Acknowledging the dual nature of cultural goods and services: Ecuador’s cultural exemptions in trade agreements
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In recognizing the dual nature of cultural goods and services, Ecuador introduced a cultural exemption and some reservations in the Multi-Party Trade Agreement with the EU before joining it on 1 January 2017. While keeping with Ecuador’s commitments towards WTO, the audiovisual sector has been excluded from the trade agreement. Some restrictions to trade liberalization have also been formulated for the publishing and the performing arts sectors.
The use of cultural exemptions allows the preservation, for an unlimited period, of the right of Ecuador to intervene in favour of the diversity of cultural expressions, even in a context of an opening of the markets to competition. Ecuador is therefore free to adopt and implement public policies for the promotion and protection of its audiovisual, publishing and performing arts sectors.
The formulation of reservations also aims at “preserving sufficient leeway in favour of culture”, but “every policy or measure likely to affect free trade of cultural goods and services must be included in a list of exclusions provided to that effect”. For instance, in order to safeguard the regulation capacity of the publishing industry, Ecuador has included a horizontal restriction under which it reserves the right to give the EU the same treatment granted by the EU in the publishing sector to Ecuadorian nationals. Quotas have also been included and require impresarios contracting foreign artists, musical ensembles or orchestras to present national artists as part of the same show, with such artists to make up 60% of the artistic performance.
Through the inclusion of cultural exemption and restrictions in the Multi-Party Trade Agreement with the EU, Ecuador promotes the objectives and principles of the Convention, and directly contributes to the implementation of Goal 2. While reaffirming its sovereign right to adopt appropriate policies and measures for the protection and promotion of the diversity of cultural expressions, the country ensures a diverse flow cultural goods, services and activities around the world. Ecuador also commits to sustainable development by enhancing the overall coherence of its trade policy (SDG Target 17.14).
The constitutional and legal provisions governing the service sector in Ecuador preserve the ability to regulate the areas of public policy to promote cultural industries. At the same time, it should be noted that Ecuador has made commitments to the WTO in the sector of "recreational, cultural and sports ', which include the following services: Entertainment, libraries, archives, museums, sports and other recreational services, for modes: 1 (cross border trade), 2 (consumption abroad) and 3 (commercial presence). Regarding to mode 4 (temporary entry of natural persons), Ecuador did not acquire any commitments and is free to apply restrictions to market access and national treatment to protect this sector locally.
In the case of the Multi-Party Trade Agreement with the European Union, Ecuador maintained the commitments made in the WTO for modes 1, 2 and 3. Regarding to cross border trade (modes 1 and 2), in order to safeguard the regulation capacity of the publishing industry, Ecuador has included a horizontal restriction under which it reserves the right to give the EU the same treatment granted by the EU in the publishing sector to Ecuadorian nationals. Concerning mode 3, although commitments are made in entertainment services, it is conditioned that, in the case of contracting foreign artists, musical ensembles or orchestras, they must jointly present in the same spectacle, national artists, in a proportion of 60% of the total artistic program.
In terms of audiovisual services, Ecuador did not acquire any commitments in this sector and is therefore free to adopt public policies for the promotion and protection of audiovisuals. These are included in the List of exemptions of Article II, referring to "Most Favored Nation", which would allow the country, for example, to grant more favorable treatment to certain countries which Ecuador have agreements with. Audiovisual services were not part of the MCA's negotiation with the European Union.
Some of the restrictions that Ecuador reserved the right to apply establish, for example, that any employer with a staff of more than 10 employees should employ Ecuadorians of no less than 90 percent of the ordinary workers and not less than 80 percent of qualified or specialized employees, administrative staff or people holding positions of responsibility.
On the other hand, it is pointed out that Ecuador has not developed a system of preferential treatment so that the population can access cultural events through bonuses or other benefits.