Journal of Cultural Economics 28: 243–256, 2004.

C 2004 Kluwer Academic Publishers. Printed in the Netherlands.

Convention on Cultural Diversity

KEITH ACHESON and CHRISTOPHER MAULE

Department of Economics, Carleton University, Ottawa, Canada K1S 5B6

Abstract. UNESCO has given its Director General a mandate to draft a convention on protecting the
diversity of cultural contents and artistic expressions by the fall of 2005. Proponents of the convention
view commitments made by countries in trade agreements as weakening their ability to preserve and
promote cultural diversity. We review the existing draft wording for a convention, developed before
the official involvement of UNESCO, by the INCP, an association representing cultural ministries
in favour of insulating their cultural policies from liberalization, and conclude that it fails to meet
the necessary conditions for an enforceable rules-based international agreement. In the INCP text,
countries are given rights to introduce policies that promote a self-defined cultural diversity. The
only obligation is to balance their interests with those of others. No standard of adjudication for
balance is offered nor any effective dispute resolution mechanism developed. The ultimate purpose
of the initiative may be to form a negotiating bloc within the WTO, but the disparate interests of its
members and the lack of tangible benefits from the Convention reduce the credibility of bargaining
solidarity. In contrast, the WTO provides a flexible and effective forum for negotiating maintenance
of current policy options at a cost of making concessions in other sectors.

Key words: cultural activities, cultural diversity, cultural industries, INCP, trade

1. Introduction
By consensus, the 32nd UNESCO General Conference in October 2003 gave the Di-
rector General a mandate to draft a convention on protecting the diversity of cultural
contents and artistic expressions for presentation to the 33rd General Conference in
the fall of 2005.1 In contrast to a large number of non-binding UNESCO declaratory
instruments addressing culture, the proposed convention is to be a standards-setting
instrument, i.e., a legally enforceable set of rules rather than an awareness-raising
document.2
For the countries sponsoring the UNESCO initiative, the October 2003 resolu-
tion was not a beginning but a stage in a process responding to the creation of the
WTO in 1994. In the first stage of their strategy to minimize the WTO’s impact
on their policy options, the cultural ministries of these countries created two asso-
ciations with international representation—the International Network of Cultural
Policy (INCP) and the International Network for Cultural Diversity (INCD)—
neither of which is directly related to UNESCO. Conferences of cultural profes-
sionals from French-speaking countries were also organized to discuss and promote
a New International Instrument on Cultural Diversity, hereafter NICD, and at least
in Canada’s case, the advisory trade committee representing the cultural industries
participated in the NICD process.
244 KEITH ACHESON AND CHRISTOPHER MAULE

The debates, analyses, and draft texts produced by these organizations are our
data set—words rather than numbers. Our hypothesis is that a rules-based enforce-
able instrument on cultural diversity is not possible. We “test” it by examining the
most recently published draft (as of February 2004) of a cultural diversity instru-
ment. We find no enforceable rules.
This conclusion raises the question of why considerable resources and time have
been and are continuing to be spent on this initiative. One possibility explored is that
the purpose was not to create an NICD but rather to influence the ongoing GATS
negotiations in the WTO. We also examine the extent to which the WTO provides
an integrated and flexible governance framework for the cultural industries. The
structure of GATS and the nature of negotiations on services allow a country not to
commit cultural services to national treatment or market access.
International agreements among sovereign powers, like contracts among indi-
viduals and organizations, are voluntarily entered agreements where each partici-
pant anticipates a gain. They differ from contracts in being self-enforcing. In this
dimension, they are similar to illegal coordinating agreements like business cartels
or turf-allotments among criminal gangs that have been explored in game theory. In
another dimension, that of setting up elaborate internal mechanisms of adjudication
and sanctions, international agreements differ from illegal pacts. A cartel, for ex-
ample, is unlikely to keep elaborate records and establish fact-finding and assessing
tribunals to deal with “cheating” because these processes raise the chances of being
successfully prosecuted.
Enforcement of an international agreement ultimately depends on the ability
to exclude members from the gains that it generates because of the absence of
effective third-party adjudication. A member that is assessed a penalty will accept
an assessed sanction rather than invite expulsion if the discounted value of future
benefits is sufficiently high. The creative challenge in a rules-based international
agreement is to craft rules that generate significant gains for each member and to
establish a fair dispute settlement mechanism (DSM) and related “punishments”
that deter non-compliance.

