International Trade of Cultural Products: It’s Complicated

A potent fear of cultural loss, homogenization, and hegemonic dominance has been a key concern for governments, civil society organizations, and ordinary citizens in recent years, in light of what has often been characterized as the steamrolling impact of globalization. While the world has grown more accustomed to the inevitability of greater economic integration, the cultural effects of globalization remain a controversial subject–especially in the realm of international trade–because of their strong ties to identity. As Voon argues, where cultural products are concerned, the unhampered functioning of the market may not “ensure a diversity of choice, access for everyone and fair competition” (2007, pg. 44). Similarly, according to Article 8 of the Universal Declaration on Cultural Diversity, cultural goods and services are “vectors of identity, values, and meaning, [which] must not be treated as mere commodities or consumer goods.”  In other words, in addition to their economic value, cultural goods are also imbued with strong forces of identity that cannot be easily quantified or dismissed.

Technological developments, combined with deregulation of telecommunication services and the rise of multinational corporations and media conglomerates, have had a revolutionary effect on cultural production, moving the status quo “from spectrum scarcity to content scarcity” (Hoskins in Galperin, 1998, pg. 5). Furthermore, audiovisual products and services exhibit public good characteristics—minimal reproduction costs and non-depletablity—which “render[s] foreign sales particularly attractive, and at the same time exacerbate[s] the advantages of producers from countries with large domestic markets” (Galperin, 1998, pg. 4).

All of these developments have helped solidify the United States as the undisputed champion of cultural production since the conclusion of World War II. From the moneyed movie-sets of Hollywood to the melodic recording rooms of its vast music industry, American culture has spread to all corners of the globe. Whether one greets such evidence of its “soft power” with joy, indifference, or contempt, however, depends on several factors, including the degree to which American cultural values are compatible with one’s religious beliefs, the extent to which the influx of foreign goods threatens local cultural production, and one’s level of economic wealth.

Because it has benefited from economies of scale, which strongly incentivize exports, significant vertical integration, and access to the vast English-speaking market, the United States may be said to enjoy a comparative advantage in the production and distribution of cultural products.  As you might imagine, this fact does not sit well with many proponents of cultural diversity.  While the United States is not the exclusive target of so-called “cultural exceptions” taken from trade liberalization (fear of cultural absorption from large neighboring states may be a more immediate fear for microstates), more often than not, protectionist measures are implicitly–if not explicitly–aimed at slowing the influx of American cultural goods.  In the process of attempting to forge a uniquely European identity, the EU–led by France–has been the most outspoken proponent of the so-called “cultural exception.”

It’s clear how the U.S. achieved its success, but is American cultural dominance here to stay? As the unyielding progression of globalization continues, countries as diverse as India and Brazil—each of which has a sizable cultural output in the form of Bollywood films and telenovelas, respectively—may well become predominant forces to be reckoned with. In other words, the role of culture in the world trading system will be intimately connected to the next developments in the global economy and the resulting (re)distribution of economic and political power.  Whether this results in a more equitable distribution of cultural products, or changes in the patterns of cultural protectionism, however, remains to be seen.

Sources

Galperin, H. (1998, May). Cultural industries policy in regional trade agreements: The cases of NAFTA, the European Union and MERCOSUR. Media, Culture & Society, 21 (5). Retrieved from: http://hernangalperin.net/wp-content/uploads/2009/09/mcs-word-version.pdf

Voon, T. (2007). Cultural Products and the World Trade Organization. Cambridge: Cambridge
University Press.