................................... 6. §§ 2.1.1. Elements of the Trade and Culture Debate ............................................................................................................................ 6 2.1.1.1. Background Considerations .....................................................................................................................................................................................6 2.1.1.2. Excursus on the Etymological Origins of the Concepts of Trade and Culture...........................................................................................7 A. The Concept of Trade ..........................................................................................................................................................................................7 B. The Concept of Culture .......................................................................................................................................................................................7 2.1.1.3. Clarifications on the Concepts Use in the Present Context..............................................................................................................................9. §§ 2.1.2. Culture and Trade....................................................................................................................................................................... 11 2.1.2.1. Framing the Culture and Trade Debate...............................................................................................................................................................11 2.1.2.2. The Culture and Trade Debate: Parallels to the Present Challenges in Legal Science..............................................................................13. §§ 2.1.3. The Cultural Industry: A Metaphor for the Culture and Trade Debate?........................................................................ 15 2.1.3.1. The Oxymoron: A Lex Specialis to the Legi Generali of the Trade and Culture Debate.............................................................................15 2.1.3.2. Transcending the Meaning of the Legal Definition of “Cultural Industries”.............................................................................................15 2.1.3.3. Résumé of the Background of the Analysis........................................................................................................................................................16. § 2.2.. On the Commensurability of the NAFTA, the WTO and the EU...........................................18. §§ 2.2.1. General Introductory Remarks................................................................................................................................................ 18 §§ 2.2.2. Specific Differences for Consideration in the Context of the Cultural Industries........................................................ 19 §§ 2.2.3. The Comparison’s Underlying Path and Objective............................................................................................................. 20. CHAPTER 3. THE CONCEPT OF THE CULTURAL INDUSTRIES ....................................................... 22. § 3.1.. A Short Survey........................................................................................................................... 22. § 3.2.. The Frankfurter Schule and the Social Theory of ‘Culture Industry’...................................... 24. §§ 3.2.1. The Origin of the “Culture Industry” in the Context of the Frankfurt School............................................................. 24 §§ 3.2.2. Some Elements for a Critique of The Culture Industry: La reproduction interdite?........................................................... 26 §§ 3.2.3. The Frankfurt School’s Merits in Later Developments...................................................................................................... 30. § 3.3.. The Reception of the Concept of Cultural Industries in Economics...................................... 34. §§ 3.3.1. The Convergence of Politics and Economics ...................................................................................................................... 34 §§ 3.3.2. A Political Economy of the Cultural Industries: The Work of Nicholas Garnham ..................................................... 34 §§ 3.3.3. Economics of Culture or Cultural Economics..................................................................................................................... 39. § 3.4.. The Concept’s Itinerary from Philosophy to International Law ............................................. 43. §§ 3.4.1. From the Frankfurt School to the Canada-United States Free Trade Agreement........................................................ 43 §§ 3.4.2. The Role of UNESCO in the Dissemination of the Cultural Industries........................................................................ 45 3.4.2.1. An Overview..............................................................................................................................................................................................................45 3.4.2.2. UNESCO Documents Related to the Cultural Industries..............................................................................................................................46 3.4.2.3. UNESCO Documents Explicitly Referring to the Cultural Industries........................................................................................................49. §§ 3.4.3. A Short Summary ....................................................................................................................................................................... 51. PART II. 53. NAFTA AND THE EVOLUTION OF THE CULTURAL INDUSTRIES’ EXEMPTION ___________ 53 CHAPTER 4 § 4.1.. THE SETTING OF AN IMPORTANT LEGAL PRECEDENT ............................................ 53 NAFTA’s Exemption of the Cultural Industries: A Negotiation History .............................. 53. §§ 4.1.1. The Codification of the “Cultural Industries”...................................................................................................................... 53. ii Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(4) §§ 4.1.2. A Short Negotiation History .................................................................................................................................................... 55 §§ 4.1.3. The Definition of “Cultural Industry” ................................................................................................................................... 57 §§ 4.1.4. The Significance of the Exemption ........................................................................................................................................ 58. PART III. 62. THE CULTURAL INDUSTRIES IN THE LAW OF THE W ORLD T RADE ORGANIZATION ____ 62 CHAPTER 5 § 5.1.. THE EVOLVING TRADING REGIME FROM THE GATT TO THE WORLD TRADE ORGANIZATION ........................................................................................................... 62 General Introductory Remarks................................................................................................. 62. §§ 5.1.1. An Overview of the Status Quo ................................................................................................................................................ 62. § 5.2.. From the Havana Charter to the World Trade Organization.................................................. 65. §§ 5.2.1. §§ 5.2.2. §§ 5.2.3. §§ 5.2.4.. The Early Period: From the Havana Charter to the GATT.............................................................................................. 65 The Evolution of the GATT until the Creation of the World Trade Organization..................................................... 67 Parallels between the Institutional Setting of the ITO and the WTO............................................................................. 68 The Way Forward: Coherence or Conflict? .......................................................................................................................... 71. 5.2.4.1. 5.2.4.2. 5.2.4.3. 5.2.4.4. 5.2.4.5.. CHAPTER 6 § 6.1.. The Point of Departure: The Doha Round........................................................................................................................................................71 The Future: Potentials for Conflict.......................................................................................................................................................................73 Internal and External Coherence ..........................................................................................................................................................................75 The Absence or Inadequacy of Conflict Rules ..................................................................................................................................................76 Coherence or Conflict: The Implications............................................................................................................................................................79. TRADE IN GOODS: THE GENERAL AGREEMENT ON TARIFFS AND TRADE .............. 