By Mark John and Philip Blenkinsop

PARIS/BRUSSELS (Reuters) - France is "extremely determined" to keep movies and digital media out of free trade talks between the EU and the United States, a government minister said on Wednesday, a stance that could block the start of negotiations.

Two days before EU countries are supposed to give the go-ahead for negotiations, the EU is struggling to find a compromise that satisfies France's "cultural" concerns without exempting the audiovisual sector from the wide-reaching talks.

"France defends and will defend the cultural exception to the end - that's a red line," French Culture Minister Aurelie Filippetti told Reuters TV, referring to current EU rules that allow governments to preserve "cultural diversity" by setting subsidies and quotas that might otherwise be considered contrary to free trade.

Asked if Paris would go as far as blocking the opening of talks on what would be the world's largest free-trade agreement, she replied: "France is extremely determined."

The first round of talks has been tentatively scheduled for July, but both sides must first agree the scope of the negotiations, something EU trade ministers should finalize at talks on Friday.

The Transatlantic Trade and Investment Partnership could increase Europe's economic output by 65 billion euros ($86.3 billion) a year, according to the European Commission, with the United States getting a similar boost.

But for that to happen, EU trade ministers must reach a unanimous agreement in their discussions on Friday. France's stance would appear to make that impossible at this stage.

DIGITAL COMPROMISE

Paris says it will not be pushed into signing up until it is satisfied that its system of support for film, radio and other audio-visual products remains shielded from Hollywood. It also wants to make sure any future technologies in the cultural sphere, such as visual arts downloads, are protected.

While other EU countries want to protect against too much U.S. content and preserve subsidies, they are happy with a compromise put forward by EU Trade Commissioner Karel De Gucht.

That would allow EU members to retain subsidies and quotas for traditional media, but leave space for U.S. and European companies to compete in the rapidly developing Internet and digital areas, including TV on demand and music downloads.

Britain, Germany and others argue that if the EU excludes the audio-visual sector completely, as France demands, the United States will exclude its own closed sectors, such as maritime cargo or public procurement.

"It's very sensitive for the French," Irish Trade Minister Richard Bruton, who will chair Friday's talks, told Reuters.

"If you start taking sectors off the table, complete carve-outs, so will the other side."

Following 14 months of preparations, Brussels and Washington say the time is right for a deal first mooted three decades ago but considered too difficult because of the concerns over the impact of opening markets, especially the farming sector.

William Kennard, the U.S. ambassador to Brussels, has warned against setting red lines before talks begin, telling the European Parliament that the moment to start talks was now.

"The alignment of stars won't last forