2. General Agreement on Tariffs and Trade Context: Pre-war
depression cured by WWII - unlikely to be a regular economic policy
option. Depression caused by protectionism. Depressions causes
political instability. Political instability causes war Ergo: Need
to end protectionism 3. Harry S. Truman, US President 4. General
Agreement on Tariffs and Trade Thus - US leads campaign for postwar
trade regime based upon: Classic (economic) liberal principle of
comparative advantage. In effect: Tariffs would be lowered Each
country to specialise in production of those goods it produced best
(trading with other countries as appropriate). In theory all
countries would be better off as a result. 5. General Agreement on
Tariffs and Trade 1947: Originally US vision for postwar trade
regime to be encapsulated in creation of International Trade
Organisation. Met domestic opposition. GATT - established as
temporary agreement to provide basis for trade negotiation underway
in Geneva. 6. General Agreement on Tariffs and Trade In consequence
US effectively dominated GATT. For example: The eight trade rounds
that constituted GATT for example, were typically initiated by
grants of negotiating authority from the US congress to the US
President 7. General Agreement on Tariffs and Trade GATT embodies
1st world rules/ assumptions for economic prosperity: Standardised
production, Vast scale of production, Endless expansion of markets
combine to create the engine for global economic growth 8. General
Agreement on Tariffs and Trade GATT based on four norms:
Most-Favoured Nation Reciprocity Exemptions Development Norm 9.
General Agreement on Tariffs and Trade Most-Favoured Nation All
members agree to extend unconditional MFN status to one another -
no country receives preferential treatment not accorded to all
other MFN countries. Any benefits acquired by one country are
automatically extended to all MFN partners Only exceptions to this
rule are customs unions (e.g. EU, NAFTA) 10. General Agreement on
Tariffs and Trade Reciprocity Any country that benefits from
anothers tariff reduction should reciprocate to an equivalent
extent. In theory then, fair and equitable tariff reductions by all
countries are ensured. Taken with the MFN principle, reciprocity is
intended to create a downward spiral of tariffs. 11. General
Agreement on Tariffs and Trade Exemptions Regarded as acceptable
if: temporary imposed for short-term balance-of- payments reasons
country experiencing severe market disruptions due to increased
imports 12. General Agreement on Tariffs and Trade Development Norm
added (from 1965 onwards) allowing: 1. Unilateral/unreciprocated
tariff reductions by developed countries on imports from developing
countries 2. Export subsidies by developing countries. 13. General
Agreement on Tariffs and Trade GATT until the 1980s focused (very
successfully) on reducing manufacturing tariffs: 1948 - 1993
Reduction in official tariffs on manufacturing from 40% to 5%
Global trade increases by factor of four (mainly benefiting 1st
world - by 1990s 20% of the worlds population does 80% of
international trade.) SO - GATT A (BUT NOT THE ONLY) FACTOR BEHIND
GLOBALISATION 14. General Agreement on Tariffs and Trade GATT and
film: 1947 - Preparatory meeting in Geneva. US delegation worked
vigorously to secure agreement for inclusion of provision under
GATT under which all film restrictions would be removed except
quotas on playing time for domestically produced motion pictures.
MPEA Paris Rep, worked closely with the US delegation throughout.
15. GATT Article IV - SPECIAL PROVISIONS RELATING TO CINEMATOGRAPH
FILMS Quantitative regulations relating to films limited to screen
quotas - governments could require the exhibition of cinematograph
films of national origin during a specified minimum proportion of
the total screen time actually utilized, over a specified period of
not less than one year. The quotas were to be subject to
negotiation for their limitation, liberalization or elimination.
16. GATT - From Geneva to Ururguay Despite Article 4, GATT
manufacturing focused until 1980s. By 1990s, however, services
sector outstrips value of manufacturing: 70% of 1st world GDP 50%
of 3rd world GDP GATT slow to recognise this - services notoriously
hard to quantify 17. However de-industrialisation in the 1960s and
1970s has left the US the most indebted nation in the world As of
1993 - the US recorded international trade surpluses from the
aerospace and audiovisual industries - and nowhere else. 18.
Uruguay Round Hence - September 1986 Punta del Este Declaration
placed Trade in Services (TIS) at centre of GATT debates. Driven by
US pressure (in turn influenced by American Express, Citibank and
IBM lobbyists) TIS included: film, TV and broadcast advertising
production and distribution 19. Uruguay Round Cinema used to be
side salad in world commerce - now its the beef. Daniel Toscan du
Plantier - President of French Govt. Film Marketing Body 20.
Uruguay Round US objected to the the following barriers to trade in
audiovisual products: Local media content quotas Restrictions on
foreign ownership of the press Subsidies to screen industries
Subvention and diplomacy designed to assist a/v industries in
exporting their product 21. Uruguay Round The US makes these
objections in the following context: The US government endorses
trust-like behaviour overseas whilst prohibiting it domestically.
