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Exclusive:EUwantstoexcludeutilitiesfrom U.S.tradetalks
2:18pmEDT

ByEthanBilby BRUSSELS(Reuters)TheEuropeanUnionwantstoexemptstate controlofutilitiesandsupportforcreativeindustriesfromfreetrade talkswiththeUnitedStatesduetostartnextmonth,thelatestdraftof Brussels'negotiatingmandateshowedonTuesday. ThedraftoutlinesseveralexceptionsthatpreserveEUstates'control oversensitivesectors,includingthepowerandwaterindustriesand governmentcontrolledinfrastructureandarelikelytobethemain areasitseekstocordonofffromnegotiations. SeniorofficialsincludingEUtradechiefKarelDeGuchtandBritish PrimeMinisterDavidCameronhavecalledforthebloctocometothe tablewithacompletelyopenmindandofficialssayitisunlikelyfurther substantialexemptionswillbeadded. UnlikeintheUnitedStates,manynationalEuropeanelectricitygridsandpowergeneratorsarestatecontrolled,and governmentsfearthatadealsupportingthefreeflowofU.S.companiesandmoneyintothesectorwoulderodetheir influenceoverassetsseenasvitaltonationalinfrastructure. "ThehighqualityoftheEU'spublicutilitiesshouldbepreserved,"saidthedraft,seenbyReuters,whichsoughtin particulartoexclude"servicessuppliedinexerciseofgovernmentauthorities." AnEUofficialfamiliarwiththedocumentssaidthedocument'slanguagewasintendedtoensurememberstateswere abletoregulateutilitiesandmaintaintheirabilitytocontrolinvestmentinthesesectors. AnotherEUsourceconfirmedthis. Francehadalsothreatenedtoblockthestartofthetalksunlesstheaudiovisualindustryisexcluded. "TheagreementshallnotcontainprovisionsthatwouldriskprejudicingtheUnion'soritsmemberstates'culturaland linguisticdiversity,namelyintheaudiovisualsector,norlimitthosememberstatesfrommaintainingexistingpolicies andmeasuresinsupportoftheaudiovisualsectorgivenitsspecialstatuswithinEUlaw,"thedraftmandatesaid. EUsourcessaidthatFrancehasbeenfightingforastrongertextthatnotonlycommitstomaintainingthestatusquobut alsogivingstatestheabilitytostrengthensuchpolicies. DECADESOFWAITING AfterthelongdrawnoutfailureoftheDohatalksonaworldtradedeal,officialshaveturnedbacktobilateralagreements inabidtoboostgrowth. BrusselsestimatesaU.S.dealcouldincreaseEurope'seconomicoutputby86billioneurosayear,or0.5percentof grossdomesticproduct,andtheU.S.economyby65billioneurosor0.4percentby2027.nL5N0BD7T8 Tradebarriersbetweenthetwosidesarealreadyquitelimitedandthetalksareexpectedtofocusonharmonizing regulations,sothataproductorserviceapprovedinEuropecanbereadilysoldintheUnitedStatesandviceversa. ThelatestdraftfollowstalkswithmemberstatesaftertheEuropeanCommissionproposedanegotiatingmandatein March. SomeEUmemberstatesarealsoconcernedaboutaprocedureincludedinthemandatetoallowforresolvingdisputes betweeninvestorsandstates. Whilesuchdisputemechanismsareincreasinglycommoninfreetradeagreements,someEUdiplomatssaytheyarenot necessaryfortwopartieswithstronglegalsystemsalready. CampaignerswarncreatingadisputemechanismwouldopenEUmemberstolawsuitsfromfirmsseekingtoweaken environmentalandpublichealthprovisionsandthatthemerethreatofadisputecouldforcestatestogiveintobig business. Theupdateddraftincludeslanguagedesignedtocalmsuchfears. "Investortostatedisputesettlementmechanismshouldcontainsafeguardsagainstfrivolousclaims,"thedraftsaid. "Theinclusionofinvestmentprotectionandinvestortostatedisputesettlementwilldependonwhetherasatisfactory solutionmeetingEUinterests...isachieved." (EditingbyPatrickGrahamandHenningGloystein)

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