French film quotas and cultural protectionism

By Karen Rinaman

          CASE NUMBER:      332

I. IDENTIFICATION 1. The Issue The 1989 EU "Television Without Frontiers" directive and quotas implemented by the French Government limit the number of American films shown in French theaters and on French Television. The EU Broadcast Directive was passed inOctober 1989 in an effort to protect and promote the Europeancultural identity. The directiverequires that EU member-states reserve a majority (51 percent) of entertainment broadcast transmission time for programs of European origin. France lobbied hardest to pass the EU directive and has since implemented the most stringent quotas within its national system. In order to show its good faith, France even requires its TV and Movie distributors to purchase from European neighbors, without any guarantee that they will reciporicate. In the context of this case study, the principles and rationale prescribed by the French government will be examined. 2. Description The EU Directive requires that EU member-states "ensure wherever practicable and by appropriate means that broadcasters reserve for European works the majority proportion of their transmission time, excluding the time appointed to news, sports events, games, advertising and teletext services"(1). The directive included all EU countries at the time it was created, requiring each country to implement quotas for European-made audio-visual programming. By the end of the year in 1993, all EU member-states had enacted legislation, thereby fully implementing the directive in their national legislation (2). Of all of the EU member-states France implemented the most aggressive quota system. It has since since put forth the greatest effort to fend off what it has termed "American cultural imperialism.." France currently requires that no more than 40%of films shown in France are of non-European origin. Its dedication to the quota system is also evident in its repeated lobbying efforts within the EU. The goal would be to have every European member-state impose similiar quota systems. French President Jacqes Chirac strongly supports restrictions within the entertainment industry because as he puts it -- he does not want to see "European culture sterilized or obliterated by American Culture for economic reasons that have nothing to do with real culture" (3). (The economic reasons Chirac refers to involve the enormous American film budgets as compared with the meager budgets of most European films.) Recent Hollywood releases play at one-fourth of France's 4,500 cinemas. Chirac also supports cultural exception, and production and distribution quotas on cultural materials like film and TV. (Cultural exception is the issue most controversial to many American film makers and to the US government because it leaves cultural productions out of the discussion for international free-trade agreements.) EU officials claim that quotas and trade limitations set forth by policies like the "Television Without Frontiers" directive are not intended to keep American productions out of Europe as American entertainment executives claim. They say that the goal is to liberalize trade, not restrain it; to enhance business opportunities for all broadcasting companies selling in Europe (4). Europeans, and especially the French say, "A legitimate desire to preserve national and regional identities should not be confused with protectionism (5). Creating a more level playing ground within the film industry worldwide is goal France seems to be working toward. FRENCH INDUSTRY IMPLICATIONS AND REACTIONS According to the French Ministry of Culture, the vast majority of French Television professionals and Film distributors favor quotas and program restrictions. The country's two public television channels, France 2 and France 3, are reported to be officially in favor. In private interviews, however, program planners from the stations say that the quotas are a restriction of not only their professional freedom, but the freedom of the viewing public. (6) France's film industry is based on a system of subsidies which already give the film industry a significant boost. Aided by the additional influx of funding from subsidies, a total of about one- hundred and thirty films are made in France each year. Many of the films are co-produced with television companies to be used two years after general release for TV programming. Even with that number of movies per year, the demand for programming on television cannot be met. The law in France requires that no more than 40% of television programs be of non-European origin and so the television programmers often find themselves short of material. As a result they must run frequent repeats and show second-rate films during prime time. A further hindrance to the television companies is that French law requires television channels to invest 15% of their turnover in the production of "original French works." Many television company executives feel that the financial investment requirement to French works is enough without strict quota requirements that cause programmers to scramble for material.