Memo April 2007


A memo sent to correspondents, friends and acquaintances of the Budapest Observatory (BO) in April 2007

BO memo dimensions allow for one subject this time: culture in world trade.

In Essen in April
The European Conference on Cultural Diversity was held in Essen under the aegis of the German presidency. 57 states have already ratified the relevant Unesco convention. By this, this Magna Charta of international cultural policies - as was repeatedly labelled - has entered into force, at the same time becoming part of the acquis of the European Union.

Forza Europa!
Although the convention is more axed to north and south than to the two sides of the Atlantic, the Europe-America relationship attracted considerable attention at the meeting. BO reinforced this in a panel discussion, by recalling the strong language by Peter Sloterdijk in the essay that was the springboard for a panel discussion. The German philosopher spoke about "cultural kidnapping", about American mass culture "occupying the souls of foreign people" - as religious missionaries used to do.

Cultural identity ressentiment remained the prevailing mood. Certainly, without elevated morale there are no chances to win. However, warfare tactics and weapons are also needed: the conference nevertheless produced limited legal, political and commercial devices.

Montreal monitors
Speaking about next steps, in her speech Françoise Rivière, the cultural deputy of the director general of Unesco, pointed at the statisticians of the organisation, who will monitor the implementation of the convention. BO thirst for facts and figures followed this guidance and downloaded the latest report on culture in world trade, issued in 2005 by the Montreal based statistical institute of Unesco.

The data in the report at first (or even second) reading are at odds with stereotypes.

See two conflicting statements at the outset: "Cultural and creative industries alone are estimated to account for over 7% of the world's Gross Domestic Product"; and "core cultural goods (anything that one would conventionally consider as ‘culture' - a BO comment) represented approximately 1% of the total trade in 2002. This percentage has remained the same during the last ten years. These figures might seem surprising in light of the perceived growing importance of cultural industries in the world economy".  

Who is the cultural giant?
Who dominates the cultural markets of the world? Don't be quick, you'll lose the bet. In 2002 the United Kingdom sold more culture than the USA did; the European Union (EU15) was the main exporter of cultural goods, with 51.8% of all reporting countries. 

And who buys the most? In more pretentious language: which country is the most open (curious? inclusive?) with regard to cultural goods and services from the rest of the world? Grab your chair: the United States is. In fact, the American deficit in cultural trade is over 100%: see the table at bottom.

Wrong clues
The many tables in the Montreal report contain some of the clues to the dilemma: how can trade statistics as well as feelings about American cultural hegemony be both true at the same time.

Maybe in the copyright market? Not really. What European copyright management societies collected in 2002 in royalties represented 57% of the world's total, while North America obtained 25% (although it is widely held that extending the term from 50 to 70 years mainly serves American interests).

Perhaps in visual culture? Come on: Americans are the big buyers, with 42,0% of the world trade of pictures, statues, handicrafts and the like, while selling 7,5% only. For BO it is a mystery that these visual commodities represent a larger share in international trade than audiovisual goods (cca 20% against 15%).

Right clues
In 2002 the USA was top exporter in books, periodicals and recorded music. What about films? Paradoxically, they hardly appear in the statistics of international trade, as the copies for the cinemas are produced locally.

For the real impact BO takes you from Montreal to Strasbourg. The latest relevant report from the European Audiovisual Observatory dates from November 2005. Slide 12 of this powerpoint presentation shows that 59,4% of film admissions (viewers) in the European Union (EU25) in 2004 were for American films, and in additional 11,2% there was an American share in European films viewed. French films came second with 9,4% (plus some more among the 11,2% European-American co-productions). Here we are: all top ten films by number of viewers (in Europe, in 2004) were fully or partly made by Americans - slide 13.

State aid for films
How does Europe fare in the competition for cinema-goers? In fact, it is for film shooters that competition has lately been waged. Tax incentives and other fiscal assistance focused on attracting large budget films (guess, from where), which is at odds with the "European cultural exception": Article 87(3)(d) of the EC treaty. This analysis shows how two member countries changed their rules to look more cultural than merely economic. The UK has put greater emphasis on Britishness. The Germans are more generous: besides German context, European relevance or strengthening cultural heritage in the general sense, all entitle to public support.

Both countries, however, exercise the territorial clause.

Bitter truth
Poor countries, in principle the main beneficiaries of the Unesco convention, are hardly visible in the statistics above.

Sloterdijk in his essay reminds us that there are only about 1,5 billion people in the "highly networked affluence greenhouse". True. In spite of the latest estimate of 2,5 billion cellular connections (mobile phones) in the world. Statistics are embarrassing in this context, too.

Top five countries by share from the world trade of core cultural goods in 2002

UK 14,4%
USA 12,8%
Germany 9,8%
China 9,0%
France 4,2%
USA 25,8%
UK 13,3%
Germany 7,1%
Canada 6,4%
France 5,7%
Source: International Flows of Selected Cultural Goods and Services, 1994-2003, Defining and capturing the flows of global cultural trade, UNESCO Institute for Statistics, UNESCO Sector for Culture, UNESCO Institute for Statistics, Montreal, 2005