Chapter 33 Culture in International Trade Cultural allegiances whether inherited imposed or chosen affect economic activity. Many of these cultural layers – ethnic background religion language ideological orientation and artistic interests – spill over national boundaries. Cultural ideas travel the world along many routes from the Silk Road to modern electronic networks. Historically peripatetic artists composers and writers have responded to shifting patronage and market opportunities. More recently firms in the cultural industries develop and produce content and distribute it as widely as the market will bear. Visual and performing arts and the cultural industries have both common and distinct international economic dimensions. In trade agreements countries voluntarily limit their policy options in return for restrictions on the choices of the other member countries. Arguments for protection versus openness for cultural activities are more complex and nuanced than for other economic sectors because of a wide range of views on how international cultural policy affects individuals and the national culture. The inclusion of GATS and TRIPS in the WTO made the WTO a more important influence on international cultural policy than its GATT predecessor. UNESCO continues to play a complementary role. The Florence agreement (1950) encourages the free flow of cultural products and a convention addresses illicit trade in cultural property a heritage issue. Currently UNESCO is the focus of efforts to create a rules based convention to protect and promote the diversity of cultural expressions which is designed to either separate international cultural policy governance from the WTO or strengthen the bargaining position of cultural industry interests in WTO negotiations. These discussions take place in circumstances where there are serious shortcomings in the measurement of trade in cultural goods and services.