(7) To make everything more frustrating for those in the French entertainment industry, France is the only EU country that requires its stations to purchase programs from other EU nations. Nothing forces EU partners to purchase French programming.(8) Those who oppose protectionism say that "barriers and protectionism...are out of place in a world of creative competition and expanding visual choice"(8A). Although traditional producers of film in Europe want continued policies of government protection, from subsidies to quotas, commercially oriented television producers are increasingly skeptical about government requirements that are allegedly to protect European culture. As a result there is significant debate between the Association of Commercial Television and the traditional auteur genre of filmmaking (8B). UNITED STATES OPPOSITION The EU Directive and quotas like those imposed by the French have been met with much opposition from the United States. As the world's largest exporter of audio-visual programming, the US stands to lose most from the initiatives in terms of economic control within the entertainment industry. US film producers are concerned with the directive's implications because the industry earns $3.5 billion per year from the exports to the European audio-visual market. Their interests have been presented for many years by the Motion Picture Association of America (MPAA) which is one of the most effective lobbying groups in Washington. The United States Government's opposition is based on its view that the directive is an economic measure designed to protect the European industry from external competition. (9). In light of the US trade deficit, the trade surplus generated by the motion picture industry is a compelling reason for Congress to take action. In addition, TV film production for Europe is a growth area which could help to decrease the trade deficit even more.(10) The United States has held consultation with the EU under GATT article XXII concerning the directive. The US stance is that the quotas violate member- states' obligations under the GATT. The US contends that it is entitled to take further action based on its GATT rights and will therefore monitor the implementation of the EU measures closely, in order to ascertain whether Super 301 measures will be necessary. (11.) THE REALITIES While the European commission imposes quotas to defend European cultural identity -- 18 million viewers from the five largest European countries tune in each week to see American programs like "Baywatch"(12). Such American programs are as popular in many EU nations as their highest rated nationally-produced programs. Many large commercial broadcasters in Europe such as TF1, France's first privatized channel are well aware of this fact and for this reason have more net imports of programming from the United States than from any other country. Feature films from the United States are equally popular with European audiences and as a result European dependence on American films and programming has grown dramatically in recent years. American films represent 82% of the films shown in Europe and this dominance is bolstered by the fact that American media groups own some 60 percent of European distribution networks.(13) Dominance in the film industry, both for television and the theater, is based on the economies that flow from the US scale of production and the fact that costs can be recouped in the US domestic market before American programs are exported. Europe is fragmented by language, tradition and differing attitudes to commercial broadcasting. Limited Programming resources in Europe lead many nations to buy US programming; it is less expensive than creating programming domestically and is generally of higher quality(14). FRANCE/ THE CULTURAL ISSUE Cultural products and services -- films, TV programs, books, music, ect. -- in addition to offering entertainment, are ideological items which embody social values and messages, and consequently influence the organization of entire social systems. (15) For this reason, borderless information and the entertainment media are increasingly being viewed not as positive forces for integration, but as divisive mechanisms which threaten national and cultural sovereignty. The cultural environment, as a system of symbols, images, words, concepts, stories and values is considered a shared resource held more or less in common by the people of a particular society or nation.