Cultural exception stands out for now.

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June 20, 2013 by Silvana Bolocan

After long negotiations by ministers of foreign affairs, on Friday the 14th of June, France managed to maintain the audiovisual sector out of the mandate. The door is left open, however, for the Commission to make further recommendations on additional negotiating mandates.

The question that comes to mind is what is really at stake in this fiercely fought opposition by several Member States, led by France? What makes the matter so sensitive to justify the firm, non-negotiable position that these states defended?

Here are some hints that could give an idea of what is at stake. According to the Treaty on the EU, the cultural sector falls within the competence of the Member States. However, European common legislation gives guidance and sets rules for the treatment of audio-visual works inside the Internal Market, within the remit of the Audio-visual Directive of 2009. By this regulation, in order to promote cultural diversity, broadcasters must reserve a majority of their transmission time for European works. They must also reserve at least 10 % of their broadcasting time or programming budget for European works created by independent producers. A similar obligation exists regarding video-on-demand services. The Commission reports periodically on the implementation of these obligations.

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:095:0001:0024:EN:PDF
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2012:0203:FIN:EN:PDF

Therefore, the cultural exceptionalism – in terms of setting quotas for broadcasting of local cultural works – that was attributed to France, is actually a legal obligation unde the EU Treaty and part of the Union acquis that all Member States must comply with. The reasons for this policy option is the protection and promotion of the diversity of cultural expressions.

Matters are complicated by some factors: first, the European audiovisual industry suffers from a trade deficit with the US industry of 6 to 7 billion Euros every year. Moreover, “several major US operators are in the process of launching their services in the EU and the emergence of new platforms will undoubtedly increase competitive pressure on the creation, financing and retail of EU works”. By “new platforms” is meant the technological trend towards the convergence of traditional media with the internet, which means that increasingly the cultural content will be broadcasted and published through the internet. Which brings us to a second complicating factor. The EU does not, as yet, benefit from a common legislative framework on the fragmented market of the EU that tackles this upcoming media convergence. The Digital Agenda is only beginning to tap into this matter.

Thus, in the stage set by this technological trend, the EU has, on the one hand a wealth of creative content, thanks to its cultural diversity, and on the other hand, weak legislative protection (thus a weak negotiating position).

At the same time the market outlook in the EU and the US differ fundamentally: a fragmented and competitive market in the EU and a virtual duopoly dominated by giant operators in the US. As Commissioner N. Kroes put it, the abuse of dominant position by the US operators puts barriers in the bilateral trade and indeed may threaten cultural diversity.

The creative industries in the EU are part of the answer to the return of growth – and the EU does have a wealth of it. It is not only one promising avenue for growth – as discussed by the EU Competitiveness Council of October 2012. But also a unique pool of innovative products that makes the EU relevant in the world. As odd as it may seem, its creative output makes the EU unique in the world, thus extremely valuable on the global marketplace.

Viewed from this standpoint, France has been defending a, as yet, poorly regulated, thus protected, asset in the race for global relevance. None of the other sensitive issues in the EU-US trade (rules of origin, agriculture, investment protection) has come to hold such relevance as the audio-visual sector. It may be that, in an age of a desperate search for creativity and innovation, the EU holds a poorly protected and not yet developed to its full potential bucket of gold.

This is a way of framing the matter which takes into account not only the French cultural sensitivities but also the intrinsic value of the European potential for setting the trends of the future – or as European Council President put it – “What’s at stake with a transatlantic free trade area, is to enshrine Europe and America’s role
as the world’s standard setters; beyond product specifications, by setting a positive force in
shaping the way we work, and the way we live our daily lives.”

http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/137501.pdf

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