The Culture War: A Look at the Cultural Exception Principle in International Trade Law
FORDHAM INTERNATIONAL LAW JOURNAL
Fordham International Law Journal
Copyright c by the authors. Fordham International Law Journal is produced by The Berkeley
Electronic Press (bepress). http://ir.lawnet.fordham.edu/ilj
The Culture War: A Look at the Cultural
Exception Principle in International Trade Law
In studying the concepts of trade and culture in the context of international law, it appears
at first that the two are at odds: the cultural exception approach vouches for protectionism and
national sovereignty while trade defends liberalization and globalization. However, within this
distinction lies a misconception. Culture doesn’t necessarily reject trade. The word “exception”
does. This study presents and analyzes the notion of cultural exception within the framework of
international trade law, specifically examining the legal protections and recourses offered by the
World Trade Organization (“WTO”) and alternative treaties and agreements (e.g. Canada-U.S.
Free Trade Agreement (“CUSFTA”), United Nations Educational, Scientific, and Cultural
Organization (“UNESCO”)). While this study shows that cultural exception proponents have a hard time
making a case on the international legal stage, the challenge lies in how culture is perceived and
understood from a legal standpoint. This study delves into a number of WTO cases to assess to
what extent culture plays a role in furthering trade liberalization, taking into account the current
international debate regarding the Transatlantic Trade and Investment Partnership (“TTIP”) and
the Trans-Pacific Partnership (“TPP”).
In studying the concepts of trade and culture in the context of
international law, it appears at first that the two are at odds: the
cultural exception approach vouches for protectionism and national
sovereignty while trade defends liberalization and globalization.
However, within this distinction lies a misconception. Culture doesn’t
necessarily reject trade. The word “exception” does. This study
presents and analyzes the notion of cultural exception within the
framework of international trade law, specifically examining the legal
protections and recourses offered by the World Trade Organization
(“WTO”) and alternative treaties and agreements (e.g. Canada-U.S.
Free Trade Agreement (“CUSFTA”), United Nations Educational,
Scientific, and Cultural Organization (“UNESCO”)). While this study
shows that cultural exception proponents have a hard time making a
case on the international legal stage, the challenge lies in how culture
is perceived and understood from a legal standpoint. This study
delves into a number of WTO cases to assess to what extent culture
plays a role in furthering trade liberalization, taking into account the
current international debate regarding the Transatlantic Trade and
Investment Partnership (“TTIP”) and the Trans-Pacific Partnership
When the subject of culture is presented at the negotiation table
in the context of international trade law, the phrase “agree to
disagree” comes to mind. There is a palpable cleavage between States
regarding trade liberalization and culture. The United States sees
positively the inclusion of culture as a key component of international
trade. Cultural goods and services are viewed as profitable utilitarian
commodities that should be protected as well as disseminated
worldwide. Others, like Canada and the European Union, consider
trade liberalization to be the Achilles’ heel of their respective
cultures. As trade liberalization proceeds, many countries have
expressed their desire to protect, inter alia, national identity, beliefs,
and values through a range of policies on culture.1 Interest in the
matter resurfaced when France insisted that “l’exception culturelle”
be completely off the negotiation table of the proposed TTIP between
the United States and the European Union.2 The French got their way
and the audiovisual sector was excluded from the negotiation agenda
with the United States.3 France’s protectionism over its audiovisual
industry raises an interesting question: to what extent does trade
liberalization affect the cultural exception? Trade liberalization, from
a legal standpoint, appears to be in dissonance with the protection of
cultural sovereignty. However, the issue stems from the continuing
difficulty of qualifying culture within an international legal
The following study will first examine how culture is legally
classified and interpreted within the framework of the WTO. Once the
nature and scope of culture have been identified, the concept of
cultural exception will be analyzed by taking a look at the different
measures through which the WTO already supports or inhibits
member states from promoting or protecting their cultural goods and
services. The final part of this study will look more closely at
additional sources of international law and other types of international
agreements in order to assess whether the cultural exception fares a
better chance of protection under these alternative legal frameworks.
I. THE SOURCE: THE LEGAL CLASSIFICATION AND
QUALIFICATION OF CULTURE WITHIN THE WTO
A. The Concept of Culture within the GATT
In order to understand why a WTO member state wishes to
exclude a certain cultural sector from its bilateral or multilateral
agreements, it is important to first examine how culture fits into the
WTO framework. It is essential to begin this study with the following
statement: there is no explicit, conspicuous mention of the “cultural
exception” in the different WTO agreements. There is no mention of
the word “culture” in either the General Agreement on Tariffs and
Trade (“GATT”) or in the General Agreement on Trade and Services
(“GATS”). Culture is included in both agreements as two different
forms: goods and services. 4 GATT applies to all goods, including
cultural goods (e.g. films, CDs, books, paintings). The only
affirmative and defined treatment for these goods is in Article IV,
which provides certain exceptions to national treatment (Article III)
and most-favored nation (“MFN”) (Article I) for film screening
quotas.5 GATT 1947 shows that the original drafters were aware of
the need for treating cultural products differently. The exception was
a response to the huge number of US films flooding the European
market as a result of the disruption of trade caused by World War II.6
The only other reference to culture in the GATT is in Article XX
on “General Exceptions.” It allows members to take certain measures
to protect “public morals” (Article XX(a)) and “national treasures of
artistic, historical, or archaeological value” (Article XX (f)). The
United States has suggested that GATT Article XX is one way in
which WTO trade rules “take into account the special cultural
qualities of the audiovisual sector.”7 However, unlike agriculture or
textiles and clothing, cultural goods, apart from Article IV, do not
