Preferential Treatment for 'European Film' is Not a Valid Policy Goal

One of the heavily negotiated issues between the US and the EU, during the Uruguay Round of the WTO, was the "cultural exception" for "European films". The EU insisted that the concentration of film production in the US combined with globalisation meant that the EU would otherwise be subsumed by US culture. As is discussed in this paper, Art house movies are not made under normal market forces, which favour large mainstream productions. At the same time such productions are important for democratic societies, as they are expressions of local communities and can act as means of creating cultural understanding. However, it is argued that, due to the definition of "European film" being based on the origin of production money rather than cultural content, commercial interests are protected rather than cultural diversity. Therefore, it is recommended that states should promote co-production with US producers of independent films rather than discriminating against US film in general. Additionally, states should subsidise the distributors of and theatres showing foreign art house movies