2. Concerns of the Proponents of the NICD

NICD proponents are concerned that WTO obligations may undermine their gov-
ernment’s ability to pursue a wide set of policies—granting preferences to domestic
suppliers, establishing foreign ownership restrictions, paying preferential subsi-
dies, administering broadcast quotas, entering into bilateral co-production treaties,
and supporting national broadcasting undertakings—affecting cultural industries
and activities. Although the policies in question flourished under the GATT, the
expanded and more integrative WTO is perceived to threaten their continuation.
Proponents’ reasons for maintaining a protective capability vary.
Language is among the non-opportunistic rationales. Small countries with
unique languages and minority language groups within countries, such as French
CONVENTION ON CULTURAL DIVERSITY 245

Canadians in Canada and Catalans in Spain, are concerned with linguistic survival
within their communities. Some core countries of large linguistic communities are
concerned with the impact of the success of English-language media on their aspi-
rations to become languages of international discourse. Another non-opportunistic
objective is to redress “diversity gaps”. Typical examples cut across the content
spectrum from popular culture (too few Bollywood films), through high arts (too
little Islamic art), to general cultural knowledge (ignorance of Berber culture).3
A coalescing force among the more committed supporters of an NICD has been
hostility to the success in export markets of large American based companies, es-
pecially in the film and television industries. Terms such as “American cultural
imperialism” are used to describe a far more complex phenomenon.4 Although
advocates of making more cultural options available emphasise that their “shelf
space” appeal does not mean blocking American, or more broadly Western, cul-
tural content, this claim seems dubious. National film producers, for example, are
unlikely to share their film or conventional television quotas with Bollywood films,
and existing film and conventional television content quotas discriminate against
foreign content regardless of its origin.
Within the government, the interest in an NICD of ministries of culture and
their constituents often conflicts with the mandate of economic ministries of trade,
investment and finance to vet government spending and encourage trade and invest-
ment. A more ambivalent opposition to the NICD also occurs within the cultural
constituency. Producers and distributors of cultural goods and services that export
or have subsidiaries operating in other countries welcome domestic subsidies and
preferences but are hurt by foreign quotas and restrictions on ownership. If the
former threaten to generate the latter, their lobbyists engage in deliberately unin-
telligible speech.
The variety of motivations to maintain protective policy instruments are irrel-
evant to the feasibility of exerting formal international discipline on how they are
used. Have supporters, whatever their motivations, defined enforceable obligations
on national cultural policy that generate sufficient gains from membership to sup-
port a DSM capable of enforcing compliance? The expected outcome of strategic
interactions among members depends on the answer to this question. This issue is
the focus of our paper.
Two organizations and related initiatives have developed and promoted the NICD
by sponsoring different drafts, supporting papers, meetings, and conferences.

2.1. THE INCP

Created shortly after the WTO came into being, the INCP is a forum for the cultural
ministers of member countries to discuss issues of mutual interest. The INCP has
held six annual meetings since 1998, the most recent in Opatija, Croatia in 2003.5
Its membership has grown from fewer than 20 countries in 1998 to 59 in early 2004.
Of these, 25 are from either the Commonwealth or the Francophonie.6
246 KEITH ACHESON AND CHRISTOPHER MAULE

A small core of active members shapes the INCP’s agenda while other mem-
bers sporadically participate. A contact group—Canada, Croatia, France, Greece,
Mexico, Senegal, South Africa, Sweden, and Switzerland (in alphabetic order)—
sets policy direction and provides the administrative resources necessary to maintain
continuity and build momentum. Some key members have diversified their bets.
Switzerland and Brazil, for example, have responded to a WTO call for suggestions
on how to broaden commitments in audiovisual services under GATS.7 The French
and Canadian governments, two of the most consistent supporters of the INCP, will
not make any commitments to restrain their cultural policy alternatives until an
NICD is in place.8

2.2. THE INCD

Just before hosting the INCP’s inaugural meeting in 1998, the cultural ministry of the
host government, Canadian Heritage, organized an international non-government
organization (NGO) to complement the efforts of the INCP. The INCD acts as an
umbrella group for individual artists, cultural activists, and cultural NGOs from
different countries.9
Both organizations have worked side-by-side to provide similar but different
drafts of an NICD and to promote the concept. Whereas the INCP represents a
politically disciplined perspective on cultural diversity, the INCD looks at the same
issue with a broad and more unpredictable “civic” and “participatory” view. The
official side has kept a tight rein on the “grass-root” input through funding its
liaison office and various research initiatives, holding the INCD meetings concur-
rently with its own, and providing consultants or staff that develop themes, suggest
speakers, write background papers and summary reports and proselytize. The in-
tention is to release controlled “soft power” to further the political agenda of the
INCP.

