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France: Ending the Cultural Exception

By Sophie des Beauvais

The concept of “Exception Culturelle” (cultural exception) was a term first introduced by France during the General Agreement on Tariffs and Trade negotiations in 1993. It refers to the fact that cultural goods and services should not be treated as regular goods in trade agreements and at the World Trade Organization. This concept allows countries to implement indirect trade barriers, such as quotas for the diffusion of foreign artistic work or subsidies to the local cultural sector. If it was initially meant to protect French culture from the foreign—mostly English language—content flooding the market, it is truly outdated and needs to evolve.

The tensions between a protectionist French government and the Hollywood film industry sums up two radically different views: the U.S. considers arts as an industry making profits, whereas Europe considers culture as the product of ideas that extend beyond strict commercial value. Jack Valenti, former head of the Motion Picture Association of America, once said during the Uruguay round, “Culture is like chewing-gum, a product like any other.” Contrastingly, French President Francois Mitterrand once said, “The mind’s creations are no mere commodities and can’t be treated as such.” Moreover, the notion of cultural diversity, a rich intellectual and artistic debate without profit-making consideration, is crucial in Europe.

Some fear the Transatlantic Trade and Investment partnership (TTIP), a trade agreement between Europe and the U.S. currently under negotiations in Brussels, may threaten the film and arts industry in Europe. In 2013, France threatened to leave negotiations if cultural goods were not excluded from negotiations. 13 European countries joined her request. For Jose Manuel Barroso, former President of the European Commission, cultural exception is non-negotiable, but still needs to be on the table. In fact, this demand might not be smart for France as the U.S. responded by asking to exclude maritime transports from the negotiations. The conflict is indeed between different industries — film and maritime transports in this case — of the same country, rather than two different states.

In Europe, France is the most committed to the role of the state in its citizen’s life and the most fervent defender of its language and culture. But the French model of cultural exception is not sustainable anymore and doesn’t serve to protect French culture. Patrick Messerlin, Director of the “Groupe d’Economie Mondiale” (GEM) at Sciences Po, Paris, recently published a working paper that demonstrates how subsidies skyrocketed during the past 15 years—increasing by 50 to more than 100 percent since 2000—whereas the attractiveness of the French culture has been stagnant (cinema) or even declining (TV channels and series).

Patrick Messerlin shows this model has two main flaws. The first one has been in the center of the French debate for the last two years—“abundant subsidies are too easy to misuse and too conducive to rent-snapping coalitions, making them too hard to monitor effectively,” he says. The second one is economic and hardly recognized. “Abundant subsidies generate powerful incentives to spend lavishingly, in other words, to increase costs.” In fact, a parallel can be made with agricultural policy—both farming and filmming rely on resources that are difficult to expand quickly, farm land and actors. In short, subsidies benefit mostly big farms and leading actors, while supporting actors and smaller farms only get the leftovers.

Messerlin concludes that subsidies are part of the problem and not the solution. It seems that the cultural exception is now more about business and money than cultural preservation. It benefits successful artists, rather than emerging French talent.

The French long feared that American companies, like Amazon and Netflix, would bring chaos to the market. Actually, the internet-based technology is much more friendly to French culture than any other. And it can be an incredible opportunity to retreat away from subsidies. For Patrick Messerlin, Netflix, which will undoubtedly bring changes in the quotas restriction policy, should be seen as a new platform that imports, to a greater extent, foreign series in France, and exports French shows to the rest of the world.

The first to challenge the French system was Abel Ferrara, who chose to premiere his film, “Welcome to New York,” simultaneously on the web and cinemas in the U.S. and only on the web in France, since the law forbids simultaneous releases in cinemas and online. As a result, the French lost out on the opportunity to profit from its theatrical release.

The future of the French cultural exception is uncertain. On the positive side, the unexpected success of the Korean film industry should inspire European leaders. The Korean government’s film policies have played almost an insignificant role in its emergence. For economist Jimmyn Parc, the film industry’s success cannot be attributed to protective policies such as subsidies, tax rebates, and quotas, but to the role of private business in the industry. According to him, pro-competition provisions and market-oriented policies have been more crucial for Korean cinema than protective cultural policies, and he suggests that European policymakers review their own policies, which are undoubtedly antiquated and motivated by false pretenses.

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Sophie des Beauvais is an editorial assistant at World Policy Journal.

[Photo courtesy of osmii.com]

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