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Chapter 12 Between Cooperation and Conflict International Trade in Cultural Goods and Services J. P. Singh The Famous French Historian Ferdinand Braudel perhaps optimistically overestimated the effects of intercultural exchange by noting the following:“No civilization can survive without mobility: all are enriched by trade and the stimulating impact of strangers” (Braudel 1963/1993, 10). In terms of trade, as this chapter will show, such exchanges feature both stimulation and conflicts.These exchanges are especially the case with the continually rising trade in cultural goods and services, collectively referred to as cultural products here. Cultural goods usually refer to tangible commodities such as films, audio-recordings, books, periodicals, and art objects. Cultural services include such intangibles as tourism,live performances,downloading of digitized content over the Internet, and royalties and license fees obtained from intellectual property. While estimates vary, the United Nations Educational, Scientific and Cultural Organization (UNESCO) reported in 2005 that cultural and creative industries accounted for 7 percent of the gross domestic product worldwide at $1.3 trillion in 2002 and expected it to rise to $1.7 trillion by 2007. Cultural goods (not services) accounted for less than 1 percent of total international trade, but their volume rose from $39.3 billion in 1994 to $59.2 billion in 2002 (UNESCO 2005).1 International tourism yielded $623 billion, with 763 million visitors in 2004 compared to $440 billion and 441 million in 1990 respectively (WorldTourism Organization 2005).TheWorldTrade Organization calculates that travel services in general account for nearly 30 percent of the total world trade in commercial services (WorldTrade Organization 2004, 160). This chapter traces the context, controversies, and coordination mechanisms that underlie trade in cultural goods and services. It also traces the growth of cultural trade in the rise of the cultural industries, expansion of information 177 Chap-12.qxd 2/25/08 4:24 PM Page 177 networks, and the formation and liberalization of international rules governing trade in cultural sectors, and notes the role of the World Trade Organization (1995–present) and its predecessor, the General Agreement onTariffs andTrade (1947–1994), along with that of UNESCO, in facilitating cultural trade.The defining case for understanding such cultural trade remains the audio-visual dispute (1991–1993) at the General Agreement on Tariffs and Trade and subsequent framing of the Universal Convention on Protection and Promotion of Cultural Expressions at UNESCO from 2001–2005. Links between Culture and Commerce Economics presents trade purely in terms of an exchange of goods and services and through that exchange its effects on the standards of living for people . However, religious, political, moral, and other sociocultural considerations have always been important in elevating or diminishing trade. One way of understanding these cultural considerations is to make explicit how trade is linked to everyday life and the cultural identity of people. Trade is a natural component of human interactions. A few Greek and Roman writers “believed that God created the sea to promote interaction and to facilitate commerce between the various peoples of the earth” (Irwin 1996, 11). The modern liberal belief that interaction and exchange underlie prosperity and peace can be traced back to such ideas. Adam Smith’s notion of division of labor laid the basis of prosperity through trade inasmuch he opined that gains from economic exchange accrue to those who specialize in producing things for which they are most suited.These late-eighteenth-century ideas formed the basis of doctrines of comparative advantage in trade in the nineteenth century. Similarly, political theorists had begun to argue that as nations exchanged goods, they would be less likely to go to war with each other.This pacific hope is best captured in French writer Frederick Bestiat’s words that “if trade does not cross frontiers, armies will.” But the case against trade is also made in economic and cultural terms. The economic rationale against trade rests on the thesis that economic specialization can make some nations too dependent on others or can result in an unequal exchange where one benefits at the cost of another. Cultural arguments against trade are many; the earliest ones were moral and philosophical. To the Greeks we owe the term “xenophobia,” or fear and dislike of foreigners . Christianity in general decried the profit motive that underlies commerce and trade. It was not until the modern era that such cultural notions regarding trade were questioned, but these arguments continue to be made.Trade wars are often portrayed in negative terms—Hollywood’s cultural imperialism is...

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