have their own separate legal classifications and rules to follow under
the WTO umbrella. 8 The GATT doesn’t define “artistic value” or
“public morals,” thus leaving the job of interpretation to the WTO
Panel and the Appellate Body in the dispute settlement system. Some
have argued that had the contracting parties intended to place an
explicit cultural exception in the text of the GATT, Article XX would
have been the logical place.9
Considering that the answer is not explicitly mentioned in the
text, legal interpretation would suggest that the intent of the drafters,
or travaux prépaparatoires, should be examined. During the Uruguay
Round negotiations (1986-93), the trade and culture debate between
the United States and the European Communities (and Canada) gave
way to an outright conflict centered on “cultural identity” and trade in
television programs and film, to the extent that the term “culture”
became synonymous with the word “audiovisual.” 10 The latter
consideration, as well as France’s position on excluding the
audiovisual sector from TTIP negotiations, implies that the
audiovisual sector is the cultural product that generates the most
concern for the negotiating partners. For the purpose of this study, the
audiovisual sector will be the adopted frame of reference for culture.11
B. The Concept of Culture within the GATS
Culture is legally classified under two different regimes within
the WTO. As noted, the GATT regulates cultural goods. Goods,
however, are usually created through a service (e.g. writing a book or
painting a picture). The GATS covers the “services” component of
cultural goods. Services are invisible products without physical
properties.12 Cultural services are, for example, “Motion Picture and
Video Tape Production and Distribution Services” or “Motion Picture
Projection Services.” 13 The applicability of GATT to a scenario
involving the treatment of goods does not exclude the applicability of
GATS if the pertinent measures affect the services provided with
regard to that good. 14 For example, the cinematographic film,
regulated in GATT Article IV, would be subject to the GATS if it
were to be projected onto screens from a digital central distribution
point.15 That being said, the distinction between goods and services
was not an accident. A fact pattern may oscillate between goods and
services but the Dispute Settlement Understanding (“DSU”) prohibits
the overlap of one agreement’s treatments (GATT) to another
(GATS) and vice-versa.16
The GATS has its own version of Article XX: GATS Article
XIV. However, Article XIV only mentions “public morals” as a
general exception. There is no reference to “artistic value.” The
exclusion of “arts” from Article XIV would suggest that the legal
concept of a cultural exception would be difficult to defend under the
GATS. In addition, similar to GATT Article XX, GATS Article
XIV’s interpretation is left to the Panel and the Appellate Body.
Therefore, judicial interpretation, although only “technically” binding
to the specific underlying case in issue, could potentially lead to a
degree of legal uncertainty with regard to the use of a cultural
exception to trade in goods or services.17
the Appellate Body found that the GATT and the GATS are not mutually exclusive, so the
same measure can be subject to both GATT and GATS); Appellate Body Report, European
Communities – Regime for the Importation, Sale and Distribution of Bananas, ¶221, WTO
Doc. WT/DS2/AB/R (adopted Sept. 9, 1997).
15. Hahn, supra note 12, at 241 (quoting SASCHA WUNSCH-VINCENT, THE WTO, THE
INTERNET AND TRADE IN DIGITAL PRODUCTS – EC-US PERSPECTIVES (2006)).
16. Understanding on Rules and Procedures Governing the Settlement of Disputes, art. 3,
¶ 2, Apr. 15, 1994, 1869 U.N.T.S 401 (“The members recognize that [the dispute settlement
system] serves to preserve the rights and obligations of Members under the covered
agreements, and to clarify the existing provisions of those agreements in accordance with
customary rules of interpretation of public international law. Recommendations and rulings of
the DSB cannot add or diminish the rights and obligations provided in the covered
17. ANDREW GUZMAN & JOOST PAUWELYN, INTERNATIONAL TRADE LAW 144 (2d ed.
2012) (“It is well settled that Appellate Body reports are not binding, except with respect to
resolving the particular dispute between the parties. This, however, does not mean that
subsequent panels are free to disregard the legal interpretations and the ratio decidendi
contained in previous Appellate Body reports that have been adopted by the DSB. In
JapanAlcoholic Beverages II, the Appellate Body found that: adopted panel reports are an important
part of the GATT acquis . . . They create legitimate expectations among WTO members.”).
II. THE CLAIM: THE CULTURAL EXCEPTION'S SCOPE WITHIN
THE WTO'S LEGAL OBLIGATIONS
A. The Cultural Exception and the Non-Discrimination Principle
Member states are all subject to the general WTO principles of
non-discrimination. The above-mentioned MFN provisions (GATT
Article I and GATS Article II) and national treatment provisions
(GATT Article III and GATS Article XVII) embody this
nondiscrimination. The MFN treatment has two major applications. First,
whenever WTO members negotiate and grant trade concessions to
other states, such concessions must automatically be extended to all
other WTO members. Second, whenever a WTO member enacts
legislation or certain trade-restrictive rules, it cannot discriminate
between products from one WTO member and like products from
another country.18 There are few exceptions to MFN; for example,
GATT Article XXIV (1947) concerns the formation of a customs
union or a free trade area. Thus, within the framework of the
European Union, for example, film support policies such as import
regulations could be justified.19
If the MFN treatment is about treating other states equally,
national treatment is about treating foreign states and the domestic
state equally. Under national treatment, imported products and “like
domestic products” are to be treated equally, once the foreign goods
have entered the market.20 It is important to note that although the
GATT heavily influences the GATS, the two agreements have some
notable distinctions. Under the GATS, market access and national
treatment are only granted if and to the extent Members have entered
into pertinent specific commitments. 21 Without the commitment, a
Member is free to not grant foreign service providers the treatment
enjoyed by their domestic counterparts. In addition, Members may
opt to not grant MFN treatment provided they have listed such
differential treatment in the GATS Annex on Article II Exemptions
upon their acceding the WTO.22 Therefore, countries like France and
Canada who wish to limit the effects of trade liberalization on their
18. Id. at 304.
19. Susanne Nikoltchev, European Film Support within the WTO Framework, in IRIS
PLUS LEGAL OBSERVATIONS OF THE EUR. AUDIOVISUAL OBSERVATORY (2003).