80 The General Agreement on Tariffs and Trade (GATT 1994).................................................. 80. §§ 6.1.1. The Constitutional Values of the WTO/GATT System: Comparative Advantage, Reciprocity, MFN Clause and NT Principle................................................................................................................................................................................ 80 6.1.1.1. Comparative Advantage ..........................................................................................................................................................................................80 6.1.1.2. Reciprocity, Most-Favoured-Nation, National Treatment and Flexibility ..................................................................................................81. § 6.2.. Article IV GATT Relating to Cinematograph Films ............................................................... 85. §§ 6.2.1. The Regulatory Scope................................................................................................................................................................ 85 §§ 6.2.2. The Historical Background and Regulatory Environment of Article IV GATT.......................................................... 86 6.2.2.1. Technological Novelty and the Resulting Impact of the New Medium......................................................................................................86 6.2.2.2. National and International Regulatory Responses: The Blum-Byrnes Agreement ...................................................................................89. §§ 6.2.3. Cinematograph Films and Television Programming........................................................................................................... 91 6.2.3.1. Television: From Political Cooperation to International Trade Cooperation ............................................................................................91 6.2.3.2. The Controversy over Television in the Sphere of International Trade......................................................................................................94. §§ 6.2.4. The Significance of Screen Quotas Today ............................................................................................................................ 98 §§ 6.2.5. The Legacy of Article IV GATT...........................................................................................................................................100. § 6.3.. Antidumping, Subsidies, and Countervailing Duties – Articles VI and XVI GATT............. 103. §§ 6.3.1. Trade Creating or Inhibiting Practices .................................................................................................................................103 §§ 6.3.2. Dumping and Subsidies in the GATT: An Evolutionary Perspective...........................................................................103 6.3.2.1. Article VI GATT and Subsequent Developments ........................................................................................................................................ 103 A. The Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994................................ 105 B. The Agreement on Subsidies and Countervailing Measures .................................................................................................................. 105 C. Summary ............................................................................................................................................................................................................. 106. §§ 6.3.3. Subsidies, Antidumping and Countervailing Duties in Connection with the Cultural Industries ...........................106 6.3.3.1. General Remarks.................................................................................................................................................................................................... 106 6.3.3.2. Dumping and Price Discrimination in the Cultural Industries ................................................................................................................... 107 6.3.3.3. Subsidies and Countervailing Duties in the Realm of the Cultural Industries......................................................................................... 112. §§ 6.3.4. Subsidies and Dumping: Some of the Challenges Ahead ................................................................................................115. § 6.4.. The General Exceptions of Articles XX GATT and XVI GATS ............................................ 118. §§ 6.4.1. General Remarks on the Nature and Interpretation of Exceptions ..............................................................................118 6.4.1.1. The Need for Flexibility: Some Theoretical Considerations........................................................................................................................ 118 6.4.1.2. Exceptions in the GATT/WTO Framework ................................................................................................................................................. 119 A. Reconciling Trade with Non-Trade Issues................................................................................................................................................. 119 B. The Role of Article XX GATT..................................................................................................................................................................... 119 C. The Interpretation of Article XX GATT.................................................................................................................................................... 121 D. The Constitutional Problematic Concerning the Interaction of the General Exception of GATT, GATS and TRIPS......... 123. §§ 6.4.2. Equilibrium Lost?: The Relevance of the General Exceptions for the Cultural Industries ......................................124 §§ 6.4.3. The Protection of “Public Morals”: Par. a) of Articles XX GATT and XIV GATS.................................................125 6.4.3.1. Facts and Definitional Problems........................................................................................................................................................................ 125 6.4.3.2. Interpretative Methods and Conclusive Remarks .......................................................................................................................................... 129. §§ 6.4.4. Compliance with Laws or Regulations: Par. d) Art. XX GATT/Par. c) Art. XIV GATS........................................129. iii Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(5) §§ 6.4.5. The Protection of National Treasures of Artistic, Historic or Archaeological Value ................................................130 6.4.5.1. Preliminary Remarks on the Relevance of “National Treasures” for the Cultural Industries ............................................................. 130 6.4.5.2. A Short Presentation of the Problem................................................................................................................................................................ 131 6.4.5.3. Excursus: The Emergence and the Evolution of the Concept of Cultural Property............................................................................. 133 A. The Historical Development ......................................................................................................................................................................... 133 B. Definitions of Cultural Property ................................................................................................................................................................... 136 C. “National Treasures” versus “Cultural Property”..................................................................................................................................... 137. §§ 6.4.6. A final Evaluation of Articles XX GATT and XIV GATS.............................................................................................139 6.4.6.1. Major Difficulties with the Cultural Industries in Relation to the General Exceptions........................................................................ 139 6.4.6.2. A Short Outlook .................................................................................................................................................................................................... 