Liberalization of trade in television services: The negotiation dilemma and challenges for the future

Journal of World Trade

Volumn 43, Issue 4, 2009, Pages 657-681

  Peng, Shin Yi ^a,b  

^a NATIONAL TSING HUA UNIVERSITY   (Taiwan)

^b UNIVERSITY OF WISCONSIN MADISON   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

GENERAL AGREEMENT ON TRADE IN SERVICES; NEGOTIATION PROCESS; SERVICE SECTOR; TELEVISION; TRADE LIBERALIZATION; WORLD TRADE ORGANIZATION;

EID: 70349683081     PISSN: 10116702     EISSN: None     Source Type: Journal    
DOI: 10.54648/trad2009027     Document Type: Article

References (90)

1. WTO, The New Negotiations, (last visited 22 Jun. 2008).
2. WTO Secretariat, Guide to the GATS, 141 (2000).
3. See generally Joel Richard Paul, 'Cultural Resistance to Global Governance', Mich. J. Int'l L. 22 (2000): 1.
4. Harvey B. Feigenbaum, 'Public Policy and the Private Sector in Audiovisual Industries', UCLA L.R. 49 (2002): 1767, 1776.
5. Daniel Marinberg, 'GATT/WTO Waivers: "Exceptional Circumstances" as Applied to the Lomé Waiver', Bos. U.I.L.J. 129 (2001).
6. Background Note by the Secretariat, Advertising Services, S/C/W/47 (9 Jul. 1998).
7. Joint Statement on the Negotiations on Audiovisual Service, Communication from Hong Kong China, Japan, Mexico, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States, TN/S/W/49 (30 Jun. 2005). See also Informal discussion in WTO Friends of Audiovisual Group, 23 Aug. 2006.
8. Sandrine Cahn et al., ';The Cultural Exception: Does It Exist in GATT and GATS Frameworks? How Does It Affect or Is It Affected by the Agreement on TRIPs?' CDZAELJ 15 (1997): 281.
9. WTO Document, TN/S/M/7, paras 84-85, 158.
10. First Submission of the United States of America, China - Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WT/DS/363 (13 May 2008) (hereinafter the 'China-AVHE Dispute').
11. OECD, The Future of Digital Economy: Digital Content Creation, Distribution and Access, Working Party on Information Economy, January 2006, available at .
12. OECD, The Future of Digital Economy: Digital Content Creation, Distribution and Access, Working Party on Information Economy, January 2006, at10
13. UNESCO, International Flows of Selected Cultural Goods and Services (2003). The report analyzes cross-border trade data from about 120 countries for selected products, such as books, CDs, videogames and sculptures. 16 UK Department of Media, Culture and Sport, Television Export Survey (2006).
14. BBC Worldwide exports UK TV programmes around the world and poured GBP 96.3 million back into BBCcommissioned programme budgets in 2005-2006. Among others, Planet Earth was seen in 95 countries, taking more than GBP 22 million in global sales to date. Birmingham Post, UK (29 Jun. 2007).
15. Chris Barker, Television, Globalization and Cultural Identities (Buckingham: Open University Press, 1999), 36-45.
16. John Tomlinson, Globalization and Culture (Cambridge: Polity Press, 1999), 1.
17. John Tomlinson, Globalization and Culture (Cambridge: Polity Press, 1999), 268
18. UNESCO Website, Culture Diversity: (last visited 10 Jan. 2008).
19. WTO Document, Informal Meeting, Friends of Audiovisual Services (2003).
20. WTO Document, Informal Meeting, Friends of Audiovisual Services (2003) at 5.
21. Institute for Statistics, UNESCO, International Flows of Selected Cultural Goods and Services (2003).
22. Please refer to Section 2.2. of this article regarding the level of the commitments in this sector.
23. WTO, The New Negotiations, (last visited 22 Jun. 2008).
24. CPC Prov. Code 96132.
25. See generally, WTO Secretariat, Guide to the GATS: An Overview of Issues for Further Liberalization of Trade in Services (The Hague: Kluwer Law International, 2000), 531-561.
26. See generally Aaditya Mattoo, 'Services in a Development Round: Three Goals and Three Proposals', Journal of World Trade 39, no. 6 (2005): 1223-1238.
27. See also Alejandro Jara et al., 'Liberalization of Trade in Services and Trade Negotiations', Journal of World Trade 40, no. 1 (2006): 113-127.
28. Report by the Chairman, The Completion of the Services Negotiations, TN/S/33 (26 May 2008).
29. Report by the Chairman of the TNC, Services Signaling Conference, JOB(08)/93, 30 (July 2008).
30. AV Friends (9 Feb. 2005).