20. GATT, supra note 5, art. 3, ¶2.
21. GATS, supra note 14, art. XX.
22. GATS, supra note 14, Annex on Article II Exemptions.
audio-visual sectors should look favorably to the flexible properties of
the GATS. Conversely, the United States, who has a strong economic
interest in disseminating its cultural products around the globe, has
entered commitments with regard to popular cultural service
products.23 It should be noted that unlike the United States, very few
Member States have entered into such commitments. By adhering to
mechanisms promoting the application of non-discriminatory trade
principles to all cultural products, the United States is directly
opposing those in favor of the cultural exception.
The following cases will illustrate how the principle of cultural
exception espoused by many Members is threatened by the United
States’ desire for less restrictive trade barriers. Trade liberalization is
often directly confronted with a number of measures taken by States
to protect their cultural industry. These measures come in the form of
subsidies and/or tax incentives (e.g. Eurimages, a Council of Europe
initiative, provides grants and loans for the co-production of European
works); measures regulating broadcasting content; measures that
control access to film markets (like screen quotas for cinemas in
France, Spain, etc.); and finally, regulatory or licensing restrictions.24
Means such as subsidies or other fiscal measures can be considered
challengeable under the GATT. In the Canada-Certain Measures
Concerning Periodicals case, the US-based company, Time Warner,
began to circumvent Canadian custom tariffs prohibiting the
importation of “split-run” magazines into Canada by electronically
beaming the content of its Sports Illustrated magazine to printing
facilities in Canada. 25 In response, the Canadian Parliament, in an
effort to protect their own culture, passed a prohibitive eighty percent
excise tax on all advertising revenue generated from split-run
magazine sales across the country. The United States lodged a claim
against Canada before the WTO’s Dispute Settlement Body (“DSB”),
arguing that since the excise tax did not apply to domestic magazines,
23. Footer & Graber, supra note 1, at 240. There are six sectors of audiovisual services,
which mainly revolve around production and distribution.
24. Hahn, supra note 12, at 122-24.
25. A split run is a run (as of a newspaper or magazine) in which something (such as an
illustration or wording of an advertisement) is changed part way through the run while
remaining in the same position in the issue (as for testing the relative effectiveness of the two
pieces of copy). Definition of Split Run, MERRIAM-WEBSTER,
https://www.merriamwebster.com/dictionary/split%20run (last visited Dec. 1, 2016).
it violated the national treatment principle of GATT Article III. 26
Canada responded that Article III was inapplicable because the
controversy was over advertising services rather than split-run goods,
and that accordingly, GATS (and not GATT) should apply. 27
Canada’s claim for GATS applicability was tactical: Canada had not
made any national treatment commitments with respect to advertising
services in the agreement.28 Despite Canada’s efforts in protecting its
cultural services, the DSB ruled in favor of the United States,
reasoning on the basis of “like products” under Article III of GATT.
The Appellate Body found that “a periodical is a good comprised of
two components: editorial content and advertising content. Both
components can be viewed as having services attributes, but they
combine to form a physical product – the periodical itself.”29
This case raises a number of issues: First, an understanding of
what “like products” legally means is essentially uncertain since there
is a discrepancy within the established case law regarding the
question.30 Second, when performing the “like products” analysis, the
Appellate Body looked at the substitutability of the different editions
of the magazines and whether they were in competition with each
other in their relevant markets. 31 The DSB therefore focused its
analysis purely on economic considerations and did not engage in
examining the value of promoting one’s particular culture. The DSB’s
restraint can be explained however, as one author noted that this
decision insists on a degree of specificity that culture could never
provide. 32 Third, this case shows that the WTO Panel and the
Appellate Body focus on the measure in question and its subsequent
effect on trade in goods and services, with physical or material nature
being a decisive criterion.33
In China—Measures Affecting Trade Rights and Distribution
Services for Certain Publications and Audiovisual Entertainment
Products, in response to China’s argument that films for theatrical
release are services and not goods, the Appellate Body reasoned that
they “do not see the clear distinction drawn by China between
‘content’ and ‘goods.’ Neither do [they] consider that content and
goods, and the regulation thereof, are mutually exclusive. Content can
be embodied in a physical carrier, and the content and carrier together
can form a good.”34 If the DSB is more inclined to give weight to the
“good” component than the “service” component, proponents of the
cultural exception may have a reason to worry, since exceptions to
non-discrimination measures are stronger under the GATS than under
the GATT, notwithstanding the “General Exception” provisions and
the Article IV screen quota exception to Article III.
B. The Cultural Exception, Safeguard Clause and General Exceptions
Based on the Appellate Body’s reasoning in both the
Periodicals case and China-Audiovisuals case, it appears that the
United States is tactically chipping away at the barriers for promoting
and protecting domestic content. As a legalistic and powerful country,
the United States has the means and the time to assert its dominance
on the international trade market. Considering the GATS provisions
for differential treatment have not persuaded the DSB, are there any
other mechanisms within the WTO framework that would allow for
proponents of the cultural exclusion to breathe a sigh of relief?
