Cultural Content and the proposed Australia/US Free Trade Agreement

Adjournment Speech
SENATE
13 May 2004 (9.20 p.m.)

I rise in the chamber this evening to highlight some major concerns relating to the Cultural Sector and the Australia - United States Free Trade Agreement.

Labor argued strongly for an exclusion clause for the cultural/audiovisual sector in the lead up negotiations to the Free Trade Agreement, similar to that obtained by the Australian Government when it negotiated with Singapore.

In November 2003 the Labor party called for the Howard government to ensure that the cultural sector was excluded from the AUSFTA, as was obtained in the Singapore Australia FTA.

The former Labor Leader Simon Crean told delegates from the Screen Producers Association of Australia that;

Our cultural identity is unique and defines who we are as a nation. Labor is not prepared to sit by and see it used as a cheap bargaining chip. Labor demands an exclusion clause for all present and future cultural content in any Free Trade Agreement with the United States. This would be consistent with the Free Trade Agreement recently negotiated with Singapore. (Simon Crean, Melbourne 21 November 2003)

This position attracted wide spread support from the sector, and had the support from members of the Australian Coalition for Cultural Diversity – ACCD and the Media Entertainment and Arts Alliance.

We know that the ACCD had been involved in a series of consultations with the DFAT negotiators throughout the course of the negotiations, and felt quite assured by negotiators that their concerns were being taken seriously. They were assured that Australian Government was not prepared to trade away the cultural sector.

This faith was severely rattled after it was reported during President Bush’s visit in late 2003, that the Prime Minister had told the President that Australia was willing to be “flexible” on new media (which has since been defined as Interactive Audio/Video). This sent the industry into a spin, and went against everything that had been told to them by the negotiators, and indeed the reported statements from ministers Vaile and Kemp early in 2003.

The Prime Minister’s intervention was the first sign that the Howard Government was either unwilling or unable to obtain an exclusion for the cultural sector, similar to that obtained under the Singapore FTA.

Over the next few months, the Howard government’s ambiguity grew.

Once the announcement came that a deal had been struck, the Howard government then embarked on a shameless propaganda campaign; By implying that they had secured a broad reservation (clearly designed to keep industry on side and their important ‘first impressions’ media statements positive), it was with dismay that the industry discovered that the Howard Government had only achieved retention of limited reservations.

Despite this misleading propaganda, as the full text of this agreement emerged in, it became clear the Howard Government had accepted a position that looked nothing like the broader exclusion the sector were led to expect.

The Australian announcement stated:

‘Australia has successfully negotiated a reservation to the services chapter that ensures the Government’s capacity to regulate for Australian content so that it remains available to Australian consumers.’ (Department of Foreign Affairs and Trade, www.dfat.gov.au )

The Americans however told a different story, stating on 9 February 2004 that the United States Government had gained

‘unprecedented provisions to improve market access for U.S films and television’.

After comparing the statements from the Australian Government with the statements released from the United States Government, it became apparent that you could have driven a truck through the middle of the two positions.

Under Senate Estimates questioning just over a week after the initial announcement on 17 February, Government Cultural Agencies remained unable to assess what impact Australia –United States Free Trade Agreement (AUSFTA) was likely to have on the audiovisual sector. It appeared that very little consultation between government agencies and the negotiators had occurred.

In fact three separate agencies - the Australian Broadcasting Corporation (ABC), the Australian Film Commission, and the Australia Council for the Arts - were unable to provide any detailed information about what the AUSFTA meant for their respective organisations.

The Howard Government continued to claim that it had fully retained Australia’s ability to regulate for the future delivery of what it now described new media as: ‘interactive audio/ video’. But the key concerns of the sector remain, namely retaining the right to regulate new media, and increase existing media local content quotas.

As the text of the agreement finally became available, the main areas of grave concern reside with the following;

That any bid to increase caps, particularly in the Pay TV environment must firstly involve consultations with any ‘affected’ parties. There is much concern that these ‘affected’ parties may include organisations such as the Motion Picture Association of America (MPAA), who have already stated objections to any attempts to make the Australian arrangements ‘more restrictive.’

That Local content in the digital Multichannel environment would be limited to a maximum of 3 channels – regardless of how many channels may exist in the future.

While this capping may appear reasonable in the context of non-existent multichannelling in the current digital environment, it is short sighted, and does not allow for a reasonable proportion of local content in the future.

For instance, if there was ability for one network to carry up to 15 channels, then a maximum of only 3 channels would ever contain local content.

On Subscription services (Pay TV) expenditures on Australian adult drama will be set at 10% and capped at 20% (providing attempts to increase quotas from 10% to 20% has allowed for consultation with ‘affected’ parties to occur) and children’s, documentary, arts and education channels at 10%.

According to the Screen Producers Association (SPAA), at this level, the Pay TV caps on expenditure for local content, would in fact be amongst the lowest in the developed world. It is important to note that even under current quotas on Subscription services (Pay TV) which are capped at 10% only translates to about 3.8% of local content programming. So even if caps were raised to 20% this effectively only equates to around 6.4% of actual local programming seen on Drama channels.

