France backs EU-US trade talks after winning culture battle

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This article is part of our special report EU-US trade talks: moving forward?.

France cleared the European Union to launch free-trade talks with the United States yesterday (14 June) after fellow EU members accepted its demand to shield movies and online entertainment from the might of Hollywood and Silicon Valley.

 

After 12 hours of talks, EU officials announced that the 27 EU trade ministers had finally agreed a negotiating mandate towards what could be the world's most ambitious trade agreement.

The breakthrough came only after the ministers telephoned their leaders, including French President Francois Hollande, British Prime Minister David Cameron and German Chancellor Angela Merkel, diplomats said.

Paris had refused to join the 26 other EU governments unless television, movies and developing online media were left out.

The final mandate given to EU trade chief Karel De Gucht, who will lead negotiations, does not include the audiovisual sector. However, it does give the Commission the right to ask member states for a broader mandate at a later stage.

"I can live with this," De Gucht told a news conference.

French Trade Minister Nicole Bricq said it was "written clearly in black and white" that culture was excluded.

"We are satisfied, but I don't want to call it a victory," she told reporters after the deal was struck late on Friday.

Trade between Europe and the United States is worth almost $3 billion (2 billion pounds) a day and an accord could boost both the EU and U.S. economies by more than $100 billion a year each – an attractive prospect when both are emerging from low or no growth and are keen to create jobs.

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

Negotiations launch at G8

With a mandate agreed, European leaders and U.S. President Barack Obama plan to use a summit of the Group of Eight countries next week to launch talks. EU and U.S. negotiators aim to finish their work by the end of next year.

Free-trade advocates Germany and Britain had argued that excluding an industry from the talks would prompt a similar U.S. opt-out, such as to protect its closed shipping sector.

Nevertheless, they said it was vital to push ahead with what would be the world's biggest trade agreement, because of the economic benefits it would bring, especially when much of western Europe is in recession.

"This is historic," said a contented Swedish Trade Minister Ewa Bjorling. "The Commission now has a broad mandate."

The United States has said it also wants to go into the talks with as broad a mandate as possible.

"We do not think carve-outs for new audiovisual quotas before we even begin negotiations are helpful," said a spokesman for the U.S. trade representative's office in Washington.

The European Union needed 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.

France, widely considered the birthplace of cinema, has a proud tradition of more than a century of publicly and critically acclaimed movies and pumps in more public funds to its film industry than any other EU member.

The EU audiovisual sector is worth 17 billion euros and provides jobs for a million people.

The United States already sells the European Union far more music, movies, radio and television programmes than it buys from Europe. Its net surplus for the sector averaged 1.5 billion euros a year from 2004 to 2011.

France fears this imbalance will only increase under a trade deal as digital and Internet services – already dominated by U.S. technology companies – become ever more popular.

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.

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