1. The Safeguard Clause
The Safeguard clause (GATT Article XIX) allows for
quantitative restrictions in the case of a threat of serious injury to
domestic producers. Article XIX states:
If, as a result of unforeseen developments . . . any product is
being imported into the territory of that contracting party in such
increased quantities and under such conditions as to cause or
threaten serious injury to domestic producers in that territory of
like or directly competitive products, the contracting party shall
be free, in respect of such product, and to the extent and for such
time as may be necessary…to remedy such injury, to suspend the
obligation in whole or in part.35
The Safeguard clause presents a number of issues for a cultural
exception claim. First, the Safeguard clause presupposes that a surge
of imports has occurred. In the context of strong trading partners like
the European Union, how would a surge of US films onto the EU
market be an “unforeseen development?” Second, the terms “like or
directly competitive products” are likely to be subject to extensive
judicial interpretation if cases like EC-Asbestos and Japan-Alcoholic
Beverages are any indication.36 Finally, as Canada-Periodicals has
demonstrated, where there are separate claims for the cultural good on
one hand and the cultural service on the other, it may be difficult to
find evidence of what the actual “source” of the injury was. However,
one could argue the case that an Article XIX claim could be possible
if the Member State’s claim involved an infant-industry—that is, a
new industry having difficulty competing with established
competitors abroad—and the United States was flooding its market
with US productions.37
2. The General Exceptions
As noted in the first section, the WTO Agreement provides for
“General Exceptions.” GATT Article XX and Article XIV both
contain the same chapeau: “Subject to the requirements that such
measures are not applied in a manner which would constitute a means
of arbitrary or unjustifiable discrimination between countries where
like conditions prevail . . . nothing in this Agreement shall be
construed to prevent the adoption of enforcement by any Member of .
. . ” followed by the exhaustive list of measures. Article XX provides
for the protection of both (a) “public morals” and (f) “national
treasures of artistic value,” whereas Article XIV(a) provides for the
protection of “public morals and public order.” The issue with
“General Exceptions” is that the measures of cultural significance that
they offer to protect are vague in their description. A definition of
“national treasures of artistic values” cannot be found in the GATT.
Moreover, as the following cases will show, the DSB is known to
35. GATT, supra note 5, art. 19, ¶1.
36. Those cases were analyzed by the DSB under Article III guidelines and not Article
XIX. These cases are just an example of the meanders of judicial interpretation.
37. Nikoltchev, supra note 19, at 3.
give a restrictive interpretation of these exceptions. However, in
U.S.Gambling, the WTO panel did recognize the potential relevance of
cultural concerns to this exception under Article XIV(a) of GATS.
The Panel stated:
We are well aware that there may be sensitivities associated with
the interpretation of the terms “public order” and “public morals”
in the context of Article XIV. In the Panel’s view, the content of
these concepts for members can vary in time and space, upon a
range of factors, including “prevailing social, cultural, ethical,
and religious values.”38
In essence, the Panel considered “culture” both in a holistic way and
in a way intrinsically linked to the Member State. Could “public
morals” be extended to the audiovisual sector for a country like
France, which considers cinema to be a dominant part of its national
identity? The case has not been made but if it were, it is important to
note that it must be considered in conjunction with the chapeau— that
is, that the measures not constitute “arbitrary or unjustifiable
discrimination.” In order to be successful under any general exception
claim, the chapeau must be respected.
So far, no claim has been brought before the DSB with regard to
Article XX(f)—“measure imposed for the protection of national
treasures of artistic, historic, or archaeological value”—in the context
of cultural products. However, a claim has been made under Article
XX(a)—“public morals.” In China-Audiovisuals, only certain
stateapproved entities had the right to engage in the business of importing
films into China. These entities entered into licensing or distribution
agreements with foreign film producers or licensors, and after a
content review, imported certain materials. The United States alleged
that China was violating certain WTO obligations, namely market
access provisions of GATS (Article XVI), national treatment
provisions provided in GATS Article XVII and GATT Article III
).39 China raised an Article XX(a) defense, claiming, inter alia, that
particular characteristics of cultural goods can have an impact on
societal and individual morals. The Panel applied the interpretation of
“public morals” developed by the panel in US-Gambling, thus
implicitly stating that “public morals” under GATS and “public
morals” under GATT are analogous. In their reasoning, the Panel,
citing US-Gambling, expressed that “Members, in applying this and
other similar social concepts, should be given some scope to define
and apply for themselves the concepts of ‘public morals’ . . . in their
respective territories, according to their own systems and scale of
values.”40 As far as the Panel is concerned, Members should be given
complete deference in this matter. However, the Panel, followed by
the Appellate Body, held China to a strict standard to justify the
inclusion of Article XX(a) “public morals” defense as “necessary.”
Both found that China failed to prove that the defense was
“necessary.”41 Therefore, not only does the chapeau narrow the scope
of Article XX, but also the terminology within the measure (in this
case, the word “necessary”), makes it difficult for a member to defend
their claim for “public morals.” By subdividing Article XX into a
rigid two-tiered test, the DSB does not fully take into account the crux
of the issue and moreover does not apply its own jurisprudence of
“weighing and balancing” a number of distinct factors relating both to
the measure sought to be justified as “necessary” and to possible
alternative measures that may be reasonably available to the Member
to achieve its desired objective.42 In sum, it appears that the DSB’s
restrictive interpretation of the WTO exception rules do little to
assuage the proponents of the cultural exception.
C. The Assessment of the Cultural Exception within the WTO
The case law presented above has demonstrated that the
measures available to protectionist Members do not appear to
convince the DSB that cultural goods and services are to be
considered not only in terms of economic goals but non-economic
goals. In the “weighing and balancing” of trade objectives versus
noneconomic goals, the DSB’s position is on the side of trade. This
should not come as a surprise considering the objectives and missions
of the WTO, but it could lead to more States preferring to form
customs unions or free trade areas. However, some could argue that it
is inherently difficult to evaluate the concept of culture within any
legal framework. Considering that there is no clear, legal outline to
work from, the DSB may not necessarily be inclined to vote against
the cultural exception, but that judicial interpretation can only go so
far without explicitly defined rules.
As a result of the Canada-Periodicals case and the DSB’s pure
economic focus, many states have felt as if their cultural identities
were not sufficiently protected under the umbrella of the WTO, and
have decided to turn instead to the United Nations and the UNESCO
Convention on the Protection and Promotion of the Diversity of
Cultural Expressions in an attempt to reassert their sovereignty over
cultural matters.43 Furthermore, as a result of the growth of the US
entertainment industry and the incredible speed at which technology
is advancing, many States have made the resolution that cultural
products are to be a moot point. In fact, in the Doha Round—the
current trade negotiation round of the WTO—Canada, the European
Union, and others refuse explicitly to enter into negotiations to
liberalize trade in cultural products.
