What Was GATT About?

By Michael Chanan

The General Agreement of Tariffs and Trade (GATT), founded in 1947 with the aim of liberalising world trade, ended the round of talks which started in Uruguay seven years ago with a last-minute ‘agreement to disagree’ over film and TV. America wanted the European film and TV market to be fully deregulated – in other words, stripped of the subsidies and quotas which, despite Hollywood’s share of cinema audiences (80% in some countries), they believe to discriminate against them. They rejected a compromise which offered them a portion of the receipts from the levy on blank video cassettes which are currently used – in countries like France – to subsidise the film and TV industry. Leon Brittan, Europe’s Trade Commissioner, upheld the French position and the audiovisual sector was left out of the final deal altogether.

Brittan told a press conference that Europe was now free to pursue the policies ‘that would best develop our cultural identities. Our hands are totally untied.’ Not quite, it seems. Firstly, we also learned that the US has reserved its legal rights to respond to policies they consider to discriminate against the industry which is the second largest contributor to America’s balance of payments. Secondly, according to one report, although film and TV were left out of the GATT, the agreement sanctioned only those protectionist measures already in place. It was to comply with this that the Spanish government rushed through a decree strengthening quotas for Spanish films – and threatening the profits of Spanish exhibitors – and a few days later, Spanish cinemas closed for a day of protest.

Ever since it began to make the headlines in September, when French film-makers, fronted by stars like Gérard Depardieu, first protested the issue, the media in Britain has treated the dispute as a clash between France and Washington. A report in the Economist (16 Oct 93) was entitled ‘Cola v. Zola’ – as in Jurassic Park (director, Stephen Spielberg) v. Germinal (director, Claude Berri). There was little sense in the press reports that Britain faced the same problems, indeed that exactly what the French fear is the fate that has overtaken the British film industry: the collapse of film production which followed Thatcher’s withdrawal in the mid-80s of the last vestiges of state support for cinema in Britain, leaving us the only country in Europe without any such assistance.

At least Britain shares in the support provided by the European Union. Europe has run a programme of assistance to the audiovisual industry since 1987, though few people in Britain know much about it. The measures are typically bureaucratic, but offices like the European Script Fund, Eurimages and EFDO (European Film Distribution Office) have promoted a growing number of independent films such as Toto le héro, Riff Raff, and The Double Life of Véronique, while a growing number of TV documentaries are independent co-productions aided by other committees like Documentary and MAP-TV. Some of these measures, too, came under threat as the audiovisual industry was drawn into the arena of the deadlocked GATT negotiations.

The European argument is that the cultural sector is different from regular manufacture and services. As Jacques Delors put it in an interview on CNN a few days before the GATT deadline, culture is a matter of the European tradition, and there is nothing new in subsidising cultural creation: the monarchs and popes of medieval and Renaissance Europe did it. Europe only wanted to defend the rights of each nation to the expression of its own cultural values. It was not an attack on America, which already has the lion’s share of audiences, but the defence of the space which currently existed.

Westminster ought to have been listening. Before the mid-80s, Britain was the world’s second largest exporter of TV programmes after the US (albeit a long way behind). The consequence of Thatcherite policies has been that the overseas earnings of the UK film and TV industry have fallen dramatically from a surplus of £161m in 1985 to a deficit of £45m in 1991. Meanwhile, according to the latest figures, America exports £2.5bn worth of films to Europe each year, while Europe sells less than £170m worth in the USA.

Why has this issue not arisen before? Subsidies and quotas both contravene the free trade principles enshrined in the GATT, but until recently there was no direct conflict. The GATT crisis was the result of a move during the 80s by the US to change the arena for international regulation of what is known as intellectual property. The move corresponds to the growing importance of the culture industry in the global marketplace, now including not only entertainments but also information. It represents an attempt to shift the balance from protection based on authorship towards the interests of corporate bodies, from film and record producers to computer software companies.

From the point of view of the transnational corporations, the established system of intellectual property rights, descended from the Berne Convention of 1886, has become a barrier. (For the details see Vincent Porter’s book Beyond the Berne Convention.) These conventions, they believe, afford inadequate protection to industries at the leading edge of the advanced economies, like film, TV and recording, computer software and electronic data interchange. Their real purpose is not to liberalise trade but to defend their rights as transnational monopolies. A group of Third World countries known as the Group of 14 have argued for measures that would allow countries to protect themselves against abusive or anti-competitive practices such as exclusive deals, price-fixing, preferential sales agreements and restrictive licensing, all of which are regular practice in the domain of culture and information.

