NATIONAL SUPERSTRUCTURES

for Publicly Funding the Fine Arts (Page 4)

Market Realism, WIPO, WTO & WWW

The triumph of the market over Marx is embodied in the World Trade Organization (WTO) created in 1994.  For the first time in history the nations of the world have agreed upon the rules of international trade and have accepted the market as the appropriate mechanism.  The treaty establishing the WTO is called, in diplomatic terms, a 'single undertaking', that is, it is a set of legal instruments constituting a single package permitting only a single signature without reservation.  To join the WTO, a nation must accept all agreements in the package.
WTO continues - at present and with increasing criticism from the USA - GATT's 'traditional' exemptions for cultural goods and services, e.g. the 'morals clause' and film and television in quotas. Thus GATT distinguishes between commercial cultural goods and services from other goods and services. There are four provisions of the GATT permitting such a distinction.

First, quotas are protectionist measures, which run contrary to free circulation of goods as defined by Article XI of the 1947 GATT agreement. However, an exemption was granted with respect to cinema exhibition.  Article III (10) makes reference to the exemption, while Article IV is entirely devoted to special arrangements for fixing showing quotas in the film industry.  This provision represented a compromise between the USA film industry and Europeans keen to maintain quotas established between 1919 and 1939.  In 1947, to the USA, such quotas were the least harmful of possible restrictions.

Second, Article XII of GATT allows temporary restrictive measures to safeguard balance of payments. In the case of cultural goods and services, Canada and the EEC are in a serious and persistent trade deficit with the United States in entertainment programming. Restrictions must, however, be preceded by advance warning to other GATT partners. A decision to invoke this exemption would necessarily be a political decision.

Third, Article XX sub (a) and (f) similarly allow for certain exceptions. In the case of sub (a), restrictions are permitted to protect public morals.  To the degree public morals form a distinct part of national culture, then to that degree foreign cultural goods threatening public morals can be restricted.  The most obvious example is Islamic societies that hold fundamentally different values from the West concerning portrayal of the relationship between men and women.  But continuing controversy in many Western states concerning sex and violence in books, film, video and TV programming has traditionally been used to justify restrictions on cultural goods imported from more 'liberal' countries.
In the case of sub (f), exceptions to trade liberalization are allowed for the protection of artistic, historic and archaeological treasures.  In principle, this provision could be extended to the cultural industries to provide protection of cultural identity. Similarly, Article 36 of the Treaty of Rome, which created the European Union, exempts cultural treasurers from the general prohibition on quantitative restrictions on trade. This exemption is, however, the subject of ongoing controversy as the 'Single Market' matures.

Fourth, Article XXI of GATT provides specific exceptions when 'national security' is involved.  While formally limited to atomic materials, arms trade and emergency actions, the concept of 'national security' is explicitly used by the USA to restrict foreign ownership of broadcasting.  A former Prime Minister of Canada also publicly equated 'cultural sovereignty' with national security.  In this regard, under the Canada/USA and the North American Free Trade Agreements, public subsidies and other support to the cultural industries existing at the time of signing, are exempt from the general principle of freer trade.

Unlike its predecessor, however, the WTO has the power through formal 'dispute settlement mechanisms' to enforce its rules and findings of unfair trade practices.  This means that interpretation of treaty provisions is now subject to adjudication and revision unless the WTO chooses to explicitly exempt traditional 'cultural' protections.  The WTO also, for the first time, regulates international trade in intellectual property or 'IP' (Trade Aspects of Intellectual Property - TRIPS) unlike the original GATT. Previously IP was subject to separate non-trade-related international IP conventions such as the 1886 Berne Copyright Convention administered by the World Intellectual Property Organization (WIPO) created out of UNESCO in 1965.  WIPO recently established dispute settlement mechanisms concerning 'domain names' and 'cyber squatting' on the Internet or World-Wide Web (WWW).

A recent WTO decision involving Canada and the USA highlights the 'revisionary' powers of the WTO relative to GATT and the fact that existing 'cultural' protections are vulnerable.  The dispute involved 'split runs' of pre-expensed American magazines containing a sliver of additional Canadian content.  While the Government of Canada proposed to 'grand-father' Time Magazine and Sports Illustrated (permitting them to sell advertising space as 'Canadian' for purposes of the Canadian Income Tax Act), it prohibited others, e.g. Esquire, that would drain Canadian advertising dollars away from the Canadian magazine and periodical industry.  The USA took the dispute to the WTO and eventually, in 2000, won.  Split-runs and Canadian advertisers in them must be now treated as any other 'Canadian' magazine.

