Music exports and trade in creative goods/services
Earlier identifications of the creative industries as a success story in international trade (Flew, 2012, pp. 125-132) are borne out by recent statistics, with the global market for creative goods “more than doubling in size from S208 billion in 2002 to $509 billion in 2015” (UNCTAD, 2018, p. 10). The list of leading western creative exporters has remained relatively stable, with the United States, France, Italy, United Kingdom, Germany, Switzerland, Netherlands, Poland, Belgium and Japan comprising the top ten exporters (ibid., p. 9). The report noted the “exceptional” performance of China with annual growth rates in the creative sector of 14% (ibid., pp. 10-11). Large discrepancies remain between “developed” and "developing” countries in export performance (and results are skewed due to both China’s “exceptional” performance and its definition within the report as a “developing” export nation) (ibid., p. 20). Among the usual factors determining trade volumes (the price of goods, types of productivity, etc), “cultural differences” (comprising wider cultural histories of engagement and influence) should be considered, although in the case of music, digital streaming and copyright mechanisms increasingly complicate trading patterns (Takara, 2018).
While cultural exports can constitute goods (e.g. songs, television programs, films) and services (e.g. library, copyright, licensing, promotional and other distribution activities), a significant proportion of music exports exist within rights: The bundle of royalty payments derived from performance, composition, synchronisation of live and recorded works allowing various parties the rights to exploit particular works. This shift is capuired in 2016 data where the decline of recorded music (by 27%) was matched by what UNESCO labelled the “dematerialisation” of cultural goods, and the move “into the realm of culmral services, often sold as web-based subscriptions”.
Figure 1.1 is useful for our later examination of music export nation case studies. While the United States might enjoy significant exporter status across audiovisual goods (film, music, games), the table is a reminder of the substantial amount of creative goods it imports. Four of the nations on the top ten list include our music export case studies—France, Australia, Canada and the UK—who are mainly deficit countries. While the US is seeking to address its creative goods deficit through intellectual property reform, primarily through the reformation of free trade agreements eliminating cultural protectionisms (e.g. Rimmer, 2006; Gagne, 2016), countries such as the UK and Canada have shown consistent interest in developing export programmes and policies to improve creative trade balances. Specific data on music (nor the performing arts) is not presented in the UNCTAD
Figure 1.1 Creative goods top ten trade surplus and deficit countries in 2015 (in billions of $). Source: UNCTAD, 2018, p. 25.
2018 report; an earlier Creative Economy Report (UNCTAD, 2010, p. 143), which emphasised the “missing links” of key national data (that can incorporate performance and copyright data and intra-firm transactions), perhaps explains this absence in the 2018 findings.
Collectively, Europe remains a dominant creative industries exporter: From 2012 to 2017, the European Union’s cultural trade surplus rose from €6.3b to 8.6b, increasing at a slightly faster rate than imports (European Commission, 2019, p. 106). Music exports are included in two categories: “Recorded media” (€7.3m) and “musical instruments”2 (€2.2m) of an estimated €28.076m within the cultural goods export sector (European Commission, 2019, p. 115). An earlier UNCTAD report in 2008 valued music exports at almost $ 15b, with Europe accounting for 75% of activity (UNCTAD. 2008, p. 5). Since statistics have come to be reliably collated, there has been a pattern of western dominance, complicated by “the fact that major exporters are also major importers” (Towse, 2009, p. 413).
The global frameworks organising cultural trade—such as the General Agreement on Tariffs and Trade (GATT), the World Trade Organization (WTO) and the Multilateral Agreement on Investment within the Organization for Economic Cooperation and Development (OECD)—raise complex issues in measuring value. Given its symbolic qualities, carrying with it other embodiments of national identity and place-bound innovation, the cultural export has been the subject of fierce debate against the usual arguments for free movement of goods and services. Music has been central to “cultural exception” arguments made by some nations seeking protection for the local culmral product (film, television, music, radio industries). Here, “culmre is the misfit, a hindrance to the achievement of an otherwise perfect uniformity in the world trading system” (Throsby, 2000, p. 133). This has led to nations constructing mechanisms (primarily local content quotas governing radio airplay, television and film content) to ensure a level of local visibility/audibility, working with funding structures designed to boost local production. Those interested in a “pure” free market see the “dangers accompanying promotion of a culture of dependency and deviations from profit- maximizing behaviour among local producers” (Doyle, 2011, p. 279).
The history of economic arguments about culmral protectionism versus open culmral markets in part rests on distinctions made between the benefits for consumers or industries:
If trade is voluntary, the argument for economic liberalization is persuasive, but what is the right amount? Economists often support free trade based on the first welfare theorem, but that argument is inapplicable because of the cost conditions and informational problems faced by the culmral industries. There is no scarcity of applicable models, each with different policy implications that could be applied, but economists cannot effectively distinguish empirically among them. As a result, the case for openness rests on a time-tested theme - open borders counter the adverse effects of concentrated production at home, provide alternative interpretations of events and possibilities, increase choice for consumers, and stimulate business, professional and artistic creativity and performance - rather than on a particular model of imperfect competition.
(Acheson, 2011, p. 227)
This is apparent through the contradictions of global culmral trade frameworks in practice, with culmral exceptions at odds with liberalisation. More importantly, the “case law ... has demonstrated that the measures available to protectionist Members do not appear to be convinced ... that culmral goods and services are to be considered not only in terms of economic goals but non-economic goals” (Schere, 2017, p. 573). This had led some member states to see UNESCO agencies as a more viable source for resolution than the WTO (ibid., p. 574). Others regard trading blocs such as the EU operating thr ough historical codes of conduct, with culmral policy buttressed by “soft law instruments” containing “non-enforceable recommendations and incentives” (Dewey, 2010, p. 115). It is appropriate, then, to turn to the mix of “instruments” (laws, regulations, policies and frameworks) that are evident at national levels in shaping music export activity.