An Urban's Rural View

The "comprehensive, ambitious" trade-and-investment agreement the U.S. and European Union are preparing to negotiate just got a bit less comprehensive and ambitious.

The EU's trade ministers have agreed to a French demand to exclude movies, television shows and radio programs from the talks. France claims a "cultural exception" to protect its television, radio and film industries from foreign (read: Hollywood) competition. By agreeing to the exception the EU is taking off the table any discussion of France's $1.1 billion subsidy for French movies or its requirement that 40% of TV content be made in France.

Americans who follow trade matters may be tempted to say this is regrettable but ultimately no big deal. Everything else is still up for negotiation, after all, in this effort to create a Transatlantic Trade and Investment Partnership. It's just one industry, just another example of the French being French -- right?

Au contraire. This is an invitation for heavily protected American industries to demand their own carve-outs in the TTIP talks. It's fuel for the anti-trade fires raging in Washington and the country at large. It's an "I told you so" talking point for those Americans who think it's always the U.S. that gives in trade agreements while other countries take.

U.S. agriculture has much at stake in the talks. Europe blocks sales of American farm products with sanitary and phytosanitary standards that ban everything from chlorinated chickens to genetically-engineered soybeans. The talks are an opportunity to change that.

At the moment sanitary and phytosanitary standards are still on the table. But if the U.S. responds by taking something off the table Europe wants, like the buy-American policies of state and local governments, a chain reaction of exclusions and counter exclusions could detonate the standards issue.

A European Parliament resolution urged EU negotiators to stand firm on the "precautionary principle," under which European regulators effectively assume products to be harmful until proved safe. That's unfortunate for U.S. ag but it stops short of what happened with the cultural exception. The resolution doesn't prevent EU negotiators from discussing the precautionary principle, which underlies the EU's sanitary and phytosanitary standards.

As the resolution underscores, making progress on the issue will be a slog for American negotiators. Were Europe to declare an "agricultural exception" and refuse to discuss the standards, American agriculture's support for the talks would end.

The TTIP talks have yet to begin, but it's fair to say they're not getting off to a good start. The cultural exception is another reason to doubt that a deal can ever be reached.

Quel dommage. Economists estimate a comprehensive, ambitious deal would boost both the American and European economies by more than $100 billion a year.

Urban Lehner

urbanity@hotmail.com

(CZ)

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