31. Note by the Secretariat, Document MTN.GNS/W/120, 10 Jul. 1991. For the purposes of the Uruguay Round negotiations, the WTO Secretariat developed the GATS Services Sectoral Classification List ('the W/120'), to enhance the consistency of the commitments undertaken by Members. The W/120 breaks down the telecoms sector into 14 sub-sectors and an 'other' category. Although optional, most Members follow the W/120 classification system, whose 160 sub-sectors are defined as aggregates of the more detailed categories contained in the United Nations provisional CPC. Thus, CPC categories help clarify the scope of the commitments actually undertaken under the GATS, and most Members list the corresponding CPC numbers when scheduling their GATS commitments.
32. S/CSS/W/74; S/CSS/M/9, para. 197.
33. 'Radio and television licenses may not be held by: a foreign government; a corporation chartered under the law of a foreign country or which has a non-US citizen as an officer or director or more than 20% of the capital stock of which is owned or voted by non-US citizens; a corporation chartered under the laws of the United States that is directly or indirectly controlled by a corporation more than 25% of whose capital stock is owned by non-US citizens or a foreign government or a corporation of which any officer or more than 25% of the directors are non-US citizens.'
34. It should be noted that screen quotas for the projection of cinematographic films are expressly mentioned by Art. IV GATT in that a Member may establish quantitative regulations in the form of a minimum screen quota for the exhibition of films of national origin.
35. The aforementioned percentages shall be calculated on the basis of the total number of hours of programme transmission on the activated channels of a system operator in its 'limitations on market access'.
36. Audiovisual and Media Policies, , (last visited 25 Jul. 2008).
37. With regard to services, an additional reason for the continued relevance of multilateral rules of origin is the existence of a list of MFN exceptions. Under GATS II. Which, in order to be applied, require a determination of origin or nationality.
38. Ivan Kinston, 'The Economics of Rules of Origin', in Rules of Origin in International Trade, eds Edwin Vermulst et al. (Michigan Press, 1994), 19.
39. Americo Beviglia Zampetti et al., 'Rules of Origin for Services: Economic and Legal Considerations', in The Origin of Goods: Rules of Origin in Regional Trade Agreements, eds Olivier Cadot et al. (Oxford: Oxford University Press, 2006), 118.
40. It is only under Mode 1 trade that services cross borders. In the case of Mode 3 and Mode 4 trade, suppliers cross borders rather than the actual services, and in the case of Mode 2 trade, it is consumers who cross-borders.
41. Zampetti et al., supra n. 47, at 118.
42. See also Carsten Fink et al., 'Rules of Origin in Services: A Case Study of Five ASEAN Countries', in GATS and the Regulation of International Trade in Services, eds Marion Panizzon et al. (Cambridge: Cambridge University Press, 2008), 111-142.
43. See Bernard Hoekman, 'Rules of Origin for Goods and Services: Conceptual Issues and Economic Considerations', Journal of W orld Trade 27, no. 4 (1993): 81-99.
44. Zampetti et al., supra n. 47, at 140.
45. Aly K. Abu-Akeel, ';Definition of Trade in Services under the GATS: Legal Implications', Geo. Wash. J. Int'l L. & Econ. 32(1999): 189-210.
46. Zampetti et al., supra n. 47, at 134.
47. Book 134.
48. Hoekman, supra n. 50, at 82.
49. Key criteria for rules of origin include, in particular: for Hong Kong companies to enjoy preferential treatment under CEPA, they must have had substantive business operations for three to five years in Hong Kong for the services intended to be provided in the mainland. They must have paid profit tax in Hong Kong; they must own premises for business operations in Hong Kong; and more than 30% of their employees must be Hong Kong residents. CEPA, available at .
50. To illustrate, before the CEPA was effective, television programmes broadcast by Mainland television stations during prime time (i.e., between 7 p.m. and 10 p.m.) were primarily Mainland domestically produced programmes. Only few imported productions and co-productions approved by the State Administration of Radio, Film, and Television (SARFT) could be broadcast during prime time. Under CEPA, there will be no cap on the maximum number of episodes for approved Mainland-Hong Kong 'domestically produced television programmes', and these programmes will no longer be subject to scheduling restrictions during prime time.
51. Vermulst, supra n. 46, at 19-20, 473-478.