III. THE RESULT: THE CULTURAL EXCEPTION AND
A. The UNESCO Convention
In the Forward of the Basic Texts of the Convention on the
Protection and Promotion of the Diversity of Cultural Expressions,
the Director-General of UNESCO, Irina Bokova, states the following:
“the Convention is the first international instrument of its kind to
recognize the very specific nature of cultural goods and services,
having both an economic and cultural dimension.”44 This Convention,
according to its supporters, is the legal remedy to the WTO. It will
serve the purpose of promoting cultural diversity (a more inclusive
term than “cultural exception”) in both its non-economic goals as well
as its economic goals. France and Canada spearheaded the
Convention. They saw within the framework of UNESCO an
43. See Christopher M. Bruner, Culture, Sovereignty, and Hollywood: UNESCO and the
Future of Trade on Cultural Products, 40 N.Y.U. INT’L L. & POL. 351, 356-57 (2007).
44 . UNESCO, BASIC TEXTS OF THE 2005 CONVENTION ON THE PROTECTION AND
PROMOTION OF THE DIVERSITY OF CULTURAL EXPRESSIONS (2013).
alternative dispute resolution process to the WTO for matters of
culture and trade.
The UNESCO General Conference adopted the Convention on
October 20, 2005 and many States were eager to affix their name to
the treaty.45 As of today, the United States still refuses to join. In fact,
the United States is the main challenger to this Convention. It believes
that this treaty would restrict exports of US audiovisual products, a
sector where it is in an advantageous position. To countries like
France and Canada, with a long history of subsidies and quotas to
help their movie and television industries, this Convention is a
stepping-stone to limiting the influx of US popular culture and
protecting their cultural sovereignty. The debated issue is the impact
of this Convention upon international law. Is the Convention a worthy
alternative to the United Sates’ long-arm reach into foreign cultural
markets? In other words, can States turn to the Convention in attempt
to bypass the WTO?
1. UNESCO Convention’s Article 20
The UNESCO Convention is a binding treaty under international
law. It imposes very few obligations on its parties. 46 Article 20,
Section V of the Convention outlines its relationship to other treaties.
. . . parties recognize that they shall perform in good faith their
obligations under this Convention and all other treaties to which
they are parties. Accordingly, without subordinating this
Convention to any other treaty, (a) they shall foster mutual
supportiveness between this Convention and the other treaties to
which they are parties, and (b) when interpreting and applying
the other treaties to which they are parties or when entering into
other international obligations, Parties shall take into account the
relevant provisions of this Convention.47
Reading the latter language, it would seem that the Convention takes
precedence over other international treaties since it explicitly states
that the Convention will not be subordinated. However, Article 20(
comes in to weaken its intentions of establishing superior legal
authority. Article 20(
) states: “Nothing in this Convention shall be
interpreted as modifying rights and obligations of the Parties under
any other treaties to which they are parties.” 48 Given the latter
provision, some argue that the Convention has no “teeth” to enforce
its principles. 49 In essence, Article 20(
) is stating that any other
treaty to which the members are parties that came before the
Convention, such as the WTO Agreements, should take legal
precedence. This provision is in line with Article 26 of the Vienna
Convention on the Law of Treaties, which requires that States avoid
as much as possible to enter into contradictory obligations.50 Since
most Members of the Convention are also parties to the WTO, and
most WTO case law appears to indicate that cultural products will be
treated the same as other products, Article 20(
) essentially impedes
any intention the Convention had to “reaffirm the sovereign rights of
States to maintain, adopt, and implement policies and measures that
they deem appropriate for the protection and promotion of the
diversity of cultural expressions on their territory.”51
2. The role of non-WTO law within the WTO dispute settlement
Considering the seemingly contradictory provisions of Article
) and Article 20(
), how is one to make sense of the legal
leverage members may have under this Convention against cultural
globalization? One may argue that the Convention is best understood
as not altering existing obligations under international trade law but as
enhancing the negotiating positions of States as they enter into future
trade agreements. One may also wonder whether the Convention, as
international law, has any effect in the WTO. The question of
nonWTO law in WTO dispute settlement is controversial and there are
diverging schools of thought. According to Professor Joel Trachtman,
the WTO Panel’s normative duty is to apply WTO law exclusively:
