Bridges Weekly Trade News DigestVolume 17Number 17 • 16th May 2013

UK Prime Minister Calls for “No Exceptions” in EU-US Trade Talks

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All items should be on the negotiating table when the EU and US kick off their highly-anticipated trade talks this summer, UK Prime Minister David Cameron said this week following a meeting with US President Barack Obama, in comments that highlighted the growing debate within the EU bloc over how certain trade topics should be treated in the upcoming discussions with Washington. The negotiations, Cameron urged, should be ready to begin ahead of the Group of 8 Summit this June.

Brussels and Washington announced in February their plans to begin negotiating a bilateral trade and investment deal, following over a year of discussions of whether such talks would indeed be feasible. (See Bridges Weekly, 13 February 2013)

Efforts to liberalise trade between the two sides have hit hurdles in the past, with disagreements centring on topics such as regulations and standards, among others. However, the two sides are hoping that this set of negotiations can lead to a deal that will help support both of their struggling economies, and have said that they aim to clinch an agreement by late 2014.

No exclusions “worth the effort,” Cameron says

In an op-ed published in the Wall Street Journal ahead of his meeting this Monday with Obama, Cameron stressed that excluding certain items from the negotiating agenda would only hinder an EU-US deal from reaching its full potential.

“Too often in trade, the forces defending special interests shout loudest,” he wrote. “But it makes no sense to exclude vital parts of the economy. Everything must be on the table.” The UK Prime Minister further reiterated that point when speaking to reporters in Washington on Monday, adding that it is “worth the effort.”

Cameron’s emphasis on “no exclusions” comes amid growing concern among some EU member states over whether some traditionally off-limits items, such as its “cultural exception” rule, could suffer as a result of the bilateral talks.

The “cultural exception” rule involves the exclusion of audiovisual goods and services from some trade disciplines, on the grounds that cultural goods and services are not the same as other products. This exclusion allows, for instance, for some subsidies, quotas, and other measures to support domestic cultural products.

The topic has become especially heated since the European Commission’s submission to member states in March of a draft mandate for the talks. (See Bridges Weekly, 13 March 2013) While the terms of the draft mandate have not been released publicly, French Trade Minister Nicole Bricq has insisted that the final version must make clear that the cultural exception is not up for negotiation.

“This is a sine qua non condition for our country,” Bricq said in April, threatening to block the launch of the talks unless this is assured. EU member states must all sign off on the final version of the Commission’s negotiating mandate before Brussels can begin negotiating. France has long been a proponent of maintaining the cultural exception, being one of its main advocates during the Uruguay Round of trade talks that established the WTO.

EU Trade Commissioner Karel De Gucht has already sought to dispel fears over the future of the EU’s cultural exception, promising to keep it off the agenda of the Washington talks. (See Bridges Weekly, 25 April 2013)

The European Parliament’s trade committee has already voted in favour of a resolution prompting the European Council to authorise the launch of the talks. (See Bridges Weekly, 2 May 2013) The committee also approved an amendment that called for cultural and audiovisual services to be excluded from the negotiating mandate. The resolution is now on the agenda for the European Parliament’s upcoming plenary session in Strasbourg later this month.

EU culture minister group: protect cultural exception

EU culture ministers were quick to respond to Cameron’s suggestion of “no exclusions,” with 14 of them inking a joint letter insisting that the EU cultural exception be kept off of the negotiating table.

The group - which included Austria, Belgium, Bulgaria, Cyprus, France, Germany, Hungary, Italy, Poland, Portugal, Romania, Slovakia, Slovenia, and Spain - said on Tuesday that the EU must maintain its long-held position on excluding audiovisual services “from any agreements on trade liberalisation,” including the WTO and in bilateral agreements, according to excerpts of the letter printed by Agence France Presse.

Audiovisual media accounts for one million jobs across the 27 EU member states, according to the European Commission.

Launch in time for G-8 summit?

Following his meeting with Obama on Monday, Cameron noted that he hopes the EU-US talks can kick off in time for the G-8 summit next month in Northern Ireland, which is scheduled for 17-18 June. The UK is the current holder of the G-8 presidency.

“There is a real chance now to get the process launched in time for the G-8,” Cameron told reporters at a joint press briefing with the US President. “So the next five weeks are crucial.”

He also added that the upcoming G-8 summit - which will bring together leaders from the US, UK, Canada, France, Germany, Italy, Japan, and Russia - is an opportunity that the group should seize to agree on “ambitious action for economic growth.”

“Open trade is at the heart of this, but we have a broader agenda too - to make sure everyone shares in the benefits of this greater openness, not just in our advanced economies but in the developing world too,” Cameron said.

At the press conference, Obama similarly stressed that the EU and US should kick off their talks shortly.  “I look forward to launching negotiations with the EU in the coming months,” he told reporters. “I believe we’ve got a real opportunity to cut tariffs, open markets, create jobs, and make all of our economies even more competitive.”

Proposed British referendum on EU fuels unease

Cameron’s push for the planned EU-US talks comes as the Prime Minister has been plagued by questions over whether or not Britain will even remain in the 27-member EU in the long-term. The UK leader has pledged that he will renegotiate the terms of his country’s membership in the bloc if he wins re-election to office in 2015 - and will then hold a subsequent referendum on the reforms, and whether to stay in the group at all, by 2017.

“Well, first of all, on the issue of a referendum, look, there’s not going to be a referendum tomorrow,” Cameron told reporters at the White House on Monday. “And there’s a very good reason why there’s not going to be a referendum tomorrow - [it] is because it would give the British public I think an entirely false choice between the status quo - which I don’t think is acceptable.”

“I want to see the European Union change,” he explained. “I want to see Britain’s relationship with the European [Union] change and improve. So it would be a false choice between the status quo and leaving. And I don’t think that is the choice the British public want or the British public deserve.”

The following day, however, Cameron issued a draft bill on such a referendum, in an effort seemingly aimed at placating concerns from within his own party and avoiding having to take a stronger position regarding whether to give up EU membership. He told Channel 5 News in Boston, however, that the move was not one of panic. “If this was a Conservative-only government, we would just get on and legislate. We can’t do that because we are in a coalition.”

The draft bill proposes that such a referendum be held by the end of 2017, though it does not require the government to leave the EU even if there is majority support for doing so.

Obama, for his part, stressed on Monday that the decision is ultimately that of the UK people, and mostly refrained from weighing in on the subject - while emphasising the importance of the UK-EU relationship.

“I will say this - that David’s basic point that you probably want to see if you can fix what’s broken in a very important relationship before you break it off makes some sense to me,” he said in his joint press briefing with Cameron. While the internal EU negotiations are tough, he said that he would prefer to see what the outcome of such talks are before rendering any judgement of his own.

ICTSD reporting; “Cameron to rush out draft bill on EU vote,” FINANCIAL TIMES, 13 May 2013; “David Cameron denies EU referendum plan is panic reaction to Eurosceptics,” THE GUARDIAN, 13 May 2013.

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