140. § 6.5.. The Security Exceptions of Articles XXI GATT, XIVbis GATS and 73 TRIPS ..................... 142. §§ 6.5.1. The Security Exception: Certain Parallels to the ‘Exception Culturelle’?...........................................................................142 6.5.1.1. International Trade versus National Security: “Trade Follows the Flag”................................................................................................. 143 6.5.1.2. The Cultural Industries as Implements of War: “Trade follows the Film”, and “War Follows...?”................................................... 147. §§ 6.5.2. Security versus Culture: A Critical Evaluation of the Character of Exceptions ..........................................................150. CHAPTER 7 § 7.1.. TRADE IN SERVICES: THE GENERAL AGREEMENT ON SERVICES (GATS)............. 152 The Rise of Services in International Trade ........................................................................... 152. §§ 7.1.1. From the GATT 1947 to the GATS 1994..........................................................................................................................152 §§ 7.1.2. The ‘Exception Culturelle’ during the Uruguay Round Negotiations ................................................................................154 7.1.2.1. The History of the ‘Exception Culturelle’ ............................................................................................................................................................. 154 7.1.2.2. The Scope of the ‘Exception Culturelle’................................................................................................................................................................ 156 A. Cultural Exclusion Clause............................................................................................................................................................................... 156 B. Cultural Exception Clause .............................................................................................................................................................................. 156 C. Cultural Specificity Clause............................................................................................................................................................................... 157. §§ 7.1.3. The Status Quo and Consequences of the “Agreement to Disagree”.............................................................................157. § 7.2.. The GATS’ Legal Framework ................................................................................................. 159. §§ 7.2.1. The General Scope and the Guiding Constitutional Principles ......................................................................................159 §§ 7.2.2. Selected GATS Provisions and Some Cultural Considerations ......................................................................................161 7.2.2.1. Free Movement of Persons, Economic Integration and Labour Markets Integration Agreements.................................................. 161 7.2.2.2. Participation of Developing Countries, Technology, Competition and Subsidies................................................................................. 162 7.2.2.3. The GATS Regime and the Cultural Industries ............................................................................................................................................. 163. §§ 7.2.3. Cultural Specificity – Gone with the GATS 1994?............................................................................................................167 7.2.3.1. A Short Résumé of the Facts and Findings..................................................................................................................................................... 167 7.2.3.2. Some Parameters for the Services Negotiations............................................................................................................................................. 168 A. The 1990 Note on Matters Relating to Trade in Audiovisual Services................................................................................................ 169 B. The 1998 Note on Audiovisual Services and WTO Members Post-Uruguay Round Submission in AV Services .................. 170 7.2.3.3. A Final Remark on the Services Negotiations ................................................................................................................................................ 174. CHAPTER 8 § 8.1.. TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS (TRIPS) ........ 176 The Nature and Rise of Intellectual Property Rights in International Trade ....................... 176. §§ 8.1.1. Remarks on the Relevance of Intellectual Property Rights for the Cultural Industries .............................................176 §§ 8.1.2. The Historical Evolution: From Intellectual Cooperation to Intellectual Property Rights under the TRIPS Agreement .................................................................................................................................................................................180 8.1.2.1. A Synopsis of Substantive Developments and Institutional Aspects........................................................................................................ 180 8.1.2.2. Reasons for the Inclusion of IPRs in the WTO: On the Entwinement of Trade with IPRs .............................................................. 184. § 8.2.. The Agreement on Trade-Related Aspects of Intellectual Property Rights .......................... 188. §§ 8.2.1. The Legal Framework..............................................................................................................................................................188 8.2.1.1. The Guiding Principles......................................................................................................................................................................................... 188 A. The Preamble, Main Principles and Objectives......................................................................................................................................... 188 B. National Treatment and Most-Favoured-Nation Treatment................................................................................................................. 189 C. Transparency...................................................................................................................................................................................................... 190 D. Flexibility............................................................................................................................................................................................................. 190 8.2.1.2. The Scope and Basic Provisions of the TRIPS Agreement......................................................................................................................... 192 A. General Remarks............................................................................................................................................................................................... 192 B. Copyright and Related Rights Protection under the TRIPS Agreement............................................................................................. 193 C. Some General Problems Related to the TRIPS Agreement................................................................................................................... 195. §§ 8.2.2. TRIPS Case Law Related to the Cultural Industries .........................................................................................................195 A. Cases in the Sphere of the Cultural Industries........................................................................................................................................... 195 a.) Japan – Measures Concerning Sound Recordings .............................................................................................................................................. 195 b.) Ireland/EC – Measures Affecting the Grant of Copyright and Neighbouring Rights...................................................................................... 196 c.) Greece/EC – Enforcement of Intellectual Property Rights for Motion Pictures and Television Programs ........................................................ 197 d.) United States – Section 110(5) of the US Copyright Act ................................................................................................................................ 198 B. A Short Evaluation of the Cases and Some Interpretative Issues......................................................................................................... 