2.3. RELATED INITIATIVES

More than 300 participants representing professional cultural organizations have

met on two occasions (Montreal: September 2001 and Paris: February 2003) to
examine the impact on cultural policies of WTO negotiations and to develop
an international legal instrument to promote cultural diversity.10 As an exam-
ple of a supportive initiative at the national level, an advisory committee to the
Canadian Minister of International Trade (the Cultural SAGIT), which is respon-
sible for trade issues affecting the cultural industries, has issued two drafts of an
NICD.11
The development and promotion of a sequence of INCD, SAGIT and INCP
drafts of a constitution for an NICD are not independent but have been orchestrated
through a combination of government funding, the holding of meetings at the same
time and place, and the involvement of cultural ministry officers and outside advisors
CONVENTION ON CULTURAL DIVERSITY 247

with the ongoing affairs and meetings of the different groups (Grant and Woods,
2004, pp. 380–390).

3. The INCP Draft Convention

Among the available draft NICDs, the latest document prepared by the INCP12
represents the closest thing to an official position, as espoused by its Ministers of
Culture, which is now in the hands of UNESCO. This document illustrates the
extreme difficulty, perhaps impossibility, of drafting a rules-based convention on
a concept as difficult to define as cultural diversity. It is a parsimonious document
with many of the 20 articles consisting of one to five lines, accompanied by more
fulsome explanatory notes. We focus on the articles dealing with the rights and
obligations of the parties to the Convention, the proposed DSM, and the overlap of
a new Convention with the WTO.
In Article 6.1, members are obliged to preserve and promote cultural diversity,
a term that receives the following definition in Article 1.1:

Cultural diversity refers to the plurality and interaction of cultural expressions that coexist in the world
and thus enrich the common heritage of humanity.

By this definition cultural diversity occurs whatever is the state of the world.
Unlike a clear obligation, such as banning land mines, where an impartial adjudi-
cator can reach agreement on whether or not parties have complied, determining
whether cultural diversity is achieved is subject to any number of interpretations.
The pervasive failure to define what is not permitted is often explicitly recognized
in the draft. For example, the notes to Article 6 explain that it creates “. . . the right
of States to maintain or adopt measures that they consider appropriate”. The aim
is to permit members to introduce and implement whatever cultural policies they
choose and to justify them in the name of cultural diversity. If these only affected
conditions within each country, there would be no objection, but this is not the
case. National content quotas for television broadcasters and restrictions on entry
of qualified foreign professionals and technicians, for example, affect the interests
of other countries. None of the countries supporting the NICD would allow all
edicts by cultures within their boundaries to establish national law.13
In subsequent articles, the INCP draft sets out general obligations (Articles 9–
12), noted as being soft obligations, and obligations that parties have to each other
(Article 13). Articles 9–12 are declaratory statements. They include: to preserve
and promote cultural diversity, take into account conditions in developing countries,
be open to content from other members, and promote the Convention in other
international fora.
Regarding more specific obligations, the notes to Article 13 claim that it pro-
vides “. . . the rules-based approach within this Convention and gives this text the
legal structure of a convention.” Only breaches of its obligations are “. . . subject
248 KEITH ACHESON AND CHRISTOPHER MAULE

to dispute settlement.” Article 13.2 offers four criteria as to whether a mem-

ber country’s policy “is consistent with the principles and objectives of this
Convention”:

(a) Does the measure fall within the scope of the Convention?
(b) Does the measure reflect the objectives of this Convention (e.g., specificity of
cultural goods and services)?
(c) Does the measure respect the principle of balance, when the actual market
situation and competitive conditions are taken into account?
(d) Has the measure been implemented in a reasonable and transparent
manner?