(16) As such, it is in the common interest of a community to maintain and protect the cultural environment with the same conviction that one may hold for his or her physical environment. This rationale has prompted France to protect its cultural environment from cultural products exported from other nations -- particularly from the United States. France's fear of cultural homogenization was legitimized when the European Union pushed for cultural exception for audio-visual products during the final days of the Uruguay Round. As a result of heavy French lobbying, audio-visuals were excluded from the GATT on the grounds of "cultural exception". In France's mind, it had won the right to protect its film business from "cultural imperialism." Because the audio-visual dossier was excised from the agreement, the sector will not be subject to GATT Constraints. In retaliation, America could apply powerful anti-dumping duties against French films exported to the US such as Germinal. However, with only $288 million of French films exported to the US, compared with $3.7 billion worth exported the other direction, such a retaliation seems unlikely (17). OPINIONS Some say France has imposed its national agenda onto the other member-nations of the European Union without their consent by rallying against cultural imperialism. Presently, the European entertainment industry and The Netherlands, Denmark and Britain oppose the restrictions. Britain sets local-content rules for terrestrial television, but not for satellite and cable channels. (18). Former United States Trade Representative Mickey Kantor took Cananda to the WTO over its magazine policies-- they restrict US products in the Canadian market--in order to send a message Kantor stated that "the action is important in setting a clear precedent that the US is prepared to act on so-called cultural issues where there is discrimination against US interests (19). Kantor has expressed further concern that restrictions of this nature will impact the United States even more if they are extended in the future to include other lucrative information technologies such as the internet. If given a choice between subsidies and exclusionary quotas, the American Entertainment Industry has fewer objections to subsidies. The theory is that supporting domestic movie making will boost overall demand. Hollywood's reaction to directives like "Television Without Frontiers" was to launch a well-organized lobbying campaign against the EU. The film industry fought throughout the Uruguay Round to extend international trade rules to audiovisual products. These efforts failed, and most Americans agree that the best action at this point is to let the Europeans "fight this out on their own" so that the US will not serve to polarize the debate as it did in 1993. Without the US involved to polarize the issue, some trade representatives believe that the debate will shift. They feel that the issue of US Culture invading Europe will be replaced by the issue of one nation, for example France, imposing its cultural policy's on all of Europe. THE IRONY OF IT ALL Cultural imperialism and the American film industry's threat to the French identity developed in the last two decades. Years ago when the annual Deauville festival of American film was begun in France it was supported by many of the French bourgeoisie. At that time French films were of equal caliber to American- made films, and the French welcomed American films; they did not see them as a threat. Paradoxically, the French thought the film festival was a great idea and the Americans were mildly apprehensive.(20) Today, the situation is reversed, former French Cultural Minister Jack Lang urges that the festival be boycotted, and French writers are claiming that the "cultural colonization of France by American films" has reached its saturation level.(21)
Key words: (1): Cultural Imperialism (2): Protectionism (3): Quotas 4. DRAFT AUTHOR: Karen Rinaman AUGUST 1996 B. LEGAL CLUSTER 5. DISCOURSE AND STATUS:DISAGREE AND IN PROGRESS 6. FORUM:GATT and MULTILATERAL 7. Decision Breadth: 11 8. Legal Standing:TREATY D. GEOGRAPHIC Filters 9. Geography a. Continental Domain:EUROPE b. Geographic Site: Western Europe c. Geographic Impact:FRANCE 10. SUB-STATE:NO 11. TYPE OF HABITAT:TEMP
IV. TRADE Cluster 12. Type of Measure:QUOTA 13. Direct vs. Indirect Impacts: DIRECT 14. Relation of Trade Measure to Cultural Environmental Impact a. Directly related:FILM b. Indirectly related:NO c. Not Related:NO d. Process related:CULTURAL LOSS 15. Trade Product Identification: Film and television programming 16. Economic Data Economic Data Table The outflow for revenue from Western Europe to the United States for film and television programs is estimated to be about $800 million annually. This amount is increasing annually and is not compensated for by US purchases of European programs: only 2 percent of programs on US screens come from Europe, and these are mainly British programs on minority channels, such as public service TV or special cable channels. Europeans earn about $900,000 ECUs from program exports -- three quarters of this accruing to the UK (22). 17. Impact of Trade Restriction:HIGH The impact of production and distribution quotas in France has been given mixed reviews. Many Americans believe that limiting the number of larger grossing American movies out of European theaters, countries like France will lose a major revenue source. France believes that it is seeing some significant returns from the quota system. Last year, French films took in 35.4 percent of France's box office sales -- an increase from 1994 when it had 28.2 percent. Meanwhile, U.S. share of France's box office sales fell to 54.2 percent in 1995, down from the previous year's 60.5 percent.(23) 18. Industry Sector:ENTERTAINMENT 19. Exporters and Importers: US AND FRANCE
V. ENVIRONMENT Cluster 20. Environmental Problem Type:CULTURAL 21. Number of Species: NA 22. Resource Impact: NA 23. Urgency of Problem: 24. Substitutes:LIKE PRODUCTS
VI. OTHER Factors 25. Culture: What is it about American media products that has such a widespread influence over the world's peoples? Perhaps film critic Richard Reeves captures it best: "Film and television series of Hollywood and the Holiday Inns... the Nashville sound, and the sounds of English language, Coca-Cola, blue jeans, sweatshirts, shaking hands, majority rule and freedom of the press seem to appeal to something essential in men and women" (24). Another aspect of this is the availability of programming to the average francophone viewer. 27,000 hours of French-language television is available to the average francophone viewer annually. Even with so much programming, more is still necessary to satisfy viewer demand -- and so ninety percent of all drama on French-langauge television is produced in a non-francophone country.(25) . EUROPEAN MENTALITY? A 52-year-old Frenchman was asked his opinion of Cape Fear upon leaving a screening of the film in Paris. He said "the film was too brutal and does not suit European values." (26) The man's comments reflect the general opinion of most French people when they are asked about their perception of American film and cultural imperialism. The concern for some is that a cultural invasion by US programs could be followed by the influx of what they call "problems gripping American society", such as the proliferation of handguns. European governments like France have therefore claimed that their national identities would be threatened if Hollywood obtained unrestricted access to Europe. 26. Trans-Boundary Issues: 27. Human Rights: Some people are opposed to this quota system because they feel that "people, not governments, should have the right to judge films." Quotas take away people's rights to freedom of choice by limiting access to programming. 28. Relevant Literature: 1. Bremmer, Charles, "MEPs Push for controls on TV and internet. The Times (13 February 1996: Overseas News Section) 2. European Media Business and Finance. (Information Access Company: 11 March 1996: No.6, Vol. 6) 3. EU "Compromise Developed on Quotas for TV Programming, EU Official says. BNA International Business and Finance: (24 October 1995) 4. Frederick, Howard H.,Global Communication and International Relations. (Belmont, CA: Wadsworth Publishing Company, 1992). 5. Follain, John, "Deauville Festival, a Whipping Boy in US French Film War" BC CYLCE (2 September 1994) 6. Powell, Nicholas, "Bid to Hold Back TV's Transatlantic Tide" The Herald (Glasglow) (15 February 1995, v. 16: p 12) 7. "We Are Not An Average Nation: An Exclusive Talk With Jacqes Chirac" Time (11 December 1995:Interview Section, p. 59) 8. Snoddy, Raymond. "Can Europe Compete? The Financial Times (1 March 1994: p. 14) 9. "Strains in the Global Village" Financial Times. (16 February 1996: Leading Article, p 21.) 10. Suine, Karen and Wolfgang Truetzshler, Dynamics of Media Politics. (London:Sage Publications, 1992). 11. Ulmer, James The Hollywood Reporter (7 November 1995) 12. Wildavsky, Ben, "Culture Clashes" The National Journal. ( 23 March 1996: Trade, p. 648, Vol. 28, No. 12)
ENDNOTES ENDNOTES 1. Wildavsky, Ben, "Culture Clashes" The National Journal. ( 23 March 1996: Trade, p. 648, Vol. 28, No. 12):2 2. Reuters 3. "We Are Not An Average Nation: An Exclusive Talk With Jacqes Chirac" Time (11 December 1995:Interview Section, p. 59) 4. Wildavsky, 2 5. Powell, Nicholas, "Bid to Hold Back TV's Transatlantic Tide" The Herald (Glasglow) (15 February 1995, v. 16: p 12) 6. Ibid., 12 7. Ibid., 12 8. Ibid., 12 9. Siune, Karen and Wolfgang Truetzshler, Dynamics of Media Politics. (London: Sage Publications, 1992):47 10. Ibid., 47 11. Reuters/BC Cycle Report 12. Brussels Correspondent, "French Fantasies"The Economist ( 18 March 1995):56 13. Siune, 46 14. Snoddy, Raymond. "Can Europe Compete? The Financial Times (1 March 1994):14 15. Frederick, Howard H. Global Communication and International Relations. (Belmont, CA: Wadsworth Publishing Company, 1992):146 16.Ibid., 273 17.Boris Johnson, "Gatt Deal: Paris plays obstinate and wins at every turn" The Daily Telegraph (15 December 1993):14. 18. Brussels Correspondent, The Economist:56. 19. Wildavsky, 2 1.