Interactive Audio and/or Video – ‘New Media’. The actual text of the agreement says very little about how this will be handled. The DFAT backgrounder states:

Interactive audio and/or video services:

Measures can be imposed to ensure that Australian content on such services is not unreasonably denied to Australian consumers, upon a finding by the Australian Government that Australian content is not readily available to consumers through such services.

Any measures adopted will be implemented through a transparent process, be based on objective criteria, be the minimum necessary, be no more trade restrictive than necessary, and be applied only to enterprises carrying on a business in Australia.

Clearly this is little detail about what interactive and/or video includes and even less detail about the processes involved in getting agreement to incorporate new media.

I thought it relevant to ask the Minister and the Department of Communications, Information Technology and the Arts how the Department defined ‘new media’.

Estimates Hansard from November 2003 will show, that neither the Minister for the Arts – OR the Department could answer this question – and consequently took it on notice.

Wouldn’t you think that after nearly 12 months of negotiation surrounding the audiovisual sector – of which ‘new media’ appeared to be sticking point that the Minister and his Department would have some idea about what they were prepared to simply trade away??

For the record – the response which I received to the question on notice was this:

While there is no single definition of this term, that provided by the Chief Executive Officer of the Australian Film Commission, Mr Kim Dalton, in his evidence to the committee, provides a useful explanation:

‘When we talk about new media we are referring to those new systems of production, distribution and delivery which are on us now or are in the process of being developed or conceptualised – those that exist in the digital domain which, for the most part, have interactive potential and at times may well look like traditional television services but have greater potential, for instance, in terms of interactivity or multichannelling and which may also exist in a broadband Internet environment, which would also allow for the possibility, increasingly these days, for the delivery of quite high-resolution moving images and also interactive potential.’ (Q 225 - Australian Film Commission, Answer to QON November 3&4 2003.)

Labor is determined to find out exactly what the AUSFTA means for the future ability of Australia to gain access to and produce ‘interactive audio and/or video, and shall pursue this through the Senate Select Committee.

Finally another concerning aspect of the deal struck with the United States is the 55% cap on local content for free to air television being subject (as is the whole of Annex 1) to a ‘ratchet’ clause, meaning any downward movement in the quotas would be irreversible regardless of the cap.

To sum up, the overall outcome of the deal struck between the Howard Government and the United States has been left with an overwhelming feeling of uncertainty about the future impact on the broadcasting and film and television sector now and in the future.

Many in the industry have commented that it is not the next couple of years that full impact of the AUSFTA will be most notable - but over the next 5-10 years as technology emerges, the gap between local content actually shown on all formats and overall broadcast time in Australia will get far wider.

It is important to note, that in the Australian Film and Television industry, production of Australian Feature Films has plunged by one-third, down from 30 to 19 in 2002-2003 and that expenditure on feature film and drama production is also down by 23% to $513 million in a period of just 12 months.

It is because of this downturn and rising unemployment in the production sector that the AUSFTA is causing even greater concern for film and television stakeholders.

Ultimately local content quotas across free-to-air and Pay TV Quotas serve to ensure investment in Australian Feature film and television production.

This continued investment is critical to ensuring that Australian voices and faces are both heard and seen on Australian screens.

The tricky spin emanating from the Howard Government has worked hard to distort any impartial analyses about exactly what AUSFTA means for the Film and Television sector and indeed the broader cultural community.

Rumours are rife about organisations getting heavied by the Government to make favourable comment or to say nothing.

Let it not be forgotten that this uncertainty is a direct result of the Howard Government’s failure to obtain a broad reservation for the cultural sector and consequently, many important mechanisms which are essential to ensuring the growth of Australian film and television are to be restricted under the proposed Agreement.

The Labor Party is seeking to clarify all of these issues raised through the Senate Select Committee on the Australian United States Free Trade Agreement.

This committee provides THE ONLY opportunity for the Australian people to delve into the detail and assess its impact.

It is important to note that Labor is not opposed to Free Trade, but we have reserved making a decision on whether we will support the Australia-United States Free Trade Agreement until after the Senate Select Committee reports on 12th August this year.

The recommendations arising from this report will shape Labor’s position on AUSFTA and whether we will support changes to existing legislation required to implement the agreement.

The Howard Government has not yet indicated when they propose to introduce these legislative changes.

There is no doubt however about the trickiness the Howard Government has employed to get this deal signed.

What remains to be seen is just how much has been deliberately withheld from the Australian people about the perceived ‘benefit’ to our nation.

Slightly removed from previously discussed issues but of much importance is the extension of Copyright from 50 to 70 years. While Labor has not expressed an opinion on this in terms of the cultural sector, it is important that we delve into the issues for Libraries and educational bodies.

The extension which the AUSFTA for which copyright payments must be made from 50 years after the death of the author to 70 years, in line with US law (article 17.4), is going to be costly for libraries and educational bodies, as Australia has adopted the US copyright standard without the US’s more generous rules for copying for research and education purposes.

The Australian Fair Trade and Investment Network Ltd (AFTINET) had some particularly interesting comments which could be investigated further;

“Copyright law is supposed to provide a balance between fair rewards for authors and excessive protection which raises prices. The Australian Intellectual Property and Competition Review Committee recommended that copyright not be extended without a public inquiry. The USFTA denies us this public debate.”