During the final negotiations of the Uruguay Round, some countries expressed concern that enforcement of the GATT principles - in particular MFN and national treatment rules – on goods and services as well as on copyright protected products would undermine their cultural specificity (and unique status), in favour of their commercial aspects. Indeed, quite often cultural industries, ( film and audiovisual ones in particular) survive due to import restrictions and other support mechanisms facilitated by certain public administrations, which consider it a priority to preserve domestic cultural industries. If subject only to commercial considerations, many local cultural industries would be quickly replaced by those with greater financial muscle due to their multinational presence and monopoly position. Negotiators felt mechanisms were needed to maintain and develop a viable degree of domestic production to reflect local cultural forms of expression and avoid the standardization of tastes and behaviour.
After heated debates, these concerns were addressed in the Uruguay Round’s concluding negotiations, which did not insist on applying all the GATT rules to film and audiovisual goods and services. Since then, this tacit understanding has been known as the "cultural exception". As a doctrine, (it does not have any legal status, nor does it exist as such in any agreement or treaty), the ‘cultural exception’ is based on the principle that culture is not like any other merchandise because it goes beyond the commercial: cultural goods and services convey ideas, values and ways of life which reflect a the plural identities of a country and the creative diversity of its citizens.
A few years later, in 1999, and following the recommendations of the Intergovernmental Conference on Cultural Policies for Development held in Stockholm in 1998, UNESCO brought together a group of experts to discuss the issue Culture: A Form Of Merchandise Like No Other?The conclusions of this symposium were inspired in the shared understanding that "culture was not only a matter for the economy or an economic concept".
While the French were probably the first to introduce the concept of the "cultural exception", the principle underlying this doctrine was evoked by the USA in the early 1950s when it adhered to the first multilateral treaty of cultural goods: the Florence Agreement.