MADRID (Reuters) - Europe will protect its cultural subsidies in a proposed free-trade pact with the United States, the EU trade chief said on Friday.

But he called on EU states to allow the inclusion of the movie, television and music industries in negotiations.

Karel De Gucht said European Union member states should be allowed to maintain subsidies for film and radio, but that they should open up the audio-visual sectors - in areas such as digital TV, and internet technology - so they are not completely closed to U.S. companies.

"All we want member states to consider, in fact, is whether they really need the possibility of excluding 100 percent of foreign audio-visual productions (in trade negotiations)," the trade commissioner said at an event in Madrid.

"Taking a whole sector off the table would run counter to Europe's interest in obtaining a broad and comprehensive agreement," he said.

De Gucht is trying to secure an agreement on a common EU negotiating stance at a meeting of trade ministers on June 14 and wants to be as open as possible when it comes to negotiating with Washington to obtain U.S. concessions in closed areas such as U.S. shipping.

France, which has long defended a "cultural exception" in trade affairs to protect European arts from Hollywood-driven market forces, has threatened to block the start of the EU-U.S. talks and secured backing from other EU states to try to limit their scope.

"What has been said in public is that we're about to sell our cultural diversity to the Americans to get a deal. Nothing could be further from the truth," De Gucht said.

The United States and the European Union hope to hold a first round of talks towards a free-trade agreement in July.

(Reporting by Julien Toyer; Editing by Jeremy Gaunt)

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