202. § 8.3.. The Nexus of Trade, Culture and Intellectual Property Rights: A Summary .......................207. §§ 8.3.1. Résumé of the Achievements of the TRIPS Agreement: Its Merits and Deficiencies...............................................207 §§ 8.3.2. A Cultural Exception for Intellectual Property Rights?....................................................................................................208. iv Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(6) CHAPTER 9 § 9.1.. THE CANADA PERIODICAL CASE: A CASE STUDY .....................................................211 NAFTA and the WTO: The Setback of the Canada Periodicals Case................................... 211. §§ 9.1.1. Introductory Remarks on Regionalism and the NAFTA/WTO Relationship............................................................211 §§ 9.1.2. The Background of the Case..................................................................................................................................................215 §§ 9.1.3. Facts, Arguments and Findings .............................................................................................................................................216 9.1.3.1. The Panel Report ................................................................................................................................................................................................... 216 9.1.3.2. The Appellate Body Report................................................................................................................................................................................. 221 9.1.3.3. The Aftermath of the Canada – Periodicals Case................................................................................................................................................ 222. § 9.2.. A Critical Evaluation of the Canada Periodicals Case and the Cultural Exemption.............224. §§ 9.2.1. An Important Legal Precedent for the Global Culture and Trade Debate ..................................................................224 §§ 9.2.2. Concluding Remarks................................................................................................................................................................228. CHAPTER 10. THE CULTURAL INDUSTRIES UNDER THE WTO: A RETROSPECTIVE SUMMARY AND THE WAY FORWARD................................................................................................... 229. § 10.1. A Retrospective Summary on the International Trading Regime .........................................229 §§ 10.1.1. International Trade Law between Coherence, Constitutionalism and Culture............................................................229 10.1.1.1. Introduction ............................................................................................................................................................................................................ 229 10.1.1.2. The Major Changes in the International Trade Regime: Law as a Process.............................................................................................. 229 10.1.1.3. The Cultural Industries under the WTO: An Evaluation of the Current State of Affairs.................................................................... 230. § 10.2. The Legacy of Article IV GATT and the Future of Culture in the WTO ..............................234 §§ 10.2.1. Article IV GATT Revisited: A Sleeping Beauty? ...............................................................................................................234 §§ 10.2.2. Possible Options for the Reconciliation of Culture and Trade within the WTO .......................................................235 10.2.2.1. Preliminary Considerations for the Cultural Adjustment of the WTO System ...................................................................................... 235 10.2.2.2. Exclusion Clauses, Exceptions, Waivers, Understandings or Annexes .................................................................................................... 235 10.2.2.3. An Enabling or Integration Clause for Culture .............................................................................................................................................. 237 10.2.2.4. Cooperation, Power Sharing and the Delegation of Competences to Specialised Agencies ............................................................... 238 10.2.2.5. An International Agreement on Culture or a New Instrument on Cultural Diversity (NICD).......................................................... 240 A. An International Agreement on Cultural Diversity .................................................................................................................................. 241 B. A Critical Evaluation of the Proposal .......................................................................................................................................................... 243 C. Preliminary Draft Convention on the Protection of the Diversity of Cultural Contents and Artistic Expressions ................. 244 a.) Avant Propos: A Chronology of Events ............................................................................................................................................................ 244 b.) The Preliminary Draft Text .............................................................................................................................................................................. 246 c.) A Critical Evaluation of the Work in Progress ................................................................................................................................................ 247. §§ 10.2.3. Conclusive Remarks on the Optional Amendments to the WTO Framework ..........................................................249. PART IV. 250. T H E C U L T U R A L I N D U S T R I E S : T H E STRANGE CASE OF THE EUROPEAN UNION___ 250 CHAPTER 11. THE EUROPEAN UNION IN A GLOBAL CONTEXT ................................................... 250. § 11.1. Prologue...................................................................................................................................250. CHAPTER 12. THE INTERPLAY OF CULTURE AND TRADE IN VARIOUS INTEGRATION STEPS...... 256. § 12.1. The History of Institutions in Europe: From the Year 1945 to the Present ...........................256 §§ 12.1.1. §§ 12.1.2. §§ 12.1.3. §§ 12.1.4.. General Preliminary Remarks ................................................................................................................................................256 The Institutional Origins of European Integration after World War II: A Contextual Approach..........................256 Institutional Trialogues between Peace, Trade and Culture ............................................................................................261 European Integration and the Cultural Industries.............................................................................................................263. § 12.2. The EU’s Legal Framework With Regard to the Cultural Industries....................................265 §§ 12.2.1. A Chronology of the Principal Legal Provisions Governing Trade and Culture ........................................................265 §§ 12.2.2. The Basic Legal Framework for Economic Integration...................................................................................................265 12.2.2.1. The Rome Treaty: A Static Beginning .............................................................................................................................................................. 265 12.2.2.2. Changes and Amendments to the Rome Treaty or a Creeping ‘Culturification’ of Trade................................................................... 267. CHAPTER 13. INTEGRATION DYNAMICS OF CULTURE AND TRADE .............................................. 270. § 13.1. The First Stage: 1958-1974 .......................................................................................................270 §§ 13.1.1. The Immediate Agenda...........................................................................................................................................................270 §§ 13.1.2. Free Movement of Goods ......................................................................................................................................................271 13.1.2.1. Customs Union and Common Customs Tariff.............................................................................................................................................. 271 13.1.2.2. Non-Discrimination and the Elimination of Quantitative Restrictions.................................................................................................... 