There is an element of Nimbyism over free trade, as countries seek to protect cherished and often delicate local industries while expecting other markets to remove import barriers at their end. This is very evident in Europe’s machinations over its TV and film industries, which have long been deemed vulnerable to the much more efficient and powerful US audio-visual industry spearheaded by Hollywood. For at least two decades the European Union has largely successfully excluded the audio-visual sector from trade talks but is now under pressure to give ground under the latest round of bilateral negotiations.
The EBU (European Broadcasting Union) has been quick to weigh in with its rather indefensible argument that TV and film services should be excluded from the talks because opening the markets up to unfettered US competition would damage the sector. The EBU noted a trade imbalance, with the EU importing €7.5 billion worth, while exporting just €1.8 billion to the US in 2010, the last year for which data is available. It also suggested that opening the audio-visual sector to free trade with the US would mean US media companies would be entitled to EU support schemes, but be exempt from regulatory obligations. These two arguments are red herrings because the last could be fixed within the context of GATT (General Agreement on Tariffs and Trade), while the trade imbalance is dwarfed by some other sectors, for example IT and high end electronics.
The EBU’s argument is that common language, and a large coherent domestic market with greater economies of scale and greater access to capital, would also apply to other sectors. So would the supposed threat to cultural diversity. This coincides with a continuing EU campaign to open China’s markets to more competition, which has been partly successful in winning a World Trade Organization (WTO) case against the country over access to raw materials, as well as lowering import duties in Russia and opening the Indian market to EU telecommunication equipment. But these campaigns have been compromised by the EU’s own ambivalence over the relationship between regulation and trade, often appearing to be erecting barriers on spurious or over-zealous ethical or health and safety grounds to block imports, sometimes even between member states.
The tension over TV and film goes back well over two decades, recalling lobbying from broadcasters and some states in the late 1980s for a quota limiting the amount of air time that TV stations could devote to shows made in America, supposedly to preserve the continent’s ‘cultural health’. After years of wrangling the EU arrived at a fudge based on nonbinding rules urging broadcasters to devote a majority of their air time to European shows. It was actually non English speaking countries that felt most threatened then, with France being the most ardent supporter of compulsory quotas. Nothing much has changed there and this reflects a cultural inferiority complex allied with conservative programming vulnerable to US shows with greater popular appeal, especially to younger viewers, just as US fast food made great in-roads against France’s hallowed, but sometimes static cuisine.
Despite being voluntary, the Americans accused the EU of protectionism over TV, with two of the states, Belgium and Denmark, opposing the EU measures. It is no coincidence perhaps that over 20 years on Denmark is being feted globally for its TV dramas and thrillers, which have become significant export earners across Europe and the US. Denmark has long seen an open TV market as an opportunity rather than a threat.
Since those earlier measures the arguments have rumbled on, punctuated by occasional eructations during rounds of multilateral GATT talks, as in 2003 when the EBU urged the EU to stick to the mandate it had held in October 1999, stressing the need to ensure ‘that the Community and its Member States maintain the possibility to preserve and develop their capacity to define and implement their cultural and audio-visual policies for the purpose of preserving their cultural diversity.’ This typical Euro speak has been avoided this time round, but otherwise the stance has not changed at all, still with a call to preserve the majority of air time for local shows.
The problem this time is that given the EU’s parlous economic state after many years of successive GDP declines, which accelerated after the credit crunch, coupled with the US desire to stimulate an important export market, there is a determination on both sides to go further than before. This is creating the impetus finally to establish the Transatlantic Free Trade Area (TAFTA) or Transatlantic Trade and Investment Partnership (TTIP) to enable free trade between the US and EU. It was first considered in the 1990s and revisited in 2007 and dropped in each case until being revived with renewed vigour in 2013 by the ‘United States-European Union High Level Working Group on Jobs and Growth’, which recommended the start of formal negotiations on the TTIP.
Under this background the TV film and film sectors are likely to have to concede some of the ground they have held onto stubbornly for over two decades. This should be welcomed as it will stimulate production of better content, just as the French are finally starting to innovate in cuisine again.