The scope of the Convention and the measures that reflect its objectives ((a) and
(b) criteria) are self-defined by the parties to be consistent with cultural diversity
leaving nothing to enforce. The meaning of ‘specificity’ of cultural goods and
services (noted in parentheses in criterion (b)) is anything but specific. It is defined
in a circle of references taking the reader from the notes of Article 13 to those of
Article 5, which explain that cultural goods become specific by adding “the role of
cultural content in maintaining and recreating the cultural identity of peoples and
communities”, and finally to the following definition of cultural goods and services:
“Cultural goods and services are those goods and services that convey cultural
content. They acquire their specificity because they convey values, meaning and
identity, and therefore are not mere commodities.” Sometimes circling takes one
further away from the prey.
Balance (criterion (c)) is explained in Article 7.1:
Any measure taken by a Party to preserve or promote domestic cultural expression must respect
balance between the promotion of domestic cultural expression and openness to cultural content of
other parties.

A tradeoff is recognized but there is no guidance as to how an adjudicator should

determine whether or not balance had been achieved. The final criterion, (d), refers
to the need for transparency, mentioned also in Article 8. This is a reaffirmation of
what already exists in the WTO. In sum, there is nothing in Articles 13 and 7.1, the
heart of the Convention as far as the parties’ obligations are concerned, that requires
a member to alter its cultural policies. Either the criteria are not enforceable or the
behavior is already required by the WTO.14
A DSM is proposed in Article 18. In a dispute, the parties are required to follow
a three-stage process: first consult with each other, then use the “good offices of
a third party,” and lastly set up of a panel of cultural experts. Details of the panel
process are not presented. If all parties can do what they want, there are no gains
from mutually binding constraints, which are necessary to support a DSM, and,
in the absence of defined rules or a clear consensus of what constitutes cultural
diversity, nothing to enforce.
CONVENTION ON CULTURAL DIVERSITY 249

The relationship of the Convention with the WTO and other international agree-
ments is addressed in Articles 4 and 12. Article 4.1 states:
Nothing in this Convention shall derogate from existing rights and obligations that parties may have
to each other under any other international Treaty.

The notes to Article 4 add:

. . . this Convention cannot take precedence over any existing treaty or enable its Parties to derogate
from their obligations to each other under existing treaties. But following the same logic of inter-
national law, the Parties may not, as a general rule, derogate from their obligations to each other as
agreed in this Convention and in any future treaty or when developing or expanding any existing
treaty.

Any signatory of the Convention that is also a signatory of the WTO will sustain
its WTO commitments but make no further commitments in areas such as audio-
visual services in the GATS, or in any new regional or bilateral agreement unless
these commitments are deemed compatible with cultural diversity.15 Cultural goods
such as books, magazines and newspapers, or records, discs and tapes will remain
subject to current GATT commitments, and where a protectionist service measure
is introduced that is tied to a good, the policy may be disallowed under the WTO
DSM.16
The proposed convention would not give its members any degrees of freedom
that they do not currently have. For example, if Switzerland and Germany were
members of the NICD, they could not develop any preferential bilateral cultural
programs and policies with respect to each other that are not currently allowed
under existing treaties exempted from MFN in the WTO. If they did, they would
be in breach of their WTO MFN obligations. Either the treaty would have to be
scrapped or its benefits granted to all WTO members including the United States.
If a signatory to the Convention were to withdraw from the WTO, then its actions
would be subject only to the Convention for trade in cultural goods and services.
Any dispute with a country not subject to the Convention would be settled in
unstructured political interactions.

4. Cultural Sector and the WTO

The aspects of the WTO that have affected the cultural industries are:

• the incorporation of GATT into a broader based organization;

• the agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS);
• the General Agreement on Trade in Services (GATS), a structure for recording
the obligations of members to market access and national treatment in services;
and
• an effective DSM.
250 KEITH ACHESON AND CHRISTOPHER MAULE

