EU reaches terms with France on US free trade talks

EU reaches terms with France on US free trade talks

EU trade ministers finally thrashed out a deal Friday on how to negotiate for a free trade deal with the United States, after meeting a French demand to exclude the key audiovisual sector.

French Trade Minister Nicole Bricq (2ndL) talks with Irish Minister for Jobs, Enterprise and Innovation Richard Bruton at the Kirchberg conference centre in Luxembourg, June 14, 2013. The European Union thrashed out a compromise Friday on how to negotiate the world's biggest free trade deal with the United States, easing France's fears its prized 'cultural exception' could be bargained away.

After some 13 hours of talks, ministers had reached what one EU source described as a "not in, not out" formula.

Officials said the ministers would leave the audiovisual sector out of the mandate for initial talks over what would be the world's biggest free trade deal, as Paris had insisted.

But the European Commission would still have the right to raise "any issue" during the negotiations if it saw fit.

French Commerce Minister Nicole Bricq said she welcomed the outcome because it gave Paris "the exclusion of the audiovisual sector" since if the Commission asked for it to be included in the future, that would require a unanimous vote.

"In that case, it would be the same procedure again -- one would ask the French position and we would say 'No' again," added.

EU Trade Commissioner Karel De Gucht, who will lead the talks, stressed that the accord was "not a carve out."

"I am going to listen to what my American friends say on this (and) then we can ... ask for additional mandates" if needed, De Gucht said.

He could "live with" the agreed mandate, he said, adding that he found the French position "understandable" given that technological change was happening so fast in the sector.

It was better to have the flexibility to come back to the issue as the situation developed, he added.

An EU official said the accord was "balanced overall" and "logical" in its treatment of the audiovisual sector, a key element in France's prized "cultural exception" which it insists must be defended at all costs.

"We kind of got what we wanted," which was to be expected in such political negotiations, the official said.

Earlier Friday, Bricq had bluntly told her colleagues that Paris would "refuse any mandate which does not come with protection of the cultural sector and a clear and explicit exclusion of the audiovisual sector."

Washington has said no areas should be excluded from the talks.

EU officials have themselves repeatedly warned that any exceptions would only hand the US an early bargaining chip in what promise to be tough negotiations.

Ministers were under intense pressure to agree the guidelines on which the European Commission will negotiate the EU-US Transatlantic Trade and Investment Partnership (TTIP) so the talks could be formally launched at next week's G8 meeting.

If the deal is done, it would be the world's largest Free Trade Agreement: bilateral trade in goods last year were worth some 500 billion euros ($670 billion); another 280 billion euros in services and trillions in investment flows.

The EU says it would add some 119 billion euros annually to the EU economy, and 95 billion euros for the United States.

But France jealously guards it cultural sector: French television stations are required to air at least 40-percent home-produced content, with another 20 percent coming from Europe before American TV soap operas even get a look in.

Cinema-goers pay a levy on each ticket to help fund the French film industry, which many believe could not survive without such support in the face of Hollywood's dominance.

At the meeting, ministers also reviewed a series of trade disputes with China that have exposed deep differences within the EU -- notably between Berlin and Paris.

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