France isn’t isolated on GAFA digital giants’ tax, argues Minister

Foreign policy – NATO/GAFA/European budget/CAP/European defence – Excerpts from the interview given by Mme Amélie de Montchalin, Minister of State for European Affairs, attached to the Minister for Europe and Foreign Affairs, to BFM Business TV

Paris, 5 December 2019

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NATO

Q. – All the images we’ve seen of the NATO summit, with that incredible video where you see Justin Trudeau, Boris Johnson and Emmanuel Macron mocking Donald Trump, who went back [to the US] as a result – the same Donald Trump who insults the French President; we’re in a crazy world, we’re at kindergarten! (…)

THE MINISTER – There have been many episodes. We can go back to around 2003 when there was the business with the Iraq war; there have been many times when the allies have had more or less friendly or easy-going discussions. Why is the context unusual in this case? Because we need to clarify what NATO’s objectives are. Of course, when you embark on discussions about objectives, when you’re not just tinkering around with things, you’re really at the heart of NATO’s mission…

Q. – Emmanuel Macron’s provocation about…

THE MINISTER – It isn’t a provocation!

Q. – …brain death…

THE MINISTER – It isn’t a provocation. What are we seeking? We’re seeking an injection of new momentum, we’re seeking clear-sightedness, we’ve got to look at the situation: Turkey has done things in northern Syria which aren’t exactly what you might expect from an ally. You’ve got players buying military equipment – Turkey again – from places where it’s no longer interoperable [with NATO systems]. So you’ve got questions being raised, in the Sahel you’ve got a terrorist threat about which we think we must do more together. So why does the President say that? Because he’s saying, “we can act as if nothing has happened” and allow essential solidarity to be weakened, or we can create European sovereignty so that Europeans say things together and then in NATO we ask ourselves questions again: who are our friends? Where is the threat? What are we seeking to do together? As you know, it was created in response to the Warsaw Pact during the Cold War!

Q. – The Atlantic Alliance is 70 years old.

THE MINISTER – We’ve just celebrated the 30th anniversary of the fall of the [Berlin] Wall. Thirty years on from the fall of the Wall we’re perhaps entitled to ask ourselves why we’re doing all this together; that doesn’t mean we’re calling the institution into question, but we’ve got to clarify these objectives and this is what we endorsed together in London yesterday. (…)

Q. – It’s quite fascinating what we witnessed yesterday.

THE MINISTER – …but if you look at the summit’s conclusions, I think they’re interesting, they’re productive and we’ll be able to think about our objectives together.

GAFA tax

Q. – Another issue, where Donald Trump put his foot in it this time, was the GAFA tax [on Internet giants including Google, Apple, Facebook and Amazon]; he threatened France with every possible trade sanction. Yesterday, Bruno Le Maire [Economy and Finance Minister] was at a Eurogroup meeting to try and rally the Europeans. Isn’t France a bit isolated on this issue, the GAFA tax? I’ve seen the European Commission Spokesperson’s statements, but…?

THE MINISTER – We aren’t isolated. Firstly, here too, this is about sovereignty; what does sovereignty mean? It means being able to adopt measures because we think they’re the right ones. We think it’s right, in France, and what’s more there are other countries – the Czech Republic, for example, has planned to do the same thing, to levy a tax, which isn’t a total one, on people who don’t pay…

Q. – Does Europe, do the Germans support us?

THE MINISTER – People who don’t pay tax today benefit from the Common Market, they benefit from our purchasing power ability and don’t contribute to our market. So it’s a sovereign right, and Europe says it will obviously be united in protecting, in responding if necessary so that any country in Europe has the right to take decisions in a sovereign way. What Phil Hogan, who’s now European commissioner for foreign trade, and the European Commission Spokesperson have said is that Europe will, of course, be united in responding to the United States so that France doesn’t find itself the target of all the criticism.

Q. – And so what’s happening here? The OECD is continuing discussions, we’ve seen statements made by Treasury Secretary Steven Mnuchin, who’s saying…

THE MINISTER – You’ll remember that we had a principle in Biarritz, which was to say: “in the OECD framework France, the United States and all the European countries are having a discussion about having a digital tax, we’ll come to an agreement in the OECD framework. And if the OECD-agreed tax is slightly different from the one we put in place in France in 2019, we’ll adjust things”, which was common sense. The question now is: what is the United States going to do at the OECD? Is it…

Q. – It said it was ready to hold discussions in the OECD framework!

THE MINISTER – Very well, in which case we’ll keep what was agreed in Biarritz, namely, “let’s have a discussion in the OECD framework, you’ll tell us if you’re for or against and we’ll apply a tax…”

Q. – But in the meantime we apply the GAFA tax…

THE MINISTER – That’s what we told ourselves: we’d apply it and if ever the OECD tax…

Q. – But therefore retaliatory trade measures, the threats at least relating to champagne in particular and others…

THE MINISTER – So we’re going to stop the threats, that isn’t how allies talk to each other, nor is it how you govern affairs…

Q. – Yes, go and tell that to Donald Trump, Amélie de Montchalin…

THE MINISTER – Yes, but what I also heard is that Donald Trump and Emmanuel Macron told each other they were going to go on talking, that they had both made a mutual commitment in Biarritz a few months ago, so we stick to that. But, you know, it’s important in what I do that we get others to honour their word, because otherwise the world becomes chaotic and everyone is permanently taken by surprise.

Q. – Yes, but that’s pretty much the case.

THE MINISTER – And so we Europeans have an agreement, we’re keeping to it. Equally, we aren’t naïve, so if, of course, there are retaliatory measures, like what was done incidentally with the previous measures, linked to Airbus and Boeing, we’ll stick together, we’ll be ready to respond and protect, above all, those involved who may be impacted on the ground.

EU budget

Q. – The European budget, because there are discussions about the European budget, even though the new Commission has only just taken office with the Finnish presidency: we’ve seen revelations by colleagues which have shown, as you know, that for example we want to build a powerful Europe, we want to build a Defence Europe and the planned European budget [has been] halved!

THE MINISTER – Let me pick up on some things…

Q. – Yes, but it’s true!

THE MINISTER – We’re in a negotiation; admittedly the Finnish presidency, which has to consolidate all the positions, has proposed one thing, there are things I very much agree with, there’s more money for the CAP…

Q. – …badly targeted, but we’ll come back to this.

THE MINISTER – …which is good news because it’s an element of sovereignty; here too, it’s about how we have autonomy [and ensure] that what ends up on our plates is linked to our standards, to the desire for our farmers to be the ones feeding us. (…)

I can tell you today that there’s progress on the proposal. There’s progress on the end of rebates, there’s progress on the EU’s own resources, there’s progress on agriculture, on support for transition regions, all those intermediate territories, where the Yellow Vests were, whose economic development Europe can continue to support. All this is progress; this wasn’t the case six months ago. So we’ve made headway. (…)./.

Published on 10/12/2019

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