52. Information Note by the Secretariat, Audiovisual Services, Job (05)/192 (19 Sep. 2005).
53. Apart from direct financial support, local investment, and hiring or production requirements may also be used as means of increasing investment in domestic production capacity. In particular, foreign producers setting up production facilities or distribution networks may be required to invest in certain local production/distribution companies, hire a certain proportion of local 'TV people', or have a minimum proportion of TV productions that must be produced locally for domestic distribution and consumption.
54. Although Art. 3.8 of the GATT exempts production subsidies from national treatment, subsidies like all measures are automatically subject to the national treatment principle under GATS. There is no counterpart of GATT 3.8 in the GATS.
55. Japan-Measures on Imports of Leather, adopted on 15 May 1984, BISD, 31S, at 94.
56. Japan-Measures on Imports of Leather, adopted on 15 May 1984, BISD, 31S at 96.
57. Chi Carmody, 'When "Cultural Identity was Not at Issue". Thinking About Canada - Certain Measures Concerning Periodicals', Law & Pol'y Int'l Bus 30, (1999). 231, 262.
58. Appellate Body Report, Canada - Certain Measures Concerning Periodicals, WT/DS31/AB/R. Panel Report, Canada - Certain Measures Concerning Periodicals, WT/DS31/R.
59. Panel Report, Canada - Certain Measures Concerning Periodicals, WT/DS31/R., at 3.143.
60. Panel Report, Canada - Certain Measures Concerning Periodicals, WT/DS31/R., at 3.67.
61. Appellate Body Report, supra n. 66, at 30.
62. First Submission of the United States of America, China - Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WT/DS/363 (13 May 2008). First Submission of the People's Republic of China, China - Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WT/DS/363 (13 May 2008).
63. For example, videocassettes, video compact discs (VCDs), and digital video discs (DVDs).
64. China-AVHE, First Submission of the United States, at 308-318.
65. For example, videocassettes, video compact discs (VCDs), and digital video discs (DVDs).
66. China-AVHE, First Submission of the United States, at 326-341.
67. It further argued that China modifies the conditions of competition through a variety of discriminatory requirements with respect to equity participation, operating terms, the existence of pre-establishment legal violations, examination and approval processes, and decision-making criteria.
68. International Herald Tribune, 3 Mar. 2008, (last visited 8 Jun. 2008).
69. UNESCO, Convention on the Protection and Promotion of the Diversity of Cultural Expressions, the General Conference of the United Nations Educational, Scientific and Cultural Organization, meeting in Paris from 3 to 12 Oct. 2005 at its 33rd session.
70. To date, panels and the Appellate Body have addressed the issue of 'likeness' in several GATS disputes. In ECBananas III and Canada-Autos, the panels accepted that the services and the service suppliers were 'like' without the extensive discussion that has taken place in the 'likeness' debate in the context of the GATT. In US-Gambling, the issue was left by the Panel and Appellate Body for the reason of so-called judicial economy.
71. Appellate Body Report, United States - Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R (7 Apr. 2005).
72. First Submission of Antigua, at 188.
73. Note by the WTO Secretariat, The Work Programme on Electronic Commerce (S/C/W/68).
74. The text of GATS does not provide guidance as to which criteria should be taken into account to determine like-ness. In addition, the limited GATS case law does not provide much clarification on the interpretation of likeness. To date, panels and the Appellate Body have addressed the issue of 'likeness' in the GATS in only two disputes (EC-Bananas III and Canada-Autos). In both disputes, the Panels accepted that foreign and domestic services and services suppliers were 'like', and reference was made to the nature and characteristics of the services at issue without justifying its decision in great details.
75. See generally Panagiotis Delimatsis, International Trade in Services and Domestic Regulations: Necessity, Transparency and Regulatory Diversity (Oxford: Oxford University Press, 2007).
76. Appellate Body Report, EC-Asbestos, para. 101.
77. Services Sectoral Classification List (MTN.GNS/W/120) S/CSS/W/21; S/CSS/M/9, para. 199; S/CSS/M/13, para. 213; S/CSS/M/10, para. 218.