272. §§ 13.1.3. Free Movement of Persons, Services and Capital..............................................................................................................276 13.1.3.1. Free Movement of Workers................................................................................................................................................................................ 277 13.1.3.2. Right of Establishment and the Free Movement of Services and Capital................................................................................................ 278. v Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(7) §§ 13.1.4. Résumé of the First Stage and the Transition towards the Second Stage.....................................................................280. § 13.2. The Second Stage: 1975-1991 ...................................................................................................283 §§ 13.2.1. From Mercatus Communis to Sensus Communitatis: Strengthening the Web of Community Law ...................................283 §§ 13.2.2. From the Common Market to the Internal Market...........................................................................................................283 13.2.2.1. Prelude: Juggling Culture and Trade: “Community action in the cultural sector”.................................................................................. 283 13.2.2.2. Case Law Touching Upon the Sphere of Culture.......................................................................................................................................... 289 13.2.2.3. The Rise of the Cultural Industries: ‘A fresh boost for Culture in the European Community’.......................................................... 290 A. Overview of the Case Law in the Cultural Sector..................................................................................................................................... 291 B. The Beginning Process of Positive Integration in the Cultural Sector................................................................................................. 304. §§ 13.2.3. The Final Years from the Single European Act (SEA) and to the Maastricht Treaty................................................309 §§ 13.2.4. Résumé of the Second Stage and Leading Over to the Third Stage ..............................................................................311. § 13.3. The Third Stage: 1992-2005 ..................................................................................................... 313 §§ 13.3.1. The Maastricht Treaty and Following Changes to the Treaties with Regard to Culture ...........................................313 13.3.1.1. Introduction: A Short Chronology of the Major Events.............................................................................................................................. 313 13.3.1.2. The Amendments to the European Union’s Treaty Structure: A Cultural Perspective........................................................................ 316. §§ 13.3.2. An Overview of the Principal Articles Touching Upon the Cultural Industries.........................................................316 13.3.2.1. The Treaty on European Union......................................................................................................................................................................... 316 13.3.2.2. The Treaty Establishing the European Community...................................................................................................................................... 317 A. Article 151 [ex 128] TEC on Culture ........................................................................................................................................................... 317 B. Article 157 [ex 130] TEC on Industry an d Article 158 [ex 130a] TEC on Economic and Social Cohesion ............................. 320 C. Rules Applying to Undertakings (Article 81 TEC) and Aids Granted by States (Art.87 TEC)..................................................... 323 D. The External Dimension of Culture in the European Union................................................................................................................ 326 a.) Common Commercial Policy: Articles 131-134 TEC ..................................................................................................................................... 326 b.) Development Cooperation: Articles 177-181 TEC.......................................................................................................................................... 330. §§ 13.3.3. The Cultural Industries: An Evaluation of the Changes in the Treaty Framework and Case Law .........................333 13.3.3.1. General Remarks.................................................................................................................................................................................................... 333 13.3.3.2. The Case Law Experience I: General Cultural Considerations................................................................................................................... 334 13.3.3.3. The Case Law Experience II: Specific Considerations of the Cultural Industries.................................................................................. 336 13.3.3.4. Résumé of the Case Law Experience in an Interinstitutional Context ..................................................................................................... 342. §§ 13.3.4. The Treaty Establishing a Constitution for Europe and an Open-ended Résumé..............................................................344 13.3.4.1. A Short Overview of the Draft Treaty on the European Constitution with Regard to Culture......................................................... 344 13.3.4.2. Résumé of the Third Stage and a Short Outlook........................................................................................................................................... 347. CHAPTER 14. CONCLUSIVE REMARKS ON THE EUROPEAN UNION .............................................. 351 § 14.1. From a Strange Case to a New Paradigm? ............................................................................. 351 14.1.1.1. A Retrospective Summary ................................................................................................................................................................................... 351 14.1.1.2. The Cultural Industries in a Wider Context: Framing the Debate............................................................................................................. 353. PART V. 355. C O N C L U S I O N ___________________________________________________________ 355 CHAPTER 15. THE METAPHOR OF CULTURE AND TRADE REVISITED.......................................... 355 § 15.1. The Cultural Industries or ‘Contraria sunt complementa’’ ....................................................355 §§ 15.1.1. Principal Remarks.....................................................................................................................................................................355 15.1.1.1. Why Are Cultural Goods and Services Different?......................................................................................................................................... 356 15.1.1.2. Why Should The Cultural Industries Receive a Different Legal Treatment? .......................................................................................... 358 15.1.1.3. Why Are Cultural Policies and Trade Policies Not Mutually Excluding Each Other?.......................................................................... 359 15.1.1.4. How Should the Multilateral Trading System Respond to Cultural Concerns?...................................................................................... 