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France on TAFTA: Not So Fast


Negotiations haven’t started yet on TAFTA, the proposed EU-US Transatlantic trade agreement, which President Obama announced as a major part of his second term agenda in his inaugural. But before the talks even begin the French are demanding that any agreement exclude their highly-subsidized cultural and entertainment sectors. The French have been warning for some time that this would be a sticking point, but they are now threatening to block talks entirely unless all parties agree to their preconditions. According to the FT:

A senior French official said: “Our position is clear. If audio-visual is not excluded there will be no mandate to start the talks.”

He added: “If David Cameron does not want his [G8] party to be spoiled, he will need to convince the commission [to accept France’s position]. They have got to choose.”

Anyone expecting rapid progress towards an agreement will be disappointed. Even if all parties were highly motivated to reach a deal, the complex labyrinth of EU regulation and subsidies would make this a tough, slow slog. The French, though, appear to have no problems with endless delays. The same French official continued, “There is no enthusiasm in France for the trade negotiations. There would be no hesitation on the part of the government [to block the talks].”

There are many in Washington who would also be happy to see the deal stopped in its tracks. Congressional Democrats are preparing tough questions for the upcoming confirmation hearings of newly appointed U.S. Trade Representative Michael Froman, expected to be the public face of US-EU negotiations.

So how long might these negotiations last? To get a sense, we can look north to Canada, where Stephen Harper’s efforts to finalize a trade deal with the EU have been languishing since 2009. The latest hang-up, according to Bloomberg? European resistance to Canadian beef and pork imports.

The delays also point to a broader issue. While tearing down the remaining boundaries to free trade with Europe would probably provide benefits to both sides, the EU is already one of the America’s biggest trading partners, and tariffs are already relatively low. The pace of trade liberalization is slowing down across the globe, in large part the because the easy-to-reach agreements, those without powerful, entrenched opponents, have already been reached. While we wish American and Canadian negotiators the best of luck, we won’t be holding our breath until they succeed.

[US and EU flags image courtesy of Shutterstock]

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  • Pete

    Europe, and France in particular, are like middle-aged house wives good to seed who are insecure about the affections of their husbands (the world).

    Deep in their hearts these dumpy women know they’ve lost their attractiveness not to mention their sex appeal and hope to hang on by bluster and bellowing.

  • wigwag

    There’s a lot of talk about a pivot away from the Middle East so we can focus more on Asia; those recommending this get it half right. Focusing more attention on Asia is a good idea but it’s not the Middle East we should be pivoting away from, it’s Europe.

    In his heart of hearts, I suspect that Obama understands that Europe is kaput. Just as Obama has continued many of the surveillance strategies of the Bush Administration because he concluded that they were more successful and less intrusive than he thought at first, I have a sneaking suspicion that Obama knows that Donald Rumsfeld was right when he divided Europe into the “old” senile part and the “new” vibrant part found mostly among the former Warsaw Pact nations.

    As we move into the second decade of the 21st century, the United States is still coming to grips with the reality that our trilateral allies in Western Europe and Japan are in terminal decline. Forging new alliances in Asia is the solution to this geopolitical conundrum. But that doesn’t mean we can leave the Middle East so it can be dominated by Iran or picked clean by China and Russia. We need to remain actively engaged in the Middle East; it’s Europe we need euthanize; a good place to start would be with France.
    It’s time for the United States to move on. Europe is a has-been.

    • bpuharic

      WRM recently wrote an article pointing out the US is not in decline. Neither is Europe. Certainly elites have hijacked the economies of both, but with any luck we’ll both regain a sense of sanity and re-establish responsibility enabling us to grow.

  • lukelea

    I must say that after watching several hours of Friday night cable television programming while baby sitting grandchildren I can’t blame the French. The decadence and depravity were alarming, e.g., a so-called spoof of the 1950’s teeny-bopper culture called Cry Baby. Meanwhile on we have mainstream journalists conversing seriously about Game of Thrones, a medieval fantasy mixed with soft-core pornography, as if it were high culture. Hard not to think of the decline and fall of the Roman Empire.

  • Mark Michael

    As WRM points out, the EU is a huge trade partner of ours, so staying engaged in such trade negotiations makes sense. It doesn’t cost us any real amount of money or superbright manpower to do so. (Actually, just going cold turkey and making it a tariff & quota-free zone might be the easiest thing to do. If you could do it in the dead of night before the Special Interests could mount a counterattack.)

    Militating against the above, I grew up in N. Dak.’s Red River Valley of the North. Farther north from the little town in which I was born were the sugar beet counties. Sugar gives you an example of an absurd subsidy that only has a tiny number of beneficiaries in ND & MN and then down south where they grow cane sugar, yet, it has retained its ridiculously large tariff/quota protections for decades. Even within the U.S. House Districts in ND and MN where sugar beets are grown, its only a small minority of voters who care about it. In fact, there were occasional local protests against the sugar beet growers in at times. Their BMWs Mercedes would get “keyed” by irate citizens! (“Hey! You bought that expensive car with my hard-earned money via protections & subsidies!”)

    That story was written up in the WSJ – where I learned about it. BUT, I knew the sentiment was there growing up.

    • bpuharic

      I think we have little to lose by negotiating free trade agreements with countries that have economic profiles similar to ours, like W Europe. However, we engage in a race to the bottom when we do so with countries like China or Mexico where labor standards are much weaker. We never include labor standards in such negotiations, though we should.

      • Mark Michael

        I think the experience with NAFTA shows us that there are substantial benefits for both Canada, the US, and Mexico, BUT it was politically divisive w.r.t. Mexico b/c of the wide disparity in per capita incomes with the US & Canada. For me, the biggest problem with NAFTA has been the extensive illegal immigrant flood into the US – that’s an immigration law problem, not a NAFTA problem of course. But the 2 are somewhat coupled together. That hurt the less-skilled, lower income segment of the US workforce substantially. (I do not agree with the Libertarians who claim that it only lowered the bottom wage scale by 4.5%. Those studies are way off IMO. It was much larger than that.) Restricted immigration from Central America over our southern border – keeping the low-income jobs for native-born Americans – that can’t be outsourced – would have made NAFTA much less politically divisive than it has been.

        Trying to dictate internal labor standards via trade agreements is bad policy IMO. When nations become richer they will naturally insist on better working conditions for their citizens. You’re seeing that somewhat in China today. Outsiders “dictating” to them gets their defensive hackles raised. “Stay out of our internal affairs! It’s none of your business.”

        NAFTA gave the US and Canada a way to partition low-end jobs to Mexico, retain the high-end jobs in the US and so better compete with Europe, Japan, China on the global trade front. Many of our larger multinational corporations did that. On average, the US and Canada did come out ahead, thanks to Mexico being in NAFTA in my opinion.

        • bpuharic

          I disagree that as nations get richer, labor standards increase. We’re seeing exactly the opposite here in the US. If we were to negotiate these upfront, American workers wouldn’t buy jobs overseas along with decreasing labor standards and wages here

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