The US government has a long history of aiding its own film
industry through: tax-credit schemes, film commission assistance,
State and Commerce Department Representation, The Informational
Media Guaranty Programme 22. Uruguay Round Whats more the Justice
Department is authorised to classify all imported films which it
can ban as political propaganda. 23. Uruguay Round EU A/V Deficit
1992 - 1996 (in $000,000s) 1992 1993 1996 3375 3720 5600 To put
this in context: in 1992 the EU imported $3.7bn in a/v material
from the US whilst the US imported just over $300m (less than 10%
of exports to EU) of Euro a/v material. 24. Uruguay Round Despite
the inclusion of TIS in the UR, the major focus from 1986-93 was on
reducing agricultural export subsidies (e.g. the EUs CAP). Deadline
for agreement December 15 1993. Farm issue settled December 7.
Suddenly replaced by dispute over a/v industries. 25. Uruguay Round
Mickey Kantor Jack Lang US Trade Representative French Minister for
at GATT talks Culture 26. Uruguay Round From the outset of the UR
US attempts to remove support for a/v industries almost universally
opposed, esp. by India, Canada, Japan, Australia, Europe and the
Third World - in the name of cultural sovereignty. In the last
week, however, the dispute became the US versus EU (and mainly
France) 27. Uruguay Round US Position - Sought end to all EU
subsidies and quotas arguing from the precepts of neoclassical
economics for untrammelled play of comparative advantage inside
laws of supply and demand. French position - cultural products are
public as well as private goods with a historical and national
significance which couldnt be captured within economic formulas 28.
Culture is synonymous with the soul of a nation and the memory of
its people, not a good to be bought and sold. Francois Mitterrand
29. Uruguay Round Reason for prolongation of dispute - use of
differing premises: US - justified monopolistic competition on the
grounds of the sovereign consumer French - justified state support
on the ground of the sovereign citizen The consumer was a fully
formed subject making a rational choice in favour of entertainment
and distraction the citizen was an insufficiently knowing subject
in need of education in civics 30. Uruguay Round In Ireland concern
expressed that the US, if successful, would demand end of:
Eurimages Irish Film Board TV Without Frontiersdirective 31.
Uruguay Round French and US dig in their heels. Dec 12 - US accepts
continuation of state subvention of cultural production in Europe
(and elsewhere) but pushed issue of levies on cinema/video
tickets/rentals. 32. Uruguay Round Specifics: French subsidy system
levied an 11% tax on cinema tickets - used to fund some 150 films
per annum Mickey Kantor pointed out that the majority of tickets
sold in France were for US films 33. Uruguay Round Therefore
Jurassic Park subsidising Germinal. US sought access to subsidies
for US producers 34. Uruguay Round 3 am December 14 1993 US still
seeking: EU free to continue reserving 51% of local TV programming
for European production but thus should apply to 24 hour day as a
whole (e.g. France was entirely banning US material from primetime)
For satellite, cable (new techs) - Us willing to allow EU to
reserve 50-70% of all channels but opposed application of EU must
carry 51% Euro content rules to every channel (potential source of
difficulty for Comedy Channel, Nickelodeon, Discovery - indeed Sky)
35. Uruguay Round US artists/producers entitled to fair share of
levies raised from blank audio and video tapes but would commit to
investing the funds raised in Europe. Film and television
industries Pay-per-view and video-on-demand channels should not be
restricted since consumers could make a free choice to watch one
film rather than another and pay for that choice. 36. Uruguay Round
EU offered: Standstill on existing legislation No more than 51% of
programming would be reserved Commitment to begin negotiations on
how the a/v sector should be handled multilaterally SO WHAT
HAPPENS? 37. Final Outcome - an agreement to disagree. Mickey
Kantor: Rather than accepting that EU proposal which would have
enshrined the principle of limiting viewers rights to see what they
wishand recognised a system which denies artists and producers the
right to funds they have legally earned through royalties Kantor
rejected any deal. 38. Final Outcome - an agreement to disagree. We
can best advance the interests of our artists, performers and
producers - and the free flow of information around the world - be
reserving all our legal rights to respond to policies that
discriminate in these areas. Mickey Kantor Dec 15 1993 39. Final
Outcome - an agreement to disagree. A great and fine victory for
French and European cultureWe got what we wanted from the start,
which is basically the cultural exception. Alain Carignon, French
Communications Minister 40. Who won the Uruguay round? Everybody a
winner? Success by contrast might add $270 billion to world income
by 2002 (GATT, OECD & World Bank estimates). Much of the
discussion re: the Uruguay round stressed the dire consequences of
failure. Arguably the only clear winners from the freeing of world
trade under GATT rules may be those 500 or so companies which
control two-thirds of that trade. Barrie Axford, The Global System
41. Who won the Uruguay round? Uruguay round brought economic
imperatives and cultural institutions head-to-head. Under UR - any
rule of institution that might hinder another nations goods or
services from entering freely will be counted as a tariff. Such
tariffs must be reduced. 42. Who won the Uruguay round? However in
some cases these hindrances are not rules but ways of life or means
of supporting cultural diversity: Hence French defence of film
subsidies but also US negotiators considered as restraint of trade
the Japanese practice - hokoosha tengoku - of encouraging small
shops in pedestrian streets since it interfered with thew prospects
of US traders for establishing large out-of-town shopping
facilities in Japan. 43. Who won the Uruguay round? French claim
victory over a/v negotiations Yet despite the absence of any
specific commitments on a/v industry, the sector was still included
within the general framework of the Uruguay Round of trade
negotiations under GATT (specifically the GATS - General Agreement
on Trade in Services). Thus it would be subject to the rules laid
down for international trade generally, particularly in connection
with transparence and settlement of trade conflicts at GATT level.