78. Detailed structure and explanatory notes, CPC Prov. code 96132. Subclass: 96132 - Television services. Explanatory note, Explanatory note Production of television programmes whether live or on tape or other recording medium for subsequent broadcast. These programmes may be for entertainment, for promotion, education, training or news dissemination, including pictures or plays that are normally produced in television studios. Also included are productions such as sport events, weather forecast, interviews, and so forth. Exclusion: Transmission services for television programmes produced by others are classified in class 7524 (Program transmission services).
79. Directive 2007/65/EC amends the TVWFs Directive and renames it AVMSD. The amending directive entered into force on 19 Dec. 2007. Member States have two years to transpose the new provisions into national law, so that the modernized legal framework for audiovisual media services will be fully applicable by the end of 2009. AVMSD, available at:
80. The new rules, which have been called for especially by the European Parliament, are a response to technological developments and create a new level playing field in Europe for emerging audiovisual media services (video on-demand, mobile TV, audiovisual services on digital TV). The new Directive reaffirms the pillars of Europe's audiovisual model, which are cultural diversity, protection of minors, consumer protection, media pluralism, and the fight against racial and religious hatred. The Commission also proposes to ensure the independence of national media regulators.
81. However, the amended Directive explicitly states that it will not apply to online gambling, gaming or games of chance, or blogs. User-generated videos and private websites with no economic or mass media element are also excluded.
82. The Directive distinguishes between 'linear' services (e.g., scheduled broadcasting via traditional TV, the Internet, or mobile phones, which 'pushes' content to viewers), and 'non-linear' ones, such as on-demand films or news, which the viewer 'pulls' from a network.
83. The AVMSD offers a comprehensive legal framework that covers all audiovisual media services. The country of origin principle as it was established by the 'old' TWWF, of course, is maintained by the AVMSD to ensure that European works are in fact 'controlled' either by a Community 'producer' or by a co-producer established in a European third State to the Convention. The linear/non-linear or push/pull distinction ultimately depends upon who decides when a specific programme is transmitted and whether schedules exist. Linear services are those 'pushed' by broadcasters. Non-linear services are defined as 'any audiovisual media service where the user decides upon the moment in time when a specific programme is transmitted on the basis of a choice of content selected by the media service provider'.
84. The commission neither proposes European content thresholds, nor attempts to specify how non-linear services should provide access to European works.
85. The United States, the complaining party, claimed that China's measures, however, do not comply with these commitments. Some measures impose majority Chinese control over AVHE product distribution joint ventures and set high, discriminatory hurdles for those interested in launching such a venture. Other measures ban any foreign participation whatsoever in the electronic distribution of sound recordings within China.
86. US-Gambling (Panel), para. 6.281.
87. US-Gambling (Panel), para. 6.286.
88. Work Programme on Electronic Commerce, Progress Report to the General Council, adopted by the Council for the Trade in Services on 19 Jul. 1999, S/L/74, circulated 27 Jul. 1999, para. 4.
89. First Submission of the People's Republic of China, China - Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WT/DS/363 (13 May 2008), paras 447-574.
90. For example, television via cable (CPC 7530) or DTH satellite services does not appear to fall within the CPC categories relating to audiovisual services in the W/120 (i.e., within CPC 7524). Further, the sale of TV advertising time is not appropriately captured by the W/120 classification. In addition, although W/120 refers to the production of TV programmes (CPC 96132) and the transmission of TV signals (CPC 7524), the services of the programme and channel packagers are not adequately described.