Trade and Culture in International Law : Paths to (Re)Conciliation

The UNESCO Convention on cultural diversity marks a wilful separation between the issues of trade and culture on the international level. The present article explores this intensified institutional, policy- and decision-making disconnect and exposes its flaws and the considerable drawbacks it brings with it. These drawbacks, the article argues, become particularly pronounced in the digital media environment that has impacted upon both the conditions of trade with cultural products and services and upon the diversity of cultural expressions in local and global contexts. Criticising the strong and now increasingly meaningless path dependencies of the analogue age, the article sketches some possible ways to reconciling trade and culture, most of which lead back to the WTO, rather than to UNESCO.

Reconciling Trade and Culture : A Global Law Perspective

This article provides an overview of the most essential issues in the trade and culture discourse from a global law perspective. It looks into the intensified disconnect between trade and culture and exposes its flaws and the considerable drawbacks that it brings with it. It is argued that these drawbacks become especially pronounced in the digital media environment, which has strongly affected both the conditions of trade with cultural products and services and cultural diversity in local and global contexts. In this modified setting, there could have been a number of feasible ‘trade and culture’ solutions – i.e. regulatory designs that whilst enhancing trade liberalisation are also conducive to cultural policy. Yet, the realisation of any of these options becomes chimerical as the line between trade and culture matters is drawn in a clear and resolute manner. The article is meant for an interdisciplinary audience and forthcoming in the Journal of Arts Management, Law and Society.

The Trade Versus Culture Discourse: Tracing its Evolution in Global Law

The intensified flows of goods, services, peoples and ideas across borders intrinsic to globalization have had numerous and multi-faceted effects. Those affecting culture have been perhaps the most controversial, as it is more often than not difficult to identify the spill-overs across economic and non-economic areas and across borders, as it is equally hard to qualify the effects of these spill-overs as positive or negative. The debate also tends to be politically and even emotionally charged, which has so far not proven advantageous to establishing a genuine dialogue, nor to finding solutions. This contention and the divergent interests of major players in the international community have been reflected in the institutions and rules of global law. It is the objective of this chapter to explore this institutional architecture, in particular its main (and opposing) constituent fora of the World Trade Organization (WTO) and the United Nations Educational Social and Cultural Organization (UNESCO). The chapter traces the evolution of these institutions and their interaction over time, as well as the underlying objectives, demands and strategies of the key proponents in the trade versus culture discourse, which ultimately shaped the existent law and policy. The chapter concludes with an appraisal of the present state of affairs situating the discussion into the contemporary global governance landscape.

Can the World Trade Organization Ensure that International Food Aid is Genuine?

The Doha Round negotiation mandate proposes to minimise trade distortions and commercial displacement under the cover of international food aid, without preventing genuine food aid from reaching people in need. This paper presents problematic aspects of food aid for trade and competition, an overview of the international governance of food aid, and the present rules on food aid embodied in Article 10.4 of the WTO Agreement on Agriculture. The latest available Draft Modalities for Agriculture (December 2008) are seen as an only halfway successful implementation of the Doha mandate. A new text with better targeted disciplines and a political food aid commitment as part of the Doha Round Final Act are proposed in the conclusions.

An Enabling Regulatory Environment for Sustainable Investment: The Example of Trade Law

There is broad international agreement that investment flows to the agricultural sector in developing countries need to be increased. But there is also agreement that such investments need to be sustainable. For being sustainable, they must not only be beneficial to the public economy, but also to rural households and to the environment in the short and the long run. Whether sustainable investments take place, not least depends on the legal framework within which these investments are situated. This is true for the domestic legal frameworks of both the home country and of the host country of the investment. But also the international legal frameworks in which home and host states are embedded set either positive or negative incentives for investments to be sustainable. The paper presents an overview on regulatory frameworks which come to focus in this regard. It then elaborates on international agricultural trade regulation, by assuming that sustainable investments in agriculture presume a ‘sustainable trade regime’. By doing so, the paper presents parts of the debate about a sustainable agricultural trade regime, as it has been resumed and further developed by the author in recent years. Key words. Agricultural sector, sustainable investment, regulatory environment, sustainable trade regime.