362. Bibliography............................................................................................................................................................................366. vi Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(8) ACKNOWLEDGEMENTS. My special thanks and great gratitude belong to my father and my grandmother without whose permanent encouragement and heartfelt support this thesis would have neither been written nor finished. As far as my work as a researcher is concerned, I would like to first thank my supervisor, Prof. Bruno de Witte, for his critical opinion and legal expertise during the process of drafting this thesis. Generally, I am grateful for the existence of the European University Institute and its entire staff for providing me with an interesting and stimulating research environment of which I would like to explicitly mention the numerous seminars given by Prof. Dupuy and Prof. Alston, Prof. Joerges, my supervisor and Prof. de Bùrca, Prof. Amato and Prof. Ehlermann, Prof. Petersmann, Prof. Cafaggi, as well as Prof. Ziller, which inspired important aspects of this thesis. Equally, I want to express my gratitude to Prof. Francioni for his kind advice and support. In the phase of finishing this thesis, I also want to emphasise the very kind and efficient assistance I received from the Institute’s Language Institute. For the great studying experience, the cordial assistance, the many ideas and useful materials that I received, I want to mention Prof. de Mestral and Prof. Glenn representative for the entire “McGill family” where the initial idea for this thesis was born. Furthermore, I want to acknowledge the significance of the good friends and colleagues that made my work on this thesis a joyful, fascinating and unforgettable experience. Particular thanks to Stefan, Monica, Mike, Nina, Joe, Carsten, Tambiama for the long nightly discussions and many other delightful activities. However, no appropriate words can duly describe here my gratitude to Sanam for all the joy and support received during all these years. In doing the research on which this thesis is based, it is important to mention the positive stimulation that derived from the participation in several conferences at the EUI as well as in different parts of the world and to name especially Prof. Alison Harcourt, Prof. Rachel Craufurd Smith, Gabriel Toggenburg and Jason Bristow. In this context, I would also like to thank the Government of Japan and the Mission of Japan to the EU for the participation in fall 2003 in the unique programme called “Japan Study Tour”. Finally, I also want to thank Stefan Meyer and Martin Kleiner for their great friendship and for providing me with materials, Kernöl and other essentials from home during all these years abroad.. vii Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(9) ABBREVIATIONS A.J.I.L. AB AD Am. J. Comp. L. Am. J. Econ. & Sociol’y Am. U. Int’l L. Rev. Am. U.J. Int’l L. & Pol’y Annals Am. Acad. Pol. & Soc. Sci. Ariz. J. Int’l & Comp. Law L. Ariz. L. Rev. Asper Rev. Int’l Bus. & Trade L. ATC Austrian J. Pub & Int’l L. Rev. AV B.C. Int’l & Comp. L. Rev. B.I.S.D. B.U. Int’l L.J. B.U. J. Sci. & Tech. L. B.U. L. Rev. B.Y.I.L. BBC Berkeley J. Int’l L. BIRPI BITs BOP Brooklyn J. Int’l L. Buffalo L. Rev. C. de D. C.M.L.R. C.M.L.R. C.P.I. Calif. L. Rev. Can. J. Communic. Can.-Amer. Pub. Pol’y Can.-U.S. L.J. Cardozo Arts & Ent. L.J. Cardozo L. Rev. Case W. Res. J. Int’l L. Cath. U.L. Rev. CCFTA CCRFTA CD CFSP Chi.-Kent. L. Rev. CIFTA CISG CMOs. American Journal of International Law Appellate Body Anti-Dumping American Journal of Comparative Law American Journal of Economics and Sociology American University International Law Review American University Journal of International Law & Policy Annals of the American Academy of Political and Social Sciences Arizona Journal of International and Comparative Law Arizona Law Review Asper Review of International Business and Trade Law Agreement on Textiles and Clothing Austrian Journal of Public and International Law Review Audiovisual Boston College International and Comparative Law Review Basic Instruments and Selected Documents (GATT) Boston University International Law Journal Boston University Journal of Science and Technology Law Boston University Law Review British Yearbook of International Law British Broadcasting Corporation Berkeley Journal of International Law United International Bureau for the Protection of Intellectual Property Bilateral Investment Treaties Balance-of-Payments Brooklyn Journal of International Law Buffalo Law Review Cahiers De Droit Common Market Law Review Common Market Law Review Cahiers de proprieté intellectuelle California Law Review Canadian Journal of Communications Canadian-American Public Policy Canada-United States Law Journal Cardozo Arts & Entertainment Law Journal Cardozo Law Review Case Western Reserve Journal of International Law Catholic University Law Review Canada-Chile Free Trade Agreement Canada-Costa Rica Free Trade Agreement Compact Disc Common Foreign and Security Policy Chicago-Kent Law Review Canada-Israel Free Trade Agreement Convention on Contracts for the International Sale of Goods Collective Management Organizations (or Performing Rights. viii Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(10) COE Colo. J. Int’l Envtl. L. & Pol’y Colum. Human Rights L. Rev. Colum. J. Envtl. L. Colum. J. Eur. L. Colum. J. Transnat’l L. Colum. L. Rev. Comm. L. & Pol’y COPUOS Cornell Int’l L.J. Cornell L.Q. CPC CU(s) Currents Int’l Trade L.J. CUSFTA Dalhousie J. Legal Stud. Den. J. Int’l L. & Pol’y DFAIT Dick. J. Int’l L. Dick. L. Rev. DNS DOC DSB DSU Duke J. Comp. & Int’l L. Duke L.J. E.B.L.R. E.C.L.R. E.C.R. E.F.A.R. E.J.I.L. E.J.L.&Econ. E.L.J. E.L.R. E.P.L. E.R.P.L. E.T.S. EBU EC EC Bulletin ECSC EDC EEC Emory Int’l L. Rev. EPC EU Eur. J. Commun. EURATOM. Organizations) Council of Europe Colorado Journal of International Law and Policy Columbia Human Rights Law Review Columbia Journal of Environmental Law Columbia Journal of European Law Columbia Journal of Transnational Law Columbia Law Review Communication Law and Policy Committee on the Peaceful Uses of Outer Space Cornell International Law Journal Cornell Law Quarterly Provisional Central Product Classification Custom Union(s) Currents: International Trade Law Journal Canada-United States Free Trade Agreement Dalhousie Journal of Legal Studies Denver Journal of International Law & Policy [Canadian] Department of Foreign Affairs and International Trade Dickinson Journal of International Law Dickinson Law Review Domain Name System Department of Commerce (US) Dispute Settlement Body Dispute Settlement Understanding Duke Journal of Comparative & International Law Duke Law Journal European Business Law Review European Competition Law Review European Court Reports European Foreign Affairs Review European Journal of International Law European Journal of Law and Economics European Law Journal European Law Review European Public Law European Review of Private Law European Treaty Series European Broadcasting Union European Community(-ies) Bulletin of the European Communities European Coal and Steel Community European Defence Community European Economic Community Emory International Law Review European Political Community European Union European Journal of Communication Atomic Energy Community. ix Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(11) FCC FDI Fed. Comm. L.J. Fed. Comm. L.J. Fla. J. Int’l L. Fn Fordham Int’l L.J. Fordham Intell. Prop. Media & Ent. L.J. FTAA GATS (AGCS) GATT (AGTDC) Geo. L.J. Geo. Wash. Int’l L. Rev. GW J. Int’l L. & Econ. Harv. Int’l L.J. Harv. J. Law & Tec Hofstra L. Rev. Hous. J. Int’l L. I.L.M. I.Y.I.L. IBRD ICANN ICAO ICC ICCPR ICESCR ICIC ICJ ICJ REP. ICSID IDA IFC IICI ILO ILSA Ind. Int’l & Comp. L. Rev. Ind. J. Global Leg. Stud. Ind. L.J. Int’l J. Comm. L. & Pol’y Int’l J. Cult. Pol’y Int’l J. Urban & Regional Res. INTELSAT IP IPRs ITO ITU. Federal Communications Commission (US) Foreign Direct Investment Federal Communications Law Journal Federal Communications Law Journal Florida Journal of International Law Footnote Fordham International Law Journal Fordham Intellectual Property, Media & Entertainment Law Journal Free Trade Area of the Americas General Agreement on Trade in Services (L’Accord General Sur Le Commerce Des Services) General Agreement on Tariffs and Trade (L'Accord general sur les tarifs douaniers et le commerce) Georgetown Law Journal George Washington International Law Review George Washington Journal of International Law & Economics Harvard International Law Journal Harvard Journal of Law & Technology Hofstra Law Review Houston Journal of International Law International Legal Materials The Italian Yearbook of International Law International Bank for Reconstruction and Development Internet Corporation for Assigned Names and Numbers International Civil Aviation Organization International Chamber of Commerce International Covenant on Civil and Political Rights International Covenant on Economic, Social and Cultural Rights International Committee of Intellectual Co-operation / Comité international de coopération intelectuelle International Court of Justice International Court of Justice Reports International Centre for Settlement of Investment Disputes International Development Association International Finance Corporation International Institute of Intellectual Co-operation / Institut international de coopération intellectuelle International Labour Organization Iran and Libya Sanctions Act of 1996 Indiana International & Comparative Law Review Indiana Journal of Global Legal Studies Indiana Law Journal International Journal of Communications Law and Policy International Journal of Cultural Policy International Journal of Urban and Regional Research International Telecommunications Satellite Organization Intellectual Property Intellectual Property Rights International Trade Organization International Telecommunication Union. x Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(12) J. Contemp. Legal Issues J. Cult. Econ. J. Democr. J. Econ. Surveys J. Int’l L. & Bus. J. Intell. Prop. L. J. Legal Plur. J. Netw. Ind. J. World T. J.A.H. J.C.M.S. J.E.I.H. J.E.P.P. J.I.E.L. J.J.S. J.L. & Tech. J.L.