Big concessions on NAFTA cultural exemption unlikely, experts say

As cultural protection emerges as a last-stretch NAFTA sticking point, Canadian media unions say they’re concerned but hopeful because Canada’s negotiators have indicated they won’t give up key trade exemptions that have protected Canadian media for decades. David Sparrow, the national president of the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), said it’s an “extremely important moment in our history” and it could be a “do or die moment” if protections in the North American Free Trade Agreement are at risk of being lost. “This is the very heart and soul of Canada we’re talking about,” he told The Wire Report in an interview Thursday. “It’s the thing that defines us as Canadians – the ability to tell Canadian stories from a Canadian perspective and create our own narrative in the world.” Annex 2106 in NAFTA is a brief, blanket statement that sets out an exemption for cultural industries, and another section of the trade pact allows for reviews into investments that could affect cultural heritage or national identity. The exemptions have meant NAFTA largely doesn’t apply to sectors like TV and music. Directors' Guild of Canada (DGC) national executive director Dave Forget said the importance of the clause to the industry and Canadian jobs can’t be understated. “The removal of the cultural exemption from any agreement would be catastrophic,” he said. “There is a concern — I don’t want to diminish our sense of concern — but we’re re-assured that the government understands the importance and is negotiating accordingly.” Sparrow said he’s “cautiously hopeful” amid the current negotiating climate because Canada has taken a “hard stand,” although he’s concerned about culture being raised again so late in negotiations. A senior source familiar with the talks confirmed to the Wire Report that those cultural exemptions within NAFTA have recently re-emerged as a last-stretch sticking point for the U.S. in negotiations. A year ago, experts viewed those issues as uncontroversial, and said cultural issues would not be deal-breakers in the renegotiation. Prime Minister Justin Trudeau defended the exemptions this week, telling reporters those would need to be included in any new agreement. Without the cultural exemptions, experts say the effects of a change would ripple across a swath of cultural and communications policy areas in Canada, from CRTC regulations to media funding decisions and ownership. Gregory Taylor, an assistant professor at University of Calgary’s department of communication, media and film, said Canada’s cultural industry has always been something of a “protected greenhouse” and the exemptions have meant the cultural industry hasn’t been exposed to harsh international economic pressures. “Any movement on this would be enormous,” he said. A large U.S. company like Walt Disney Co. or Fox Entertainment Group could "come in and purchase Canadian broadcasters with lunch money…but I don’t think it’s that large a market that it’s really going to be that worthwhile to them.” He said he suspects the issues re-emerged recently because the U.S. knows pushing on cultural exemptions would “get Canada’s back up” and “might give them a bargaining chip on some of the other industries” they care more about – such as dairy and Canada’s supply management system. Others also speculated it’s a U.S. pressure tactic as negotiating timelines tighten. But it’s a political position that works both ways. “It makes Trudeau look good to a lot of his political base as well as someone who is standing up for Canadian content, Canadian stories, some call it identity,” said Taylor. “This is Canadians can get emotional about.” Meanwhile, NDP MP Charlie Angus tweeted concerns Friday morning that “U.S. lobbyists are looking to squeeze concessions from Canada on patent, copyright and digital issues.” “With @JustinTrudeau now claiming he will defend our culture, watch the trade away on serious issues begin,” he wrote. Although the cultural protections in NAFTA have always been something of a thorn in America’s side, Canadian industry experts and insiders described the provisions as sacrosanct and aid they doubt that significant cultural concessions would happen. Screen-based media consultant Kelly Lynne Ashton said she can’t see Canada conceding there. “You’d have an awful lot of angry people if they discovered they lost their Murdoch Mysteries,” she said. “It’s something that Canada has fought for in every free trade negotiation, in every kind of treaty … I find it hard to believe we would actually give it up.” She added that while many pundits have pointed to the exemption being important for Quebec, it stretches across the entire cultural industry in Canada. Trudeau said in an interview on Edmonton radio Wednesday he couldn’t imagine a situation where an American network could purchase radio or TV stations – something that would be bad for Canadian identity and sovereignty. Trudeau also said, at another media availability in Edmonton, that Canada has been “very clear to the Americans” that the government can not accept a deal “that is bad for Canada.” U.S. President Donald Trump has, too, threatened to walk away from NAFTA if he can’t get what he wants. Foreign Affairs Minister Chrystia Freeland told reporters in Washington Thursday the tone of negotiations remains constructive. Canada and U.S. trade negotiators are facing a Dec. 1 deadline to reach a new trilateral agreement so a deal can be reached before Mexico’s new president comes into office. Trump announced in late August an agreement had been reached between the U.S. and Mexico, but said Canada could still sign on if a deal is hammered out by December. Cultural exemptions, dairy and the dispute resolution mechanism have been major gaps between Canadian and U.S. negotiators. U.S. Trade Representative Robert Lighthizer has also raised simultaneous substitution of Super Bowl ads as problematic for the U.S. while NAFTA talks take place. The CRTC decided in 2015 that Canadians must be able to see flashy American Super bowl ads, a decision that's currently under appeal at the Supreme Court. But the National Football League (NFL) and American networks have pushed for Lighthizer to make substitution a trade issue. A 2017 Office of The U.S. Trade Representative (USTR) report on trade barriers said it is “highly concerned about this policy” which it said “reduces the value” of the programming. Meanwhile, a Canadian copyright expert reading the trade tea leaves has suggested that copyright term extensions could still be in play. Michael Geist, a law professor at the University of Ottawa, wrote in a blog post that a fact-sheet published by the USTR on the agreement between Mexico and the U.S. has quietly changed details on copyright term extensions a number of times, leading him to speculate negotiations on that issue are ongoing. “The back-and-forth suggests that the issue may still be at play as the Canadian negotiations continue with Canada rightly opposing term extension in the updated agreement,” he wrote. A report on U.S. trade relations released earlier this year by the USTR singled out Canada over a number of IP and copyright issues, and criticized it for poor border enforcement against pirated goods. — With reporting by Kyle Duggan at kduggan@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Big concessions on NAFTA cultural exemption unlikely, experts say

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Big concessions on NAFTA cultural exemption unlikely, experts say

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