Sustainable development in international law making and trade: International food governance and trade in agriculture

This timely book provides an accessible insight into how the concept of sustainable development can be made operational through its translation into legal terms. Understood as a multidimensional legal principle, sustainable development facilitates coherent international law making. Using this notion as an analytical lens on the WTO Agreement on Agriculture, the book considers the unresolved question of what a sustainable and coherent agricultural trade agreement could look like.

Trade Costs, Quality, and The Skill Premium

We develop a monopolistic competition model with nonhomothetic factor input bundles where increasing quality requires increasing use of skilled workers. As a result more skill abundant countries export higher quality, higher priced goods. Using a multicountry dataset we test and confirm the findings in Schott (2004) of a positive effect of skill abundance on unit values identified with US data. We extend the core model with per unit trade costs leading to the Washington-apples effect that goods shipped over larger distance are of higher quality. The combination of high-quality goods being relatively skill intensive with the Washington-apples effect implies that countries at a larger distance from their trading partners display a higher skill premium. Simulating our model we find that a doubling of distance of a country relative to all its trading partners raises the skill premium in a country by about 2.3 percent.

Calibrating a CGE model with NTBs that Incorporates Standard Models of Modern Trade Theory

We propose a way to incorporate NTBs for the four workhorse models of the modern trade literature in computable general equilibrium models (CGEs). CGE models feature intermediate linkages and thus allow us to study global value chains (GVCs). We show that the Ethier-Krugman monopolistic competition model, the Melitz firm heterogeneity model and the Eaton and Kortum model can be defined as an Armington model with generalized marginal costs, generalized trade costs and a demand externality. As already known in the literature in both the Ethier-Krugman model and the Melitz model generalized marginal costs are a function of the amount of factor input bundles. In the Melitz model generalized marginal costs are also a function of the price of the factor input bundles. Lower factor prices raise the number of firms that can enter the market profitably (extensive margin), reducing generalized marginal costs of a representative firm. For the same reason the Melitz model features a demand externality: in a larger market more firms can enter. We implement the different models in a CGE setting with multiple sectors, intermediate linkages, non-homothetic preferences and detailed data on trade costs. We find the largest welfare effects from trade cost reductions in the Melitz model. We also employ the Melitz model to mimic changes in Non tariff Barriers (NTBs) with a fixed cost-character by analysing the effect of changes in fixed trade costs. While we work here with a model calibrated to the GTAP database, the methods developed can also be applied to CGE models based on the WIOD database.

Strategic trade policy and non-linear subsidy : in the case of price competition

In a strategic trade policy, it is assumed, in this paper, that a government changes disbursement or levy method so that the reaction function of home firm approaches infinitely close to that of foreign firm. In the framework of Bertrand-Nash equilibrium, Eaton and Grossman[1986] showed that export tax is preferable to export subsidy. In this paper, it is shown that export subsidy is preferable to export tax in some cases in the framework of Bertrand-Nash equilibrium, considering the uncertainty in demand. Historically, many economists mentioned non-linear subsidy or tax. However, optimum solution of it has not yet been shown. The optimum solution is shown in this paper.

Competition of the mechanisms : how Chinese home appliance firms coped with default risk of trade credit?

During the transition period from a planned economy to a market economy in 1990s of China, there was a considerable accrual of deferred payment, and default due to inferior enforcement institutions. This is a very common phenomenon in the transition economies at that time. Interviews with home electronics appliance firms revealed that firms coped with this problem by adjusting their sales mechanisms (found four types), and the benefit of institutions was limited. A theoretical analysis claim that spot and integration are inferior to contracts, a contract with a rebate on volume and prepayment against an exclusive agent can realize the lowest cost and price. The empirical part showed that mechanisms converged into a mechanism with the rebate on volume an against exclusive agent and its price level is the lowest. The competition is the driving force of the convergence of mechanisms and improvement risk management capacity.