“It would be dangerous to confound the intent and expectations of
51. CPPDCE, supra note 47, art. 1(h).
states by forcing general international law into the WTO dispute
settlement system.” In examining the WTO Agreements, Professor
Trachtman points out that “Art. 3.2 specifies that the dispute
settlement system serves to preserve the rights and obligations of
members under the covered agreements.” 52 On the other hand,
Professor Joost Pauwelyn considers that non-WTO law is to be taken
into account in the WTO dispute settlement system, since the WTO
case law shows that the Panels and the Appellate Body have not
limited themselves to WTO law. Professor Pauwelyn states that the
DSB has “referred to general principles of law, customary
international law, and even other, non-WTO treaties.”53 Whether the
DSB should or should not apply outside law to WTO legal
proceedings is an interesting topic, but in the case of the Convention,
what matters is what Professor Pauwelyn has mentioned regarding the
past practice of the DSB. Both the Panel and the Appellate Body have
looked outside the “four corners of WTO covered agreements.”54
The Appellate Body has repeatedly stated that WTO law was not
to be “read in clinical isolation from public international law.”55 In
US-Shrimp, the Appellate Body took into account that the term
“exhaustible natural resources” must be read by a “treaty interpreter
in the light of contemporary concerns of the community of nations.”56
Furthermore, the Appellate Body turned to “modern international
conventions and declarations” for instance, “the 1982 United Nations
Convention on the Law of the Sea” to make its point that natural
resources embrace both living and non-living resources.57 Although
this decision factually concerns the environment, one could argue that
the legal interpretation process of the Appellate Body could be
advantageous to a cultural exception defense. The potential defendant
could invoke its rights arising under the UNESCO Convention as a
direct defense and even though the WTO obligations would prevail,
the Convention may serve as a “persuasive authority” type of role,
assisting the Panel and/or the Appellate Body in interpreting the
meaning of “national treasures of artistic value” under Article XX(f)
of GATT, for example. In essence, to answer the question whether the
UNESCO Convention would have any type of legal effect on the
WTO dispute settlement process is challenging. The UNESCO
Convention so far has not been invoked as a direct defense in WTO
B. Examples of different approaches to protecting the cultural exception
The increase in bilateral and multilateral agreements may be an
indication that the concerns regarding the UNESCO Convention
being “toothless” are in fact valid. In the following section, this study
examines both a Customs Union and a Free Trade Agreement: The
European Union and CUSFTA. The question remains whether these
types of agreement have more “bite” to attract culturally-conscious
1. The European Union
The European Union is a major challenger to the United States
in cultural trade negotiations. In cultural matters, the European Union
has always been at the forefront of discriminatory protectionism (with
France as its main contender). Article 167, Paragraph 4 of the Treaty
on the Functioning of the European Union (“TFEU”) explicitly states
that: “the Union shall take cultural aspects into account in its action
under other provisions of the Treaties, in particular in order to respect
and to promote the diversity of its cultures.”59 Here, “under other
provisions of the Treaties” includes trade negotiations, such as the
ongoing Doha Round in the WTO.60 In addition, the European Union, as
a signatory to the UNESCO Convention, is under the obligation to
promote cultural diversity. The European Union has stated that
protection and promotion of culture is a key policy aim. However, the
European Union has other important aims, such as the single market
and competition regulations. Under Article 101 of the TFEU, the
European Union shall prohibit activities that are incompatible with
the internal market, which may affect trade between Member States,
and “which have as their objective or effect the prevention,
restriction, or distortion of competition within the internal market.”61
Therefore, the European Union may in itself adversely affect (by its
economic goals) the non-economic cultural goals of Member States.
In May 2002, the European Commission took notice of a French
law prohibiting certain retail groups from advertising on French
television.62 The French Government argued that the law served a
cultural exception purpose: the protection of the local press. A
European Commission official remarked that despite the cultural
exception, “the single market relies on the freedom to provide
services anywhere in the Union.”63 The European Union is moving
towards more internal market harmonization, and any exceptions,
cultural or otherwise, will become harder to sustain and justify.
Although France has succeeded in keeping the audiovisual sector out
of TTIP negotiations, former European Commission President José
Manuel Barroso has stated, without naming France, that those fearful
of a US cultural invasion of Europe “have an anti-cultural agenda.”64
Despite the policies for liberalization of the internal market, the
European Union still promotes discriminatory measures with regard
to culture: both it and its Member States are free to discriminate
against foreign providers of audiovisual services. With the quota
system introduced by the Television without Borders Directive of
1989, which in 2007 became the Audiovisual Media Services
Directive (“AVMSD”), the Member States are able to set quotas to
prevent cultural globalization—essentially, and mainly, coming from
the United States.65
Outside of the European Union, meaning in both bilateral and
multilateral negotiations with other states, the European Union has
also traditionally excluded the audiovisual sector from any
commitments. When it comes to this sector, almost none of the
European Union’s foreign trade agreements allow foreign companies
access to its markets or the right to be treated the same as their EU
counterparts. How does the European Union fare against the WTO?
When the European Union negotiates, it needs to take into account its
GATT and GATS obligations. In this framework, the European Union
has referred to the concept of “promotion of cultural diversity” since
“cultural exception” has no legal status under EU law. However, as
seen above, the European Union’s standard practice is to exclude the
audiovisual sector from any commitments. The European Union also
does not negotiate in trade agreements the circumstances in which
public subsidies will be granted, in particular for services.66 Since
subsidies to culture are also excluded from trade agreements, EU
Member States, notwithstanding general GATT and GATS
obligations, are able to discriminate between foreign and domestic
organizations when subsidizing cultural activities.67
2. Canada and the United States
Canada, like France, is known for staunchly protecting its
cultural products and activities. Its main challenger is its neighbor to
the south, the United States. Considering the language barrier is
nonexistent (save for Québec), the United States sees Canada as a prime
export location for its cultural products. According to CUSFTA,
cultural industries are in principle exempt from the provisions of the
Agreement.68 The North American Free Trade Agreement superseded
CUSFTA in 1994 to include Mexico. Like its predecessor, NAFTA
provides for a similar cultural exception. As this study observes the
relationship between Canada and the United States and CUSFTA
influenced the creation of NAFTA, the former agreement is preferred
for examination. The “cultural exemption” clause serves as a marker
for cultural protection in regional settings (though Canada uses the
term “exemption” and not “exception”). In fact, France and the
European Union, to exclude culture from the GATS negotiations,
used the fact that the United States agreed to the cultural exemption
66. Id. at 5.
68. Canada-U.S. Free Trade Agreement, Can.-U.S., art. 2005, Jan. 2, 1988 [hereinafter
clause under CUSFTA. 69 The cultural exemption clause allows
Canada to maintain quotas, government subsidies, tax incentives, and
other similar measures.
Some argue however, that the cultural exemption measure has
not been effective and is undercut by the accompanying provision of
the agreement.70 Article 2005 does provide that “cultural industries
are exempt from the provisions of this Agreement” but it also states
that either party could nevertheless “take measures of equivalent
commercial effect in response to such actions.” 71 Therefore, the
cultural exemption provision is undermined by a retaliatory measure.
