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Transatlantic partnership/China

Published on June 19, 2013
Hearing of Mme Nicole Bricq, Minister of Foreign Trade, before the Senate economic affairs and European affairs committees (excerpts)

Paris, June 12, 2013

EU-US TRADE AGREEMENT/FRENCH INTERESTS/PUBLIC PROCUREMENT ACCESS/GEOGRAPHICAL INDICATIONS/DEFENCE/INVESTOR-STATE DISPUTE SETTLEMENT MECHANISM

Thank you for your welcome. As you know, on Friday I shall be presenting France’s position to the other 26 European Union foreign trade ministers. The negotiation between the European Union and the United States, which account for 40% of world trade and two-thirds of the world’s innovative investment, could take longer and be tougher than some envisage. I might point out that, in the negotiation with Canada, we started off from a relatively unclear mandate and the discussions are still going on five years later with many new questions.

Let me also draw your attention to the fact that the United States is organized on a federal model and several states aren’t legally bound by the decisions of the central government, and judging by the meetings I had during my visit to the United States we’re going to face stiff opposition. At the same time, the United States is negotiating the Trans-Pacific Partnership Agreement and her interest in that area deserves highlighting. I note that a successful transatlantic agreement would be likely to give the major emerging countries something to think about: in order not to find themselves excluded from certain standards, China and Brazil could feel inclined to strengthen their position through multilateralism, which these agreements would indirectly promote.

It is in France’s overall interest for this partnership to succeed and the majority of our companies are in favour of it. However, those in the agri-foodstuffs industry are split, because prospects differ according to the types of product envisaged and we’ll have to perhaps invoke a safeguard clause for some of them. We have offensive interests in sectors such as chemicals, pharmaceuticals, textiles and clothing, public procurement and maritime and air transport. As regards public procurement access, the European regulation currently being drawn up aims to include a reciprocity clause in this area; I am sorry that Germany is opposed to the introduction of such a mechanism, which she wrongly deems protectionist, when in fact it could be very useful to us in our negotiation with the United States. In this respect, I thank the Senate for adopting a resolution which supports the introduction of this reciprocity.

We have defensive interests as well. We’d first like to protect geographical indications, but we aren’t alone in this – as shown, moreover, by my recent visit to Malaysia and Indonesia. As regards the defence industry, with the support of the United Kingdom and Sweden, the Commission has agreed not to include this sector in the negotiation mandate. We’ve asked, with Germany, for the negotiation mandate to encompass the investor-state dispute settlement mechanism: if the procedure for settling trade relations disputes is broadened to include companies against states, we fear that lawyers and American companies will seize on it, as seen under the North American Free Trade Agreement (NAFTA) against Mexico. As far as our collective preferences are concerned, France reaffirms her rejection of GMOs, hormone-treated beef and carcass decontamination: we’ve got progress on these points.

CULTURAL EXCEPTION

We’re maintaining a very firm position on audiovisual and cultural services: they must be excluded from the negotiation mandate, in line with consistent practice. Many countries tell us they agree with us, but fear that if these services are excluded from the negotiation mandate, the United States too will ask for certain sectors to be excluded. I believe, however, that they could argue for certain services to be excluded anyway. France must take the initiative on this issue, even though she may appear a bit isolated at the start of the negotiation: I don’t want culture to be subjected to bargaining.

CHINA/EU TRADE POLICY/ANTI-DUMPING

Current events lead me also to talk about trade policy towards China. France is in favour of trade defence measures. However, they come under the exclusive remit of the European Commission, which proposed launching anti-dumping proceedings against China on the sale of PV panels; I recall that the matter had been referred to it by French and German companies, in their interest above all. Provisional taxes have been introduced for a year, pending the results of the investigation. In the telecommunications field, the Commission is also investigating, on its own initiative, the case of subsidies paid to the two companies dominating the sector in China. So the Commission is putting itself in a position to negotiate with that country, and in actual fact, a trade war is in the interest of neither the European Union nor China. Moreover, various disputes account for only 1% of our trade and we support the Commission in reaching a compromise. Through a “mirror effect”, China announced the opening of an investigation into wine.

WORLD TRADE/SOCIAL AND ENVIRONMENTAL STANDARDS

I’ll conclude with the responsibilities of world trade in complying with social and environmental standards. The factory accident in Bangladesh killed over 1,000 people, and, as clients, European and North American companies were indirectly involved through complex supply chains. I recently drew the OECD’s attention to the importance of compliance with social and environmental standards and French companies rallied behind the charter on the safety of buildings in Bangladesh drawn up by NGOs. I also made Commissioner Karel De Gucht aware of this; he told me that he would take initiatives in July, and the Prime Minister has tasked me with promoting social and environmental responsibility in international trade. International trade needs environmental and social rules and standards: it is France’s duty to promote them. (...)./.

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