The Government of Canada dismantled the program and is developing a direct 'grant program' to support the domestic magazine industry.  The Government also, as the dispute waxed, initiated a troika of international cultural sovereignty conferences:

• International Meeting on Cultural Policy, Ottawa, June 1998;

• At Home in the World: An International Forum on Culture and Cooperation, Ottawa, June 1998;

• World Summit on the Arts and Culture, Ottawa, December 2000; and,

• worked with France and Sweden at the December 1999 WTO Seattle Summit pressing for formal exemption of cultural goods and services.

At the same time that the Government of Canada has been beating the drum of cultural sovereignty it has engaged in fostering development of 'Hollywood North', i.e. Canada.  A number of forces are at play: the low Canadian dollar; employment tax benefits; and, investment through special 'film and television production funds' bankrolled out of cable, satellite and specialty television and radio channel licensing fees levied by the Government of Canada.  The 'market reality' is that the United States is a near monopsonist in consumption of commercial cultural products.  Except for India, the U.S. is the only economy large enough to break-even in its domestic market selling products incorporating world-class production values, e.g. the evolving special effects embodied in The Star Wars Trilogies.  Other countries simply must sell in the U.S. market to break-even on comparable products.  The result is production of what are called 'American cultural clones', not indigenous art and culture.  The U.S. objects to 'subsidization' of cultural products targeted at the American market and argues WTO cultural exemptions should be set aside.

Subsidies to the commercial culture will continually be threatened by the USA. However, under GATT countervails are possible only if there is proof of injury to USA producers.  In this regard in 2000, the Hollywood film industry lobbied Washington about Hollywood North and the resulting job losses in California.

On the surface these developments do not seem favorable to the domestic nonprofit fine arts of any WTO member country.  At bottom, however, there are some silver linings.  First, American scrutiny of commercial subsidies should lead other WTO member states, in their pursuit of cultural sovereignty, away from support to the commercial sector and towards the nonprofit arts. As the root from which the arts industry in any country grows, the fine arts can serve to nurture financially valuable cultural properties like Abba, Armani, the Beatles, Agatha Christie and Star Wars.  The fine arts provide the standards of excellence and the talent pool to increase or decrease the odds of national success.

Second, behind the scenes (the etymological meaning of the English word 'obscene') lurks a new nervous system encircling the planet Earth - the World Wide Web, the WWW or 'the Web', for short.  In less than a decade communications it has affected economics, education, entertainment, health care, information, news and the nature of work. In this decade, almost every mechanical and electronic device will be 'plugged' into the Web.  From automobiles, ships, trucks and trains to home air conditioning, computer, heating, lighting and security systems to microwave ovens, refrigerators, toasters, toilets and TV sets: all and many more on the drawing board will be attached to the emerging global nervous system called the Web.

Distribution costs using the WWW are virtually zero.  The ability of national cultures to get their artistic products to their own and foreign citizens should be greatly enhanced as the web matures.  The implications of the WWW for the fine arts cannot be fully explored in this article.  The words of noted copyright lawyer, David Nimmers, hint, however, at its potential:

d) New forms of interactive authorship.

Getting even further "out there," the question arises whether the Internet will facilitate new forms of authorship that were not hitherto possible.  For instance, a recent SIGGRAPH conference in L.A. was described to me as follows: Each member in the audience was given a wand, while supersensitive electronic equipment was calibrated to the totality of those wands.  When the thousand members in the audience waved and manipulated their wands, the result was the creation of images of colors and movement on a gigantic, full-wall electronic screen.

From a copyright standpoint, what resulted?  Was it graphical?  Was it fixed?  Was it a work of authorship?  Whose?

Was it even "art"?