Canada argues that the retaliatory measure should only be limited to
Canadian measures that would violate CUFSTA, which do not extend
to audiovisual services. The United States disagrees and argues that
the retaliation provision was intended to “serve as a deterrent to the
culture exception’s use,” and the United States has looked to this
interpretation to retaliate in the audiovisual sector.72 This retaliatory
method is very much in the spirit of the retaliatory measures in the
WTO dispute settlement system. Under the Dispute Settlement
Understanding (“DSU”) in the WTO, retaliation is the final, most
serious consequence a non-implementing member faces. Article 3.7
of the DSU provides the measure. With that in mind, does the
retaliation method under CUFSTA allow for Canada to realistically
uphold its cultural exception/exemption? The issue, whether it is in
the WTO framework or under CUFSTA, is the same: the cultural
exception withstands and cultural sovereignty is protected until the
United States decides that it is hindering its market expansion.
In studying the concepts of trade and culture in the context of
international law, it appears at first that the two are at odds: the
cultural exception approach vouches for protectionism and national
sovereignty, while trade defends liberalization and globalization.
However, within this distinction lies the misconception. Culture does
not necessarily reject trade. The word “exception” does. Countries
like France and Canada have policies protecting their domestic
69. Ivan Bernier, Cultural Goods and Services in International Trade Law, in THE
CULTURE/TRADE QUANDARY: CANADA’S POLICY OPTIONS 126 (Dennis Browne ed., 1998).
70. Bruner, supra note 43, at 368.
71. CUSFTA, supra note 68.
72. Bruner, supra note 43, at 368.
cultural industries but they also want them to flourish internationally
and regionally. The UNESCO Convention refers to “cultural
diversity” which is less restrictive than the term “exception.” An
“exception” implies exclusion, whereas “diversity” relates to the
notion of cooperation.
The concept of cultural “exception” however does find its legal
justification when the adverse party is the United States. The issue is
not so much that trade agreements are not suited to deal with culture.
The issue is more that the United States is steadily attempting to
liberalize trade in the cultural industry and that trade agreements, like
the WTO provisions, have an objective and mission to liberalize
trade. The WTO considers culture like any other product (textiles,
agriculture, etc.) and according to cultural exception proponents,
within that analogy lays the dissonance. With that in mind, it would
be useful for the WTO to have a separate agreement where cultural
goods and services are considered within the legal framework of the
organization. The issue is bound to get more confusing with the
advancement of technology (e.g. on-demand internet streaming media
and the limitless production of artificial intelligence) and the
consequences it will have on the goods versus services debate.
In sum, as a result of France’s staunch objection to including the
audiovisual sector in TTIP negotiations, the question of whether
culture should receive a special treatment within the international
trade law framework has been re-introduced. As the Appellate Body
has stated with regard to public morals and necessity, it is all about
“weighing and balancing.” In the case of cultural products, the WTO
negotiating partners should seriously consider weighing and
balancing the notions of protection and promotion with regard to the
States’ sovereignty, but also the desire of their consumers.
A. The Concept of Culture within the GATT ..........................563 B. The Concept of Culture within the GATS ..........................565 II. THE CLAIM: THE CULTURAL EXCEPTION'S SCOPE WITHIN THE WTO'S LEGAL OBLIGATIONS...................567 A. The Cultural Exception and the Non-Discrimination Principle ............................................................................ 567 B. The Cultural Exception , Safeguard Clause and General Exceptions .........................................................................570
1. The Safeguard Clause....................................................570
2. The General Exceptions ................................................571 C. The Assessment of the Cultural Exception within the WTO .................................................................................. 573 III. THE RESULT: THE CULTURAL EXCEPTION AND ALTERNATIVE APPROACHES ..........................................574 A. The UNESCO Convention .................................................574
1. UNESCO Convention 's Article 20 . ..............................575
2. The role of non-WTO law within the WTO dispute settlement system ........................................................576 B. Examples of different approaches to protecting the cultural exception ..............................................................578
1. The European Union .....................................................578
2. Canada and the United States........................................580 CONCLUSION..................................................................................581
1. See Mary E. Footer & Christoph Beat Graber , Trade Liberalization and Cultural Policy , 3 J. INT'L ECON . L. 115 , 115 - 16 ( 2000 ).
2. See Peter Spiegel , France, films & foreign trade: the leaked mandate , FIN. TIMES: BRUSSELS BLOG (June 10 , 2013 ), http://blogs.ft.com/brusselsblog/2013/06/10/france-filmsforeign -trade-the-leaked-mandate/.
3. See News Wires , EU reaches deal on French 'cultural exception' , FRANCE24 (June 2013 ), http://www.france24.com/en/20130615-eu -deal-french-cultural-exception-usa-
4. Services Sectoral Classification List ( July 10 , 1991 ), GATT BISD, MTN .GNS/W/120. That being said, neither does the GATT give a definition of a “good” nor does the GATS give a definition of a “service.” Instead, the GATT Secretariat issued an indicative list of service activities or sectors that most WTO members have used as a template when making .
5 . See General Agreement on Tariffs and Trade, Oct. 30 , 1947 , 61 Stat. A- 11 , 55 U.N.T.S. 194 [ hereinafter GATT ] (“If any contracting party establishes or maintains internal quantitative regulations relating to exposed cinematographic films, such regulations shall take the form of screen quotas .”).
6 . See Chi Carmody , When “Cultural Identity Was Not At Issue”: Thinking About Canada - Certain Measures Concerning Periodicals , 30 L. & POL'Y INT'L BUS . 231 , 255 ( 1999 ).