& Soc. JHA Kan. J.L. & Pub. Pol’y L.I.E.I. L.N.T.S. La. L. Rev. Law & Pol’y Int’l Bus. Loy. L.A. Ent. L.J. Loy. L.A. Int’l & Comp. L.J. M.L.R. MAI (AMI) Man. L.J. McGill L.J. Md. J. Int’l L. & Trade MFN Mich. J. Int’l L. Mich. L. Rev. Mich. St. DCL L. Rev. MIGA Minn. Intell. Prop. Rev. Minn. J. Global Trade N. Dak. L. Rev. N. Ill. U. L. Rev. N.C.J. Int’l Law & Com. Reg. N.C.L. Rev. N.Y.U. J. Int’l L. & Pol. N.Y.U.L. Rev. NAFTA NAFTA L. & Bus. Rev. Am. New Eng.L. Rev. NGO(s) NICD NIIO. Journal of Contemporary Legal Issues Journal of Cultural Economics Journal of Democracy Journal of Economic Surveys Journal of International Law & Business Journal of Intellectual Property Law Journal of Legal Pluralism Journal of Network Industries Journal of World Trade Journal of American History Journal of Common Market Studies Journal of European Integration History Journal of European Public Policy Journal of International Economic Law Journal of Jewish Studies Journal of Law & Technology Journal of Law and Society Justice and Home Affairs (Cooperation in the fields of) Kansas Journal of Law & Public Policy Legal Issues of Economic Integration League of Nations Treaty Series Louisiana Law Review Law and Policy in International Business Loyola of Los Angeles Entertainment Law Journal Loyola of Los Angeles International & Comparative Law Journal The Modern Law Review Multilateral Agreement on Investment (Accord multilatéral sur l'investissement) Manitoba Law Journal McGill Law Journal Maryland Journal of International Law & Trade Most-Favoured Nation Michigan Journal of International Law Michigan Law Review Law Review of Michigan State University – Detroit College of Law Multilateral Investment Guarantee Agency Minnesota Intellectual Property Review Minnesota Journal of Global Trade North Dakota Law Review Northern Illinois University Law Review North Carolina Journal of International Law & Commercial Regulation North Carolina Law Review New York University School of Law Journal of International Law and Politics New York University Law Review North American Free Trade Agreement NAFTA: Law and Business Review of the Americas New England Law Review Non-Governmental Organization(s) New Instrument on Cultural Diversity New International Information Order. xi Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(13) NT Nw. J. Int’l L. & Bus. Nw. U.L. Rev. O.J. OECD OEEC Ohio St. L.J. Ottawa L. Rev. P.C.I.J. Pac. Rim L. & Pol’y Pace Int’l L. Rev. PCA Penn St. Int’l L. Rev. PSB R.D.I. R.I.D.E. R.I.W. R.J.T. R.M.C. R.T.D.E. Rabels Z. Rec. des Cours Rev. D.I.P. RTA(s) SAGIT Santa Clara Computer & High Tech. L.J. Santa Clara L. Rev. SCM SEA SMEs Stan. J. Int’l L. Stan. L. Rev. Suffolk Transnat’l L. Rev. Syracuse J. Int’l L. & Com. Tax L. Rev. TEC TECSC TEU TRIMS TRIPS Tul. L. Rev. TV U. Mich. J.L. Ref. U. Pa. J. Const. L. U. Pa. J. Int’l Bus. L. U. Pa. J. Int’l Econ. L. U. Pa. L. Rev. U.N.T.S. U.S.F.L. Rev.. National Treatment Northwestern Journal of International Law & Business Northwestern University Law Review Official Journal Organisation for Economic Cooperation and Development Organisation for European Economic Construction Ohio State Law Journal Ottawa Law Review Permanent Court of International Justice Pacific Rim Law & Policy Journal Pace International Law Review Permanent Court of Arbitration Penn State International Law Review Public Service Broadcasting Revue de Droit International, de Sciences Diplomatiques et Politiques Revue Internationale de Droit Économique Recht der Internationalen Wirtschaft Revue juridique Thémis Revue du marché commun et de l’union européenne Revue trimestrielle de droit européen Rabels Zeitschrift für ausländisches und internationales Privatrecht Recueil des Cours Revue générale de droit international public Regional Trade Agreement(s) (Cultural Industries) Sectoral Advisory Group on International Trade Santa Clara Computer and High Technology Law Journal Santa Clara Law Review Subsidies and Countervailing Measures Single European Act Small and Medium Enterprises Stanford Journal of International Law Stanford Law Review Suffolk Transnational Law Review Syracuse Journal of International Law and Commerce New York University Tax Review Treaty Establishing the European Communities Treaty Establishing the European Coal and Steel Community Treaty on European Union (Agreement on) Trade-Related Investment Measures (Agreement on) Trade-Related Aspects of Intellectual Property Rights Tulane Law Review Television University of Michigan Journal of Law Reform University of Pennsylvania Journal of Constitutional Law University of Pensylvania Journal of International Business Law University of Pennsylvania Journal of International Economic Law University of Pennsylvania Law Review United Nations Treaty Series University of San Francisco Law Review. xii Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(14) U.T. Fac. L. Rev. UCLA J. Int’l L. & For. Aff. UDHR UDRP UNCITRAL UNCTAD UNECE UNEP UNESCO UNIDROIT UPU US USSR Va. J. Int’l L. Vand. J. Transnat’l L. Vand. L. Rev. VCLT W.R.L.S.I. Wash. U. Global Stud. L. Rev. WIPO Wm and Mary L. Rev. WTO Yale J. Int’l L. Yale L.J. Yearbook of the AAA Z.U.M. ZaoRV ZfRV. University of Toronto Faculty of Law Review UCLA Journal of International Law and Foreign Affairs Universal Declaration of Human Rights Uniform Domain Name Dispute Resolution Policy United Nations Commission on International Trade Law United Nations Conference on Trade and Development United Nations Commission for Europe United Nations Environment Programme United Nations Educational, Scientific and Cultural Cooperation International Institute for the Unification of Private Law Universal Postal Union United States of America Union of Soviet Socialist Republics Virginia Journal of International Law Vanderbilt Journal of Transnational Law Vanderbilt Law Review Vienna Convention on the Law of Treaties Windsor Review of Legal and Social Issues Washington University Global Studies Law Review World Intellectual Property Organization William & Mary Law Review World Trade Organization Yale Journal of International Law Yale Law Journal Yearbook of the Association of the Attenders and Alumni of the Hague Academy of International Law (succeeded by the Hague Yearbook of International Law) Zeitschrift für Urheber- und Medienrecht Zeitschrift für ausländisches öffentliches Recht und Völkerrecht Zeitschrift für Rechtsvergleichung, Int. Privatrecht und Europarecht. xiii Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(15) ABSTRACT. In the universal history of mankind, the concepts “culture” and “trade” have long denominated two important trains of human aspirations and activities. Notwithstanding their great significance for human life in its entirety, they have been widely regarded as belonging to distinct spheres, which were deemed to be difficult, if not impossible, to reconcile. This perception was also widely reflected in the sphere of law, where their respective fields have been subject to separate regimes based on the logic of their mutual exclusivity and expressed in the concept of res extra commercium. By contrast, the concept of “cultural industries”, which was originally derived from the term Kulturindustrie coined by protagonists of the Frankfurt School introduced a new category of cultural goods and services, which began to strongly challenge the traditional legal separation of cultural from economic considerations. Their novelty as well as their more subtle conceptual implications led to the controversy over the treatment of the dual, i.e. both cultural and economic, nature of such goods and services, which surfaced first during the bilateral trade negotiations between Canada and the United States and soon afterwards during the multilateral Uruguay Round negotiations. In the latter, it was the controversy over the exception culturelle that almost derailed the successful establishment of the World Trade Organization (WTO). Since then the problem remains unsolved, and reinforced by the decision of the WTO Panel in the Canada Periodicals Case, the quest for an appropriate conceptual approach allowing for the correct legal answer to the conundrum of culture and trade continues up to this day. In this quest, the present thesis forms an attempt to cast some light on the culture and trade conundrum with a view to isolating options for an appropriate legal response of the multilateral trading system under the WTO. It follows the evolution of the concept of cultural industries, from its birth in the context of critical social theory across the field of political economy to its first appearance in the legal context with the 1988 Canada-United States Free Trade Agreement. After a short