Talk of a U.S.-European Union free trade agreement has been building for some time, getting a boost from lagging Western economies and the obvious benefits of opening up new global markets for expanding companies. But negotiations could very well end before they begin. The issue, as is often the case with large free trade deals, is protectionism.
Despite the fervent hopes of the utopian Eurocrats, the EU isn’t one large country–it’s 27 of them, each with its own industries it would like to protect from free trade. Additionally, the protectionist sticking point is not merely a technical or financial issue, but one sensitive enough to threaten the entire project: culture. France is concerned about what boils down to Yankee cultural imperialism. The Wall Street Journal reports:
As television and movies are increasingly delivered over the Internet, France particularly opposes talks that might limit how European governments impose taxes on technology companies to fund those subsidies.
“The feelings and imagination of each nation are expressed through these services,” Henri Weber, a French member of the European Parliament, told reporters. “Each country has the right to support its creators and authors. This has nothing to do with trade and commerce.”
It actually has everything to do with trade and commerce, and it does not bode well for this trade deal if the nations involved cannot agree on the meaning of the word “trade.” It also calls into question France’s definition of European Union. But that’s part of the illogic of the EU project in the first place, and why it has faltered so predictably. There is no such unified concept as “Europe.” It is a continent of countries each with its own distinct language, culture, and–this one’s important too–national borders.
The EU was supposed to do its best to eliminate those borders in theory if not reality by enabling migration and trade across the continent. But then it turned out that European countries weren’t so keen on the migration part, and now don’t seem to have much desire for trade either. That doesn’t mean they don’t or won’t trade–it just means the creation of the EU hasn’t done much to change the way they do so. They want to trade as individual nation-states, not part of a single unified entity.
There is another rather humorous contradiction in the French objection as well. Industries only need government protection when they cannot thrive on the open market on a level playing field. Sometimes this is done to create jobs to ease worries about outsourcing in a globalized world. Other times it is done to protect important national-security information, as with weapons manufacturers and defense contractors. But the French concern is about culture: that is, the people of France prefer American culture by and large, even though they don’t like saying so. They vote with their wallets. The Journal explains:
U.S.-produced content accounts for more than 60% of TV and radio programs and movies across Europe, despite a patchwork of state subsidies that supports—and possibly protects from extinction—the kind of work that stands little chance of receiving Hollywood backing, becoming a global hit or even turning a profit.
Even in France, the most popular television shows are some of the same U.S.-made police fare that has become the meat-and-potatoes of American prime-time television, including the Mentalist, Criminal Minds and CSI: NY. Medical dramas—such as House and Grey’s Anatomy—also rank near the top.
One French film executive told the Journal frankly that if they had to compete on a level playing field many of the independent French films would never make it to the screen. Many of the films shown at the Cannes festival were, apparently, beneficiaries of government subsidy. The Journal closes by explaining what essential French culture would be lost to the world:
Hollywood studios might be unlikely to back a good number of them, including this year’s winner, La Vie d’Adèle, a love story that features an extended scene of graphic lesbian sex, Mr. Lamassoure said.
And what kind of heartless capitalist monster would seek to deprive audiences of such tasteful French pornographic cinema? Surely they can understand the desire to scuttle an entire free trade agreement over the threat posed by boorish American hillbillies and their inability to grasp the cultural gift that is extensive French nudity.
But of course France isn’t alone in wanting to protect its favored industries. Other European states are supporting France on this because they can’t wait to open the floodgates of protectionism. Neither can the U.S., which has been reminding European negotiators that American companies should be excepted from the rules if European companies are. Fair is fair.
And France’s intransigence can derail the trade talks even without others in their corner because EU rules give each country veto power over the process even before it begins. Demanding preconditions based on veto threats available to 27 countries sets a fairly dangerous precedent. It also makes it clear that the cause of free trade is ill served by the EU, which is a union in name only.