The new GATS imposed a rules-based regime on trade in services incorporating

the most-favoured-nation (MFN) principle. Founding members were allowed to
exempt existing non-MFN treaties, but this exemption was limited.17 Many of the
countries that took part in the Uruguay Round exempted their audiovisual co-
production and other cultural cooperation treaties from MFN. Member countries
are not obliged to grant other members national treatment or any level of market
access. Once a commitment is made in a negotiation round, it is enforceable through
the WTO DSM.
The following set of assumptions would have supported a “business as usual”
prediction for the WTO’s net effect on exchange of cultural trade and services in
1994. Many of the changes in copyright obligations would probably have occurred
within WIPO had TRIPS not been negotiated because there was wide support
among the developed countries. GATT commitments with respect to cultural goods
did not change significantly. The framework of the new GATS allowed countries
not to make market access or national treatment commitments18 and existing co-
production treaties could be immunized, at least temporarily, from MFN treatment.
Since most cultural activities involve a combination of goods and services, countries
could choose to emphasise either GATT or GATS in defending their policies against
a complaint.
The “business as usual” prognosis has not been realized. The DSM of the WTO
has provided a more effective multilateral forum for enforcing copyright than ex-
isted in stand-alone copyright treaties and for enforcing obligations in GATT. As
a result of the latter impact, the GATT became for the first time a significant fac-
tor influencing trade in cultural goods and, indirectly, ancillary cultural services.
Although there have been only a few years of experience, interpretations of panels
and appellate courts on the joint impact of GATS and GATT (particularly Article
III (2), National Treatment on Internal Taxation and Regulation) indicate that the
sum of the parts is, if anything, more not less supportive of liberalization than the
individual components.
No disciplinary actions were taken under GATT with respect to cultural industry
policies in the over four decades before the WTO absorbed it.19 Under the WTO,
the United States lodged a complaint against Canada’s protection of its magazine
market from foreign split runs (copies of foreign magazines sold in Canada car-
rying largely unchanged editorial content while adding advertisements targeting
Canadian readers). All three aspects of Canada’s policies that were challenged—a
prohibitive tariff, a discriminatory excise tax, and a postal subsidy for domestic
magazines—were ruled inconsistent with Canada’s commitments.20 The United
States also brought an action against a 25% box-office tax levied on the exhibition
of foreign but not domestic films by Turkey as violating Article III of GATT.21
Before a panel could be struck, the two countries reached a negotiated solution
whereby Turkey made its tax non-discriminatory.
The WIPO Copyright Treaty (1996), which incorporates some elements of
TRIPS and further adapts protection to new technologies, came into force in late
CONVENTION ON CULTURAL DIVERSITY 251

1996.22 It is an offshoot of the Berne Convention. No cases for non-compliance

with the Berne Convention have ever been referred to the International Court of
Justice under its Article 33. In contrast, there have been three copyright disputes
that generated panel decisions under TRIPS since 1995.23
Typically in trade negotiations, the international trade policy wish lists of minis-
ters from departments with responsibilities delineated by occupations—agriculture,
cultural activities, and fisheries—are reined in and coordinated by the foreign min-
istry, which has responsibility for the overall negotiations. This “reining in” has not
happened to the cultural ministries pursuing the NICD in key countries.
One explanation is that the NICD initiative is designed to improve the bargain-
ing position of its members in WTO negotiations. Suppose that Article 6 of the
INCP draft, which reaffirms members’ sovereign right to take measures to preserve
and promote cultural diversity within their jurisdictions and globally were made
more precise. For example, members could be denied the right to make cultural
trade commitments restricting their “financial and fiscal, legal and regulatory, and
support measures” (see notes to Article 6) without the approval of a specified per-
centage of the NICD members. Article 6 would then become an enforceable rule.
An NICD with an effective DSM that was structured in this way would enhance
the bargaining power of countries opposed to cultural trade liberalization. Such an
arrangement would still provide a less effective mechanism for preventing liber-
alizing commitments than exists within the EU, where under the Treaty of Nice,
unanimity among Council members is required to conclude trade negotiations for
sensitive sectors, a category that includes audiovisual services.24
Success of such a strategy requires that there are sufficient countries whose
policy makers oppose mutual liberalization of cultural sectors and that the NICD
develop an effective DSM. The heterogeneity of interest of countries other than the
United States in cultural trade policy is considerable.25 Small, developed countries
are as creatively and organizationally sophisticated as large developed countries
but with access only to their own market, they face a disadvantage in recapturing
the high fixed costs of creating attractive content. This loss is avoidable through
trade liberalization for small countries that are part of large language markets. Some
small countries such as the Netherlands and Hong Kong (currently an autonomous
area within China) have thrived through openness. Other larger countries within the
INCP, such as Mexico and Brazil, are significant players in their language markets.
Even if a number of countries prefer protection, the threat to negotiate as a bloc is
not credible without an effective DSM.
The recognition in the INCP draft that its rights and obligations will not take
precedence over WTO commitments (Grant and Woods, 2004, pp. 403–405) sug-
gests that a related objective of its proponents is to develop a convention whose
wording and intent will be taken into account by panels in resolving cultural trade
disputes between WTO members and those who are also signatories to an NICD. We
argue to the contrary. Panels of the WTO cannot take into account fuzzy concepts of
cultural diversity without losing their legitimacy and ultimately their effectiveness.
252 KEITH ACHESON AND CHRISTOPHER MAULE

