The clock is set. France and the United States have given themselves 15 days to find a compromise at the OECD on digital taxation, French Finance Minister Bruno Le Maire announced at a press conference on Tuesday 7 January.
“We have given ourselves exactly 15 days, i.e. until our next meeting, which is scheduled on the sidelines of Davos at the end of January”, he said, after having spoken at length the day before with his American counterpart, Steven Mnuchin, in order to ease transatlantic tensions over the French ‘GAFA’ tax (see EUROPE 12397/5).
Paris has already spoken out publicly in favour of the OECD proposal on Pillar I (see EUROPE 12377/23), while Washington has been accused of backtracking on international tax reform since December (see EUROPE 12385/7).
Nevertheless, during these 2 weeks, no American sanctions are to be imposed, Bruno Le Maire warned. The United States threatened to impose new targeted tariffs on imports from France following the Section 301 investigation launched by the US Trade Representative (USTR), Robert Lighthizer, into the French ‘GAFA’ tax (see EUROPE 12385/7, 12382/20).
“I have made it clear to Steven Mnuchin that as long as we were talking, as long as we were negotiating, there could be no American sanctions”, the French minister said.
On Tuesday, the proposed US measures were being discussed at a public hearing organised by the Office of the US Trade Representative.
The European Commission alongside France
Visiting Paris on Tuesday (see other news) and speaking alongside Bruno Le Maire, EU Trade Commissioner Phil Hogan expressed concern about the threat of US sanctions and reiterated his support for France.
“The European Commission will stand together with France and all of the Member States who wish to have the sovereign right to impose digital taxation in a fair way”, he said. He added that if sanctions were imposed on France, “all possibilities” would be examined.
For Mr Le Maire, who continues to hammer home that the French tax on Big Tech is not discriminatory, this is not a uniquely French problem, but a more general problem between the United States and Europe.
Italy and Austria have already introduced similar taxes, while Britain has announced its willingness to do so, he said. Thus, he said, there is a “risk of trade conflict between the EU, many European states and the United States”.
In the event of sanctions, France is in any case ready to retaliate and will not hesitate to take the case to the World Trade Organisation (WTO), Mr Le Maire stated.
“We believe dialogue and consultation is better than confrontation”, said Mr Hogan, who will be in Washington 14-16 January, where he will meet with Mr Lighthizer and others. (Original version in French by Marion Fontana with Hermine Donceel)