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Tuesday, March 26, 2013

Keeping the Free Trade in Free Trade: France in the E.U.


In negotiating free-trade deals with the U.S. and Japan, E.U. officials had to reckon with differing concerns of particular state interests, given the salience of the state governments at the E.U. level. For example, while Germany and Britain were pushing for a deal, Nicole Bricq, the French trade minister, was reflecting the concerns of French producers in urging caution. The impact on trade negotiations could only be to turn them into Swiss cheese.
 
                                       Nicole Bricq, French trade minister, seeking to slow the E.U. down in negotiating free-trade deals with the U.S. and Japan.   Getty Images
 

For example, l’exception culturelle translates into special treatment to protect France’s culture. “We want to exclude from the negotiations everything that concerns culture,” Bricq said. One might ask whether any product or service can possibly stand above all of the particular cultures in the E.U., let alone that of France. The subjectivity involved in tagging particular products as “cultural” in nature provides an opening for a myriad of exceptions.

As if delimiting “concerning culture” were not difficult enough, Bricq voiced concerns from French farmers that the sanitation, environment and animal welfare rules that apply in the E.U. also apply in the U.S. and Japan. Is it possible, however, to achieve such a convergence in harmonizing particular standards, especially given the tremendous cultural differences concerning genetic-engineered crops and hormone-treated livestock? That Bricq wanted to exclude meat and egg producers, corn growers and ethanol producers entirely simply because of alleged “unfair advantages” presumably enjoyed by American producers means that the Americans will insist on still another set of excluded categories (due to alleged unfair advantages on the other end).

In negotiating a trade deal, the parties to such agreements are best advised to look beyond particular disturbances or domestic pressures in order to maximize the long-term benefits of an expansive free-trade. Technological advancement is not easy to predict, not to mention the impact on particular industries. What is in the interest of a dominant industry in a particular state at one point in time may not be so at another time. Pegging included and excluded sectors to a state’s interest at a particular time ties down the resulting trade deal dogmatically. From the standpoint of the long term, the series of exclusions can seem arbitrary. The problem is of course political: that of resisting the immediate political pressure of domestic industries. It is difficult to keep the interest of the whole foremost even when the whole concerned is one’s own union at the expense of particular state interests. Put another way, the salience of state governments at the federal level in the E.U. complicates the efforts of E.U. officials to negotiate trade deals that are in Europe’s long-term best interest.

Source:

David Jolly, “France Seeks Slower Pace of Negotiations For a U.S.-Europe Trade Pact,” The New York Times, March 25, 2013.