A declaratory NICD may, of course, influence members of the WTO not to initiate
dispute resolution proceedings concerning cultural activities because of their sym-
pathy with its position. At the least, according to the rhetoric of supporters, one
would expect no formal cultural trade disputes among NICD members in the WTO.
In addition, the philosophy of the proposed NICD clashes with that of the WTO as
noted by a special policy research team report to the INCP:

While it may be generally agreed that in order for the instrument to be effective, it must have an effect
on the WTO, on its internal law, few people could see the WTO promoting an instrument which, in
several respects, might contravene the basic principles the WTO defends.26

The WTO is also much more flexible than the proponents of the NICD maintain.
The notes to Article 5 of the INCP draft concerning specificity of cultural goods
and services,27 maintain that “. . . trade policy rules and principles neither take, nor
intend to take, into account specificities of any sector or service.” This statement
is at odds with the special treatment in the WTO given to agriculture and textiles,
sectoral agreements for telecommunications and financial services, instances where
safeguards are needed, and references to the special needs of developing countries
that predate the attention given to development in the Doha Round of negotiations.28
The GATS allows members not to increase their liberalising commitments in
areas that they consider sensitive, such as audiovisual services that have a strong
cultural dimension. They may also be persuaded that liberalization would reduce
their welfare rather than enhance it.29 Negotiation requires that a country weigh
the relative merits of sectoral protection, be it in culture or agriculture, in deter-
mining an offer. Members wishing to protect cultural services will have to provide
compensating concessions in other sectors in a negotiating round.30 Currently, the
expected costs of insulating a sector from liberalization within the WTO are higher
because powerful affected countries may retaliate unilaterally. The NICD would
be unable to insulate its members from unilateral retaliation from non-members,
such as the United States. A waiver for policies in specified cultural industries31
could be negotiated under Article IX, 3–4 of the WTO Agreement, but a waiver
requires support of three-quarters of the WTO membership (Carmody, 1999). Any
country that considers that a benefit from its WTO membership is impaired by the
granting of a waiver can take its case to the WTO DSM. How the WTO might be
reformed to curb unilateral retaliations (often designed to affect areas not under its
restraint) against measures that are consistent with its provisions is a challenging
problem.

5. Conclusion
In its 2003 draft of an NICD, the INCP claims to establish rights and obligations of
member countries that can be adjudicated by an impartial DSM. Our reading of this
proposal is that the rights of members are self-defined providing they correspond
CONVENTION ON CULTURAL DIVERSITY 253

to an imprecisely worded notion of cultural diversity. Members have only soft

obligations or specific ones that are subject to a rule of “balance”. The discussion
of “balance” does not provide any effective guidance for adjudication. The proposal
constitutes a declaratory statement and not a legally enforceable set of rules. Since
the WTO has a wide membership and an effective DSM that has adjudicated a
range of disputes, dealing with cultural trade issues within it offers a workable
alternative.
A second possible purpose of the NICD is to create a negotiating bloc of countries
that will be bound not to make any further commitments in the WTO liberalizing
trade in cultural goods and services unless such concessions meet with the collective
approval of the NICD members. If the NICD generates sufficient gains for its
members to support an effective DSM, their bargaining power within the WTO
negotiations would be enhanced by this strategy. We doubt that the premise in the
conditional clause is valid.
That the fate of the NICD is now in the hands of UNESCO is not surprising from
some perspectives. UNESCO has responsibility for culture in a broad sense and
houses many accords related to some aspect of that broad concept. More specif-
ically, UNESCO has interacted formally and informally with the INCP and the
INCD since their inception. The background paper informing UNESCO members
about the initiative to sponsor an NICD refers sympathetically and appreciatively to
groundwork done by the INCP, the INCD and the Conferences of Cultural Profes-
sional Associations, inter alia, and to its own early efforts.32 One jarring exception
to this unity of purpose is the INCP Special Policy Research Team recommendation
that the NICD be a stand-alone agreement rather than being housed in UNESCO (It
was concerned that a UNESCO convention must be ratified by a two-thirds majority
of those in attendance and it would have no effective DSM.)33
What UNESCO will propose is currently unknown. What we have provided is
a description of the “time series” in the development to date. Based on our reading
of that “series”, our forecast is that UNESCO will propose a declarative proposal,
acknowledged or not, or a rules-based agreement designed to strengthen the bar-
gaining hand of those countries wishing not to liberalize their cultural activities in
the WTO negotiations.
That conclusion is testable. The UNESCO timeline calls for the final text of
an instrument to be referred to its fall Conference in 2005. If time reveals us to
be inept readers of economic tea leafs, we will bear the reputational cost. If we
are right, significant resources have been wasted that might have been better spent
on, say, artistic expression and innovation in the cultural industries or on those oft
mentioned LDCs.