These questions simply adumbrate in miniature the completely unanticipated vistas that a world of interactive authorship might show us.  Most, if not all, doctrines of copyright law are destined to become inapplicable, anachronistic, or at least severely distended, in such a brave new world.  For the High Priesthood of copyright to even contemplate such potentialities might require the utmost in retooling.  Not surprisingly, contemplation of developments such as these was not much in evidence in Geneva. (Nimmers 1998)

Subsidiarity, The Second Wave & The Little Sisters

Derived from a papal encyclical, the term the subsidiarity principle has been adopted by the European Union to mean at one and the same time:

• "if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale or effect of the proposed action, be better achieved by the Community', and,

• "decisions are taken as closely as possible to the citizen".

In effect, it means that the 'Union' targets policies and programs at the regional or sub-national level, e.g. Sicily and Calabria, not at the national level, Italy (Chartrand 1991a).  This has been the case with regional cultures, languages and the arts that are being fostered in a way the traditional nation states and their search for 'national unity', never did.  This has favored the fine arts in that it has encouraged expression at the regional level; it has not favored the fine arts in that the bulk of funding goes to 'folk' art rather than 'high' art.

In the English-speaking world a similar phenomenon is the 'Second Wave' of arts councils created in the 1980s.  Funded by lottery monies a new set of 'arm's length' arts councils appear in the 1980s at the provincial and state level in Canada and the USA and at the national level in the UK during the 1990s. Funded by monies either rejected by fine arts councils, e.g. Canada (Chartrand, Ruston 1981) or never offered (UK), this Second Wave tends to support amateur, community, folk or 'grass roots' art activities.  In the English-speaking world this has, as in Europe, favored the fine arts in that it has encouraged expression at the regional level and not favored them in that the bulk of funding tends to go to 'folk' or 'community' rather than 'high' art.

By 'folk' arts I mean post-modern, multicultural urban folk art that sometimes rises to a 'fine art'.  A case in point is that the Canada Council for the Arts now recognizes 'Classical Indian Dance' as a distinct fine arts discipline like ballet.  The fine arts in a global economy includes more than traditional Western European fine arts.  The impact of Japanese print in the late 19th and early 20th centuries on painting in Europe is an early example of the 'cross pollination' that can be expected in future.

Related to growing support to 'provincial', 'regional' or 'state' cultures is the concept of 'The Little Sisters" (Vettraino-Soulard 1983).  A fundamental characteristic of cultural goods and services is that they are carriers of 'values' rather than utilitarian function like a coffee pot, automobile or bank account.  The importance of 'values' is apparent in the ongoing debate about 'cultural sovereignty'.  One side argues that national and regional identity is based upon a distinct set of values embodied in cultural goods and services. Even in the United States, some are now raising this argument as foreign interests increasingly acquire American cultural enterprise.  Some point to the rising tide of regionalism within formerly unified states such as the Soviet Union and Canada as evidence of the importance of cultural sovereignty.  These regional cultures, or 'little sisters', contend with the homogenizing and standardizing influence of a global 'Big Brother' culture that today is essentially American.  Protection of diversity of regional and indigenous cultures is likely to become as important in the 21st century as the environmental or 'Green' movement of the 20th.  If it is important to maintain the rain forest for purposes of biodiversity, is it not equally important to preserve the indigenous cultures that live within them?

Conclusions

As the 21st century opens, the fine arts find themselves between a rock and a hard place with respect to public funding.  On the one hand, market realism and the search for cultural sovereignty is fuelling the attempt by governments around the world to develop a financially viable entertainment arts industry to compete with the American super-culture.  This leaves the fine arts competing for government funding with a much better organized and politically acceptable sector of the arts industry.

On the other hand, new public monies flowing from lotteries in the English-speaking world and through application of subsidiarity in the European Union are flowing to the amateur or community-based arts.  This yet again leaves the fine arts competing for public funding with a more politically acceptable sector of the arts industry.

In both cases the shift from the politics of elite accommodation to the politics of polls has isolated the 'elite' fine arts from an increasingly egalitarian political process.  What are the fine arts to do?  In my opinion they must first 'position' themselves within a more broadly defined arts industry made up of the amateur, applied, entertainment, fine and heritage arts.  To do so the fine arts must articulate their contribution to the more politically acceptable, economically important and less controversial sectors of the industry, e.g. serving as the research and development sector.  In turn, the fine arts must help articulate why the arts industry as a whole is increasingly important to the economic and political competitiveness of nations.