European Trade Ministers Debate Terms of U.S. Talks

If the ministers can come to terms, their agreement to start the trans-Atlantic trade talks would enable Britain, a member of the European Union, to hail the official start of the trade round when the leaders of the Group of 8 biggest economies hold a summit meeting that gets under way Monday in Northern Ireland.

A trade pact would aim to cut tariffs and streamline regulations between Europe and the United States, which are already the world’s two biggest trading partners.

But before the talks can go ahead with the United States, the European Union’s 27 trade ministers, meeting in Luxembourg on Friday, must reach a unanimous deal to give the European Commission, the bloc’s executive arm, formal authority to start the negotiations.

The sticking point as the ministers convened Friday — France’s demand to exclude films, TV shows and other audiovisual services from the talks — could prompt the United States to require exclusions of its own. Such exclusions could limit the value of any eventual deal for both sides of the Atlantic.

France is arguing on behalf of Europe’s so-called “cultural exception” — in practice, a thicket of quotas and subsidies for audiovisual productions. Excluding such material from a trade deal would disappoint American technology and media companies, including the online movie distributor Netflix, which wants easier access to European markets.

Early this week, José Manuel Barroso, the president of the European Commission, told filmmakers in France that “the total exclusion” of audiovisual services from the negotiations “is not necessary.”

But France dug in its heels on Friday. Nicole Bricq, the French trade minister, told her 26 counterparts in Luxembourg that she had a “fundamental misunderstanding” of why most other European governments were opposed to the French stance.

“You want to call into question a fundamental principle that’s part of the European project — the cultural exception,” Ms. Bricq told her counterparts. “And you have chosen to do this with a partner that dominates the world in the areas of audiovisual production with the tendencies and temptations that go with power,” Ms. Bricq said, referring to the United States.

In a thinly veiled reference to the European outcry over recent disclosures that the National Security Agency in the United States had gained access to e-mail, Web searches and other online data from many of the biggest Internet companies, Ms. Bricq added that “current events unhappily remind us” of American influence over the online world.

A day earlier, Jean-Marc Ayrault, the French prime minister, threatened to veto the start of the trade talks if audiovisual services were not sufficiently protected.

In contrast to France, however, Britain, Spain, Sweden and Denmark want to move quickly to begin talks to open protected business like the transportation of goods along the United States coastline and American government procurement markets at both the federal and state levels.

“Huge benefits are expected from this initiative,” Jaime García-Legaz, the Spanish secretary of state for trade, and Vince Cable, the British secretary of state for business, innovation and skills, said in a joint message on Thursday.

“The economic situation in Europe obliges us to be proactive,” they said. “We have to provide our companies and professionals with the best possible conditions to provide their goods and services in both markets.”

But how much progress Europe and the United States can make is an open question. Tariffs are already low, and the main goal — harmonizing regulations — is likely to pose a huge challenge for negotiators.

Europeans are generally more likely to see a need to regulate new technologies, including genetically modified foods and online services that already are dominated by American companies like Google, Apple and Microsoft.

There are also questions about their differences over regulations on car safety, pharmaceuticals and financial derivatives.

Article source: http://www.nytimes.com/2013/06/15/business/economy/european-trade-ministers-debate-terms-of-us-talks.html?partner=rss&emc=rss