EU trade ministers yesterday sought to reassure France on its prized “cultural exception” so that talks on a free-trade agreement (FTA) can be opened next week with the US which believes that no issues should be excluded.
Negotiations with Washington promise to be difficult and France insists that the audiovisual industry and its special protected status be a no-go area in the talks on what would be the world’s biggest free-trade deal and provide a major boost to sluggish economic growth.
Ministers are under great pressure to agree a mandate for European Commission (EC) to negotiate the EU-US Transatlantic Trade and Investment Partnership (TTIP) so the talks can be formally launched at next week’s G8 meeting.
However, France has warned it is ready to use its veto to block the talks if the audiovisual sector is included, fearing it might get caught up in the inevitable horse-trading.
“France will oppose the opening of the negotiations if culture and the cultural industries are not protected, are not excluded,” French Prime Minister Jean-Marc Ayrault told parliament earlier this week.
Paris jealously guards the “cultural exception,” with French TV required to air at least 40 percent home-produced content, and another 20 percent coming from Europe, before US TV soap operas even get a look in.
Cinema-goers pay a levy on each ticket to help fund the French film industry.
In an effort to get France on board, an EU source said the commission has offered it an unprecedented right to approve whatever is decided when culture and audiovisual issues come up for discussion.
The EC wanted to “go the extra mile,” the source said, adding this is a “clear sign of flexibility.”
The commission believes that it must have a mandate which includes all areas as excluding one sector could give Washington an early bargaining advantage.
“Starting the negotiations by excluding some sectors would not be wise ... and would come at a cost,” another EU source said.
The EU is hoping to formally open negotiations with the US before the G8 meeting in Northern Ireland on Monday.
Washington and Brussels hope the TTIP will deliver a major boost to growth and jobs, especially in Europe where the debt crisis has left the economy stuck in the doldrums.
The numbers involved are enormous in what would be the world’s largest FTA, with bilateral trade in goods last year worth about 500 billion euros (US$670 billion), another 280 billion euros in services and trillions of euros in investment flows.
A free-trade deal would add about 119 billion euros annually to the EU economy, with 95 billion euros for the US, the EU says.
Ministers were to review other issues yesterday, not least a series of trade disputes with China which have also exposed deep differences within the EU.
The EC added to the list on Thursday when it said it was taking China, one of the EU’s biggest trade partners, to the World Trade Organization over tariffs on imports of EU stainless steel pipes.
Meanwhile, a German government source said that Berlin was confident that yesterday would bring a “good solution” which would “accommodate different sensitivities.”