Notes
1. A copy of the final resolution is at Debate 5, p. 26 of http://unesdoc.unesco.org/images/0013/
001321/132141e.pdf (accessed July 11, 2004).
254 KEITH ACHESON AND CHRISTOPHER MAULE

2. See Desirability of Drawing Up an International Standard-Setting Instrument on Cultural Di-

versity at http://unesdoc.unesco.org/images/0013/001307/130798e.pdf (accessed February 28,
2004).
3. Recent technological developments have affected both concerns. DVDs, videos, art house cine-
mas, the Internet, and an array of ethnic channels available on cable and satellite systems have
expanded exponentially the diversity of cultural content available to immigrant communities, the
culturally curious, and those wishing to communicate in threatened languages or non-English
international languages.
4. Large Hollywood firms are or have been recently owned by Australian, Canadian, French and
Japanese investors; considerable foreign ownership extends to large publishing houses in the U.S.;
German, British, Japanese and French firms dominate the world music industry; and pop music
artists come from a wide range of countries and from minority cultures within the United States.
5. The agenda, participant list, and other information about all of the annual meetings can be accessed
from http://206.191.7.19/meetings/index− e.shtml (accessed February 28, 2004).
6. For information on the Francophonie, see http://agence.francophonie.org/agence/etats.cfm; on
the Commonwealth, see http://www.thecommonwealth.org/Templates/Internal.asp?NodeID =
20724; and on the INCP, see http://206.191.7.19/members/index− e.shtml. (All three sites ac-
cessed February 28, 2004.)
7. These communications do not bind a country nor constitute requests or offers under GATS.
See Communication from Brazil: Audiovisual Services WTO S/CSS/W/99, July 9, 2001 and
Communication from Switzerland: Audiovisual Services WTO S/CSS/W/74, May 4, 2001.
8. For Canada’s position, see speech of Heritage Minister available at http://www.cdc-
ccd.org/Anglais/Liensenanglais/frameevents.htm (accessed February 28, 2004). For France’s po-
sition, see http://www.diplomatie.gouv.fr/actu/article.gb.asp?ART = 32971 at para 2 (accessed
February 28, 2004).
9. Details of the INCD are at http://www.incd.net/incden.html (accessed February 28, 2004).
10. See no. 2, Appendix 1, p. 2, para 9.
11. The 1999 Report is available at http://www.dfait-maeci.gc.ca/tna-nac/canculture-en.asp (accessed
February 28, 2004). The 2002 Report is at http://www.dfait-maeci.gc.ca/tna-nac/sagit− paper-
en.asp (accessed February 28, 2004). Maule was a member of the SAGIT for both reports; he
signed the 1999 but not the 2002 Report in which it is not indicated that there is a dissenting
view. The second report proposed that the convention should be outside the WTO; the first was
undecided on this issue.
12. http://206.191.7.19/iicd/draft− e.pdf (accessed February 11, 2004). The INCD also developed
drafts (for most current see http://www.incd.net/resources/papers.html (accessed February 16,
2004)).
13. In 2004, for example, the French National Assembly passed legislation effectively forbidding its
Sikh or Muslim population to self-define school dress codes and curricula.
14. The WTO also has fuzzy concepts and self-defined exceptions affecting trade in cultural goods
and services (see for example, Article XX of GATT), but it also has enforceable rules.
15. This is the stated position of France and Canada. See no. 8.
16. Such as in the periodical case. See WTO, Canada-Certain Measures concerning Periodicals:
Report of the Panel. WT/D531/R. 1997, Geneva; and WTO, Canada-Certain Measures concerning
Periodicals; Report of the Appellate Body. WT/D531/AB/R. 1997, Geneva.
17. See GATS Annex on Article II Exemptions. Outstanding exemptions were to be revisited in 5 yr,
not to exceed 10 yr, and to be subject to negotiation in subsequent trade liberalizing rounds.
18. The EU was divided. Influential countries wanted a special cultural trade agreement within GATS
or to except culture. The U.S. opposed both options. Negotiations on audiovisual services were
delayed 5 yr (Cahn and Schimmel, 1997, p. 297) and have since been integrated into the Doha
round.
CONVENTION ON CULTURAL DIVERSITY 255