analysis of the cultural industries exemption in the North American context, its focus shifts to the GATT/WTO system of which the basic provisions are discussed in connection with the category of cultural goods and services known as the cultural industries. Their critical analysis yields the present imperfections inherent in the WTO system as a corollary of the fragmentation of the international legal order. Before some final conclusions are drawn, these imperfections are contrasted with the relevant experiences within the context of the process of European integration from the European Economic Community to the European Union.. xiv Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(16) Introduction. INTRODUCTION The flame knows no rest, for it lives in perpetual conflict between two opposite tendencies. On the one hand, it cleaves to its wick, drinking thirstily of the oil that fuels its existence. At the same time, it surges upward, seeking to tear free of its material tether. Y. Tauber, Beyond the Letter of the Law1. Chapter 1. THE CULTURAL INDUSTRIES IN INTERNATIONAL TRADE LAW. In the early 1990s, a controversial debate over the so-called “exception culturelle” marked the end of the Uruguay Round negotiations and almost derailed their successful conclusion hence threatening seriously the creation of the World Trade Organization (WTO). More precisely, the controversy saw numerous contracting parties of the General Agreement on Tariffs and Trade (GATT) but, in particular, Canada and the European Union (EU) on the one side and the United States of America (US) on the other, disagree as to how to frame, and hence how to answer, the principal question of whether certain categories of cultural goods and services are different from other, so-called “ordinary” products. Building upon this differentiation, the next controversial question is whether these cultural goods and services should receive treatment other than their “ordinary” counterparts. Such special treatment, which was discussed in form of the concept of a cultural exception, and later, in an attempt to find a compromise, in the form of a clause recognising their cultural specificity, in turn, raises the question of how such specific treatment would be implemented legally. Still on a broader level, the controversy also indicates divergent perceptions about not only the function, scope and nature of the multilateral trading regime and especially its ability and duty to reconcile the sphere of trade with the one of culture but also the existence or absence of a coherent international legal order. The background of the controversy was rooted in a broader trend, led by Canada and followed by the EU Member States, to introduce into the sphere of free trade agreements, which proliferated at that time at the regional level, special clauses formally recognising diverse cultural elements inherent in certain categories of goods and services in particular and in the process of economic integration regimes in general. For its part, Canada had insisted on the adoption of an exemption for, what it termed “cultural industry”, in the negotiation of the bilateral Canada-United States Free Trade Agreement (CUSFTA) signed in 1988, whereas the European Union, one year later, adopted the socalled “Television without Frontiers Directive” which reserved, among other things, a certain part of the overall screen time to “European works”, before it adopted a general Treaty provision on culture during the Maastricht Treaty revision process in 1992. Both measures were primarily driven by concerns about manifold cultural identities in Canada and the EU, but, nonetheless, reinforced by the domination of their domestic markets of foreign cultural goods and services, first and foremost originating from the US. Therefore, these measures clearly appeared as a ‘thorn in the side’ of the US, as the world’s largest exporter of cultural products and holder of a dominant market share in the world as much as in these two markets, with market shares of specific industrial sectors reaching sometimes up to 96 per cent.. 1. Y. Tauber, Beyond the Letter of the Law: A Chassidic Companion to the Ethics of the Fathers (New York: Vaad Hanochos Hatmimim, 1995) at 220.. 1 Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.

(17) Introduction. In terms of substantive arguments, the beginning of the debate consisted mainly in the exchange of polemics rather than a constructive dialogue backed by a sound line of argumentation. In abstract terms, these polemics reflected a tendency towards the traditional perspective, which viewed cultural and trade policies as being mutually exclusive and irreconcilable. In the present context, the traditional view has become transformed into a principal denial of, or, in other words, an exaggerated emphasis on, the economic attributes of the cultural industries on one side and a denial of their cultural attributes on the other, with various exceptions confirming the rule. For instance, both Canada and the EU defended their measures by charging the US with “cultural imperialism”2/“cultural colonialism”3 and alluded to the quality of the products by comparing them to “intellectual terrorism”4. The scope of choice and the grounds of legitimacy for the cultural policy objectives they pursued by their respective measures, are reflected in the phrase “C’était l’Etat ou les Etats-Unis”.5 In contrast to this view, the free trade policy aspect was emphasised by the US, which responded by remarking that there is no such a thing as “Canadian culture” or that the reason for their protectionism is purely economic.6 The US extended the same arguments to the European Union’s efforts to protect their existing culture and to create a new European culture.7 For instance, alluding to the weakness of the European film industry, and obviously to France in particular, Carla Hills, the then US trade representative and GATT negotiator, said: “Make films as good as your cheese and you will sell them!”8 Finally, the dominant view in the US was that there exists no specificity of cultural goods and services, famously or infamously, exemplified in the words of former FCC Chairman Mark Fowler, who equalled television to a “toaster with pictures”.9 Such view reflects the common view of culture in the US which has been interpreted as “an enterprise which is capable of making money, by means of cultural industries, including publications, films, videos, music recordings, and radio and television broadcasting”.10 In the end, the conflict over culture in the Uruguay Round negotiations was settled, or better postponed, by the so-called “agreement to disagree”. At the last moment, this provisional settlement allowed for the successful creation of the WTO. Nevertheless, the “armistice” did not last for long, since already one year after the WTO resumed its work in 1995, the US, which felt that it had “lost a battle but not the war”, filed a complaint against various Canadian policies aimed at its domestic. See J.M. Grant, “’Jurassic’ Trade Dispute: The Exclusion of the Audiovisual Sector from the GATT” (1995) 70 Ind. L.J. 1333 at 1335-1336, and 1343. 3 See A.E. Lehmann, “The Canadian Cultural Exemption Clause and the Fight to Maintain an Identity” (1997) 23 Syracuse J. Int’l L. & Com. 187 at 199. 4 See T.M. Murray, “The U.S.-French Dispute over GATT Treatment of Audiovisual Products and the Limits of Public Choice Theory: How an Efficient Market Solution was “Rent-seeking” (1997) 21 Md. J. Int’l L. & Trade 203 at 209, citing a statement by former French conservative Foreign Minister Alain Juppé. 5 See N. Vulser, “Le Canada renforce son protectionnisme” Le Monde (November 14, 1998). 6 See A.M. Carlson, “The Country Music Television Dispute: An Illustration of the Tensions Between Canadian Cultural Protectionism and American Entertainment Exports” (1997) 6 Minn. J. Global Trade 585 at 619. 7 Compare L.L. Garrett, “Commerce versus Culture: The Battle Between the United States and the European Union Over Audiovisual Trade Policies” (1994) 19 N.C.J. Int’l Law & Com. Reg. 553 at 572-576, making observations that indicate that the European Union’s “protection of culture” is a facade for audiovisual trade barriers that primarily serve to protect its audiovisual market from further American dominance. 8 See Murray, supra note 4 at 209. 9 Quoted in C.R. Sunstein, “Television and the Public Interest” (2000) 88 Calif. L. Rev. 499 at 507. 10 Quoted from W. Warnock, Free Trade and the New Right Agenda (Vancouver: New Star Books Ltd., 1988) at 217 in K. Boryskavich & A. Bowler, Trade and Culture: Hollywood North: Tax Incentives and the Film Industry in Canada” (2002) 2 Asper Rev. Int’l Bus. & Trade L. 25 at 25. 2. 2 Neuwirth, Rostam Josef (2005), The Cultural Industries as a Regulatory Challenge for International Trade Law: Insights from the NAFTA, the WTO and the EU European University Institute DOI: 10.2870/50465.