Where competition is conducted unfairly, you can hardly speak of a free market. In fact, the free market is a chimera, an illusion which exists nowhere, an abstraction which conveniently ignores the real historical imbalances and distortions of international trade. (Third World film-makers have known this always.) The market is not the neutral mechanism that neo-liberal economists allege, either nationally or internationally. At both levels it tends strongly towards monopolies, cartels and oligopolistic practices. It is not consumer demand which explains why in 1992 North American-produced films accounted for 58% of all titles released in the UK and 90% of the box office: it is rather the hold of the US majors over distribution and exhibition. Indeed, the US majors have been able to engage abroad in commercial practices discouraged in their home market by US anti-trust legislation, such as vertical integration, horizontal co-operation and the merging of their production interests with broadcasting interests. Moreover, there is an asymmetry between the ease with which the US majors can operate in foreign markets and the difficulty which foreign producers have in gaining entry to the US market. The anti-trust laws were never designed to prevent the Americans keeping foreign product off their screens.

The transnationals not only ride roughshod over individual rights, but also national rights to protect the integrity of both culture and information. The attempt to commandeer the GATT followed British and America withdrawal from UNESCO in the mid-80s because the latter defended the idea of a New World Information Order, which challenged the hegemony of the big Anglo-Saxon news agencies with the argument that monopoly control over news services was a major obstacle to freedom of the press. Such ideas are interpreted by neo-liberal governments as undermining the present order of global domination by the West over what is officially called the free flow of information, the effect of which is what others – including the French – call cultural imperialism.

France first clashed with Washington over preferential treatment for French agriculture. The Americans could not understand that for France this is as much a question of culture as economics – the French viewed the weakening of their agriculture as a threat against gastronomy. The media told us that the question of farm subsidies threatened to split the EC and leave France isolated – some of them even relished the prospect of Europe breaking down. When the film and TV issue came up, and they treated it the same way, we got more misinformation.

It was not French chauvinism which endangered the GATT, but something much more fundamental. It is ironic that it took a right-wing French Prime Minister to explain, but as Edouard Balladur told the foreign press, France was under attack for linking the issue of international trade with the question of what kind of Europe we wanted: a big market which will progressively melt into a vast free-trade zone dominated by American software and Japanese hardware, or a community with a strong identity of its own and a major international presence?

In this context, the deadlock between Europe and America over film rights and rentals has highlighted the manner in which economic dominance inevitably brings cultural hegemony, and the defence of cultural identity becomes the same thing as the defence of the rights of national self-determination. It is not an accident that in a system which sees cultural creation as nothing more than a form of commodity production, the problems of world trade should redound on film and TV. It’s a sorry day that sees film-makers like Spielberg and Scorsese supporting Hollywood instead of their European colleagues. It’s a nasty sight when Jack Valenti, fulminating in Geneva on behalf of the Motion Picture Association of America, declares ‘I am outraged’. It is sheer hypocrisy when Mickey Kantor, Clinton’s negotiator, warns us that America regards the issue as one of free speech, and what he calls the control of the film industry is incompatible with ‘genuine democracy’. But what if Valenti’s promise of revenge and Kantor’s hypocrisy are merely the symptoms of what the GATT has really been about?


Whose Free Market?


In the last weeks before the GATT deadline, the press began to offer different readings of the whole issue. On the same day in November, the Guardian (9 Nov 93) carried one column, by a staff writer, headlined ‘Should GATT wall fall then everyone would be damaged’, and another, by John Gray, an Oxford academic, on the op-ed page, ‘When no deal is a good deal’, which criticised US ‘inability to understand the role of cultural difference in political life’. GATT, says Gray, ‘is designed to create a global free market in all goods and services, including agricultural products. Such a global free market can only enhance the destructive radicalism of market institutions, which is the principal danger of the post-socialist age. The globalisation has already undermined local and regional ways of life in many parts of the world. For the Third World, global free trade means the destruction of agrarian communities and peasant traditions, as local farming practices are undercut by mechanised Western agribusiness... For the developed world, global free trade means a massive increase in structural unemployment as workers try vainly to compete with the low-wage economies of the newly industrialising countries. In both Third and First worlds the GATT proposals are a recipe for social upheaval and political instability on a vast scale.’


“Whether one calls it propaganda or information, it is evident that, as a result of World War II, the motion picture from this day must be regarded as an instrument of public policy as well as a great popular medium or entertainment... If the dominant note is to be democratic, as it is to be hoped, those industries which are indebted for their growth and progress to the freedom of opportunity in the great democracies, must work together within a framework of friendly and fair co-operation.

“The industries of the democratic countries in the post-war period have every reason to stand shoulder to shoulder against the imposition of quota, the creation of cartels and the raising of any and all barriers to the free flow of motion picture commerce.” – Jack Alicoate, Film Daily, 1945


Michael Chanan, a filmmaker and writer who teaches film in London, has forthcoming books on music and the record industry.