19. For one pre-WTO (non-cultural) case involving Article III of GATT, see Shao (1995, p. 116).
20. See no. 16 and Acheson and Maule (1999, pp. 184–204).
21. WTO WT/DS43/2, January 10, 1997.
22. Text available at http://www.wipo.org/clea/docs/en/wo/wo033en.htm (accessed February 24,
2004).
23. Listed at http://www.wto.org/english/tratop− e/dispu− e/dispu− subjects− index− e.htm#bkmk31
(accessed February 24, 2004).
24. Article 133, paragraph 6 at http://europa.eu.int/eur-lex/en/treaties/dat/nice− treaty− en.pdf (ac-
cessed July 7, 2004). Also note draft Constitutional Treaty for Europe of the EU Article III-217(7),
June 2004, pp.47–8.
25. The arguments for an open policy are contrasted to those for a nationalist policy in Acheson and
Maule (1999, pp. 14–22). The issues addressed in this paper do not depend on one’s position in
that debate.
26. The team (unnamed) was Swiss led. It included experts from Canada, Columbia, France
and Sweden. See “Options and Issues for the Implementation of an Instrument: Depositary,
Mechanism, and Strategy” July 2002, p. 19, at http://206.191.7.19/meetings/2002/options− e.pdf
(accessed February 21, 2004).
27. Article 5 states “When devising national or international policies or measures, the Parties shall
take into account the specificity of cultural goods and services.”
28. Trebilcock and Howse (2001) discuss the WTO’s attention to the special circumstances of LDCs.
29. With imperfect competition, externalities, and second-best situations such as tax distortions
in other sectors, models can be constructed in which trade restrictions are welfare enhancing.
Francois and van Ypersele (2002) provide a cultural trade example involving two countries,
named the U.S. and France, in which a French tariff on film imports can be optimal. Critical as-
sumptions are: Hollywood can produce exportable films but the French industry cannot; nationals
of one country can neither invest nor participate as professionals in the other’s film industry; and
there is no price discrimination.
30. For example, in the Australia–United States Free Trade Agreement signed February 8, 2004,
the United States maintained protection in agriculture and Australia maintained protection in the
audiovisual sector. The Australian cultural sector had anticipated that it might be sacrificed in
favour of Australian farmers gaining better access to the U.S. market (see comments of Dick
Letts, Executive Director, Music Council of Australia in the INCD Newsletter—December 2003,
Vol. 4, No. 12 (Section 4) available at http://www.incd.net/docs/Newsletter36E.htm (accessed
February 28, 2004)).
31. A waiver requires that the sector be identified. Cultural goods and services is not a WTO service
aggregation and one would have to be constructed from existing categories.
32. See document referred to in no. 2.
33. See reference in no. 26.

References
Acheson, K. and Maule, C. (1999) Much Ado About Culture: North American Trade Disputes. Uni-
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Cahn, S. and Schimmel, D. (1997) “The Cultural Exception: Does it Exist in GATT and GATS
Frameworks? How does it Affect or is it Affected by the Agreement on TRIPS?” Cardozo Arts
& Entertainment Law Journal 15: 281–314.
Carmody, C. (1999) “When “Cultural Identity was not an Issue” Thinking about Canada-Certain
Measures Concerning Periodicals,” Law & Policy in International Business 30: 231–320.
256 KEITH ACHESON AND CHRISTOPHER MAULE

Francois, P. and van Ypersele, T. (2002) “On the Protection of Cultural Goods,” Journal of Interna-
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