7. Communication from the United States, Audiovisual and Related Services, ¶ 8, WTO Doc . S/CSS/W/21 (Dec. 18, 2000 ).
8. See the different sections allocated to these industries under GATT 1994 .
9. See Frederick Scott Galt , The Life, Death, and Rebirth of the “Cultural Exception” in the Multilateral Trading System: An Evolutionary Analysis of Cultural Protection and Intervention in the Face of American Pop Culture's Hegemony, 3 WASH . U. GLOBAL STUD. L. REV . 909 ( 2004 ).
10. Footer & Garber, supra note 1, at 119.
11. “ Frame of reference”: Audiovisuals will be the main, but not exclusive , focus.
12 . See Michael Hahn , The Convention on Cultural Diversity and International Economic Law , 2 ASIAN J. WTO & INT'L HEALTH L. & POL 'Y 229 , 240 ( 2007 ) (quoting Werner Zdouc, Legal Problems arising under the General Agreement on Trade in Services - Comparative Analysis of the GATS and GATT (Doctoral Thesis , Universitat St. Gallen) ( 2002 )).
13. Id .
14. See GATT , supra note 5 , annex 1B , art. I , 1 [ hereinafter GATS ] (stating broadly that it applies to any measure by any WTO member “affecting” trade in services . In EC-Bananas,
26. Panel Report , Canada-Certain Measures Concerning Periodicals , 17 , WTO Doc . WT/DS31/R (Mar. 14, 1997 ).
27. Id . at 16.
28. Id . at 17.
29 . Appellate Body Report , Canada-Certain Measures Concerning Periodicals , 17 , WTO Doc . WT/DS31/AB/R ( 1997 ).
30. See WTO Dispute Settlement: One Page Case Summaries 1995 -2011 , WTO ( 2012 ), https://www.wto.org/english/res_e/booksp_e/dispu_summary95_11_e.pdf regarding ECAsbestos, Japan-Alcoholic Beverages , EC-Bananas, and Dominican Republic-Cigarettes for an understanding of the various Appellate Body interpretations of “like products .”
31. Supra note 29, at 29.
32. Carmody , supra note 6, at 295-96.
33. GUZMAN & PAUWELYN, supra note 17, at 625.
34. Appellate Body Report , China-Measures Affecting Trade Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, ¶ 195 , WTO Doc . WT/DS363/AB/R (Dec. 21, 2009 ).
38 . Panel Report , United States - Measures Affecting the Cross Border Supply of Gambling and Betting Services, ¶ 6 .461, WTO Doc . WT/DS285/R (Nov. 10, 2004 ).
39. Request for the Establishment of a Panel by the United States, China - Measures Affecting Trade Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WTO Doc . WT/DS363/5 (Oct. 11 , 2007 ).
40. Panel Report , China-Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, 280 , WTO Doc . WT/DS363/R, (Aug. 12, 2009 ) (citing Panel Report, US-Gambling, WTO Doc . WT/DS285/R (Nov. 10, 2004 )).
41. Supra note 34.
42. Id . ¶ 239 - 42 .
45 . Kevin Scully , The Most Dangerous Game: U.S. Opposition to the Cultural Exception, 36 BROOK. J. INT'L L . 1183 , 1193 ( 2010 - 2011 ).
46. Id . (citing Mira Burri-Nenova, Trade Versus Culture in the Digital Environment: An Old Conflict in Need of a New Definition, 12 J. INT'L ECON . L. 17 , 27 ( 2009 )).
47. Convention on the Protection and Promotion of the Diversity of Cultural Expressions art . 20 ( 1 ), Oct. 20 , 2005 , 2744 U.N.T.S. 181 [ hereinafter CPPDCE ].
48. Id . art. 20 ( 2 ).
49 . Alan Riding , Entr'acte: Next Lone U.S. Dissent: Cultural Diversity Pact, N.Y. TIMES (Oct. 12 , 2005 ), http://www.nytimes.com/ 2005 /10/12/world/americas/entracte-nextlone -us-dissent-cultural-diversity-pact . html?_r=0.
50. Vienna Convention on the Law of Treaties art . 26 , May 23 , 1969 , 1155 U.N.S.T.
52. GUZMAN & PAUWELYN, supra note 17, at 139.
53. Id . (citing Joost Pauwelyn, How to Win a World Trade Organization Dispute based on non- World Trade Organization Law?: Questions of Jurisdiction and Merits , 37 J. WORLD TRADE 997 , 1030 ( 2003 )).
54. Id .
55 . See Appellate Body Report , United States - Standards for Reformulated and Conventional Gasoline, ¶ 17 , WTO Doc . WT/DS2/AB/R (adopted Apr . 29 , 1996 ); see also Appellate Body Report , Japan - Taxes on Alcoholic Beverages, ¶ 10 - 12 , WTO Doc . WT/DS8/AB/R (Oct. 4 , 1996 ).
56. See Appellate Body Report , United States - Import Prohibition of Certain Shrimp and Shrimp Products, ¶ 129 , WTO Doc . WT/DS58/AB/R (Oct. 12 , 1998 ).
57. Id . ¶ 130 .
58 . Would the Panel and Appellate Body in China - Audiovisuals have reasoned differently had China invoked its rights under the Convention as a direct defense?
59. Consolidated Version of the Treaty on the Functioning of the European Union art . 167 , 2012 O.J . C 326 /47, ¶ 4 .
60. TTIP and Culture, EUR . COMMISSION (July 16 , 2014 ), http://trade.ec.europa.eu/ doclib/docs/2014/july/tradoc_152670.pdf.
61. Supra note 59, art. 101 .
62. See JINGXIA SHI , FREE TRADE AND CULTURAL DIVERSITY IN INTERNATIONAL LAW §18.104.22.168 ( 2013 ).
63. Id .
64. Commissioner attacks Barroso's jibe at French exception , EU BUS. (June 18 , 2013 ), http://www.eubusiness.com/news-eu/us-france-trade. p81 .
65. TTIP and Culture, supra note 60.