EU in last-minute push to convince France to back EU-US trade talks

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The European Union will try to find the right 'language' to overcome French resistance to free-trade talks with the United States today (14 June) and keep alive plans for a deal that could boost their struggling economies by dramatically increasing transatlantic business.

Paris, which is trying to shield French-language culture from the global might of Hollywood, has refused to join the 26 other EU governments that want talks to start in July, unless movies and digital media are left out of any deal.

EU trade ministers must resolve the issue when they meet in Luxembourg. They need French agreement not just because it is Europe's second largest economy, but because under EU rules, trade deals touching on cultural issues need unanimous support.

"We need to work this out. It's about finding language that people would be satisfied with," said Richard Bruton, Ireland's minister responsible for trade, who will chair Friday's talks.

Free-trade advocates Germany and Britain say it is vital that Europe push ahead with what would be the world's biggest trade agreement, because of the economic benefits it could bring, especially when much of western Europe is in recession.

Together the United States and EU account for half of global economic output and a third of all trade.

The European Commission is ready to give member states a much greater say on cultural issues in the talks with Washington, an EU source said on Thursday.

EU Trade Commissioner Karel De Gucht will propose at Friday's meeting that the trade ministers be consulted before the Commission negotiates on audio-visual services, said the source.

First considered three decades ago but knocked down by France in the 1990s, the idea of an EU-US free-trade deal has gathered momentum since last year because the United States is also achieving only modest economic growth, while China's rise is another incentive to deepen Western integration.

In a joint statement, ahead of the meeting, UK and Spanish Trade Ministers said UK and Spanish Trade Ministers said that negotiations will be difficult as particular sensitivities will arise.

"Both sides may fear the other is more competitive in certain areas while specific interests will demand protection for their own niche areas But that fear should not prevent us from talking about all relevant issues and sectors; even those most sensitive to us," they added.

"For the greater good, we will need to push our particular interests to the background. It is at times of change when we need to show our strong commitment to move ahead," they said.

A deal would essentially shape the future global trading system, something that raises concern in Beijing.

Trade discussions at the G8

Following mutual gestures of goodwill, such as lifting bans on some of each other's meat imports, European leaders and US President Barack Obama will use a summit of the G8 countries next week to mark the opening of negotiations – provided the ministers reach agreement in Luxembourg.

A trade deal, called the Transatlantic Trade and Investment Partnership (TTIP), could boost the EU economy by €119 billion per year, and the US economy by €95 billion, according to an EU-commissioned study.

An agreement would go much further than bringing down already low tariffs. It would also aim to synchronise US and European regulations in areas ranging from car seatbelts to pharmaceutical packaging, lowering the cost of doing transatlantic business, particularly for smaller companies.

Jürgen R. Thumann, President of BUSINESSEUROPE said: “The EU negotiators must get a strong mandate from the Member States. We must not shy away from sensitive issues for the European Union if we want the United States to take brave decisions to open their market to European companies. This means no taboos and clear market opening objectives.”

 

France introduced the cultural exception concept in 1993's General Agreement on Tariffs and Trade negotiations with the United States. The aim was to treat culture differently than other commercial products.

According to assessments made by the European Commission and other EU bodies, a comprehensive Trade and Investment Partnership could over time boost EU GDP by 0.5% annually and help create approximately 400,000 jobs in the EU.

The EU-US trade relationship is already the biggest in the world – trading €2 billion of goods and services every day.

The Transatlantic Trade and Investment Partnership (TTIP) will extend beyond the removal of tariffs, to include the opening of markets on investment, services and public procurement. In addition, it will focus on aligning rules and technical product standards which currently form the most important barrier to transatlantic trade.

  • 14 June: EU trade ministers to give the green light for negotiating TTIP
  • 17-18 June: G8

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