44. Who won the Uruguay round? Also meant that the a/v industry
would come under the dispute resolution mechanisms of the WTO WTO
designed as successor to GATT - responsible for ensuring growth and
liberalisation of world trade, policing observance of Uruguay Round
rules and settling trade conflicts 45. GATT is dead, Long live WTO
Actually GATT rules still form basis of WTOs operations. WTO:
Secretariat (of 500 people) based in Geneva. Main functions to
supply technical support to WTOs various councils, committees and
ministerial conferences. 46. WTO Structure Ministerial Conference
General Council Goods Council Services Council Intellectual
Property Council 47. WTO operation Ministerial Council meets every
two years. Sets general aims of WTO. Council membership made up of
130 countries, representing 90%+ of world trade 48. WTO and
media/communications WTO treats these industries in the context of
the GATS The GATS formally consists of: 29 articles, 8 annexes, and
130 schedules of commitments (each WTO Member must submit a
schedule) on specific services or service sectors. The articles of
the GATS lay out the scope of the Agreement and the general
obligations and disciplines to be observed. 49. WTO and
media/communications The GATS formally consists of: They also
define the specific commitments to be inscribed in schedules and
how to go about negotiating them. Finally, there are provisions for
dispute settlement and the establishment of the Council for Trade
in Services. 50. WTO and media/communications GATS principles:
Covers all services MFN National treatment only applies where
specific commitments are made 51. Definition of Services Ways of
providing international services defined as: Services supplied from
one country to another (e.g. telecoms) Consumers/firms making use
of service in another country (e.g. tourism) Foreign company
setting up subsidiary in another country Individuals travelling
from home to supply services in another country 52. What has WTO
done for us? A/V services not directly subject to any WTO
negotiations - yet. Telecoms - however: Feb 1997 - Basic Telecoms
Agreement 53. Basic Telecoms Agreement GATT sees US push
(unsuccessfully) for inclusion of provision on liberalising network
access. Issue pursues through GATT. 54. Basic Telecoms Agreement
Origins of the negotiations Marrakesh Ministerial Meeting closed
the Uruguay Round in April 1994. Meeting extends negotiations on
trade in basic telecommunications beyond the Uruguay Round. 55.
Basic Telecoms Agreement Negotiations begin May 1994, (with 33 WTO
Member govts), under the auspices of the Negotiating Group on Basic
Telecommunications (NGBT). Negotiations to conclude by 30 April
1996. Actually takes until 1998 to implement the final agreement
56. Defining basic telecommunications Examples of the services
under negotiation were voice telephony, data transmission, telex,
telegraph, facsimile, private leased circuit services (i.e. the
sale or lease of transmission capacity), fixed and mobile satellite
systems and services, cellular telephony, mobile data services,
paging, and personal communications systems. 57. Basic Telecoms
Agreement Overview The February 1997 deadline for the negotiations
on basic telecoms resulted in the tabling of 55 offers, covering 69
governments (counting individually the EU Member States) 58. Basic
Telecoms Agreement Only the schedules themselves provide
authoritative and complete information on the telecoms services
included, the scope of the commitments, and the degree (i.e. full
or partial) of market access permitted. BUT... 59. Basic Telecoms
Agreement - On voice telephone service, 63 govts committed to
competitive supply (permitting two or more suppliers). These
commitments permit competition the supply of public voice services,
(either immediate or phased-in) on local service, domestic long
distance, and international service and resale of public voice
telephone In total 70% of the 62 governments were permitting a
degree of competition in public voice service. 60. Basic Telecoms
Agreement Commitments on other services: 65 govts - data
transmission services; 62 govts - access to cellular/ mobile
telephone markets 56 govts - competition in leased circuit services
(the supply of transmission capacity) 62 govts - mobile services
(PCS, mobile data or paging). 53 govts - mobile satellite
services/transport capacity 52 govts - fixed satellite
services/transport capacity. 10 govts - value-added telecoms
services (e.g. e- mail, on-line data processing or data base
retrieval).
