There has been quite a bit of press about the US EU free trade negotiations.  The major news is that the French government has been posturing on “cultural” industries.

Matthew Yglesias has a much more sober take on the issue.

One interesting parallel is the proposed Multilateral Agreement on Investment (MAI) that failed in 1998.  One potential reason for the collapse of the this OECD investment agreement were issues related to cultural industries.  This ranged from French movies to Canadian radio quotas.

While cultural heritiage probably had some hand in torpeodoing this agreement, the failure was overdetermined.  In the book, Fighting the Wrong Enemy, Edward Graham argues that there was very tepid support for the MAI from the business community, limited interest from politicians, and outright hostility from civil society.  Protestors claimed victory when it failed while others blamed the hundreds of pages of cultural exceptions for killing the agreement.  But these seem like self-serving explanations.

Back to the US-EU agreement.  Why is there so much postering over cultural issues?  Most of these issues aren’t really even covered in the proposed US-EU pact.  One guess is that the the French government can claim victory by excluding cultural industries that probably weren’t going to be included in the agreement in the first place.  Other countires, like the US, probably would like to see French concessions in other policy areas, so allowing them a polical victory is a good way to hammer out an agreement.

To be honest, I’m making a lot of guessing on what is going on in this specific agreement, but MAI might provide some guidance on the role of cultural industries in trade and investment agreements.