Gafa tax: secret meetings to end tensions between France and the United States

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Handshakes and confident smiles are immortalized in Biarritz. But it is nevertheless 20 km away, in Saint-Pée-sur-Nivelle, that take place in all discretion the most strategic negotiations of the G7 between France and the United States. There, in the family home in stone and the red shutters of Bruno Le Maire, the Minister of the Economy was entrusted with the heavy task "to lower the pressure," says a member of his entourage. Between Paris and Washington, the storm rages around the implementation of the tax on the US digital giants.

Secret meetings have been held quickly in recent days, in parallel with the summit. "As soon as we learned that Steven Mnuchin ( Editor's note: US Treasury Secretary ) came to Biarritz, we knew it was an opportunity to discuss, says one in the entourage of Bruno Le Maire. It is essential to mitigate the wrath of Donald Trump and avoid at all costs escalation to a trade war.

No suppression planned

Sunday, The Mayor went to Biarritz to make a point of step with Emmanuel Macron on these negotiations before finding his counterpart for a new negotiating session in a restaurant in the seaside resort. The United States ambassador to France, Trump's economic adviser and the Trade Representative were to join them this time.

The "Gafa tax", which will come into effect in 2019 and which plans to tax the big digital companies up to 3% of their turnover, has remained in the throat of the US president. Furious, Trump threatened France to increase the tariffs of French wines if Macron maintained this new tax.

"It would be a more symbolic decision than economic," says Bercy. But we must avoid overbidding and discuss now. By removing the Gafa tax? "Not at all," promises a close Bruno Le Mayor who says however that the time is negotiating.

"Smarter to have international taxation"

If no agreement has yet been formally found, France would agree to suspend the Gafa tax as soon as the Organization for Economic Cooperation and Development (OECD) – which has been working since 2007 on a new international digital tax – has found a agreement. "Things are moving quickly and the OECD could agree on a global digital tax by 2021," he says. At that time, we would not wait for its entry into force to remove the Gafa tax, "said a member of the delegation.

The head of state discussed what he himself calls "a matter for litigation" with his American counterpart. "I made it very clear to President Trump that if we find a solution in the OECD, we do not want to keep our tax. It is imperfect, conceded Macron. It's much smarter to have international taxation. If we manage to trigger a dynamic, it's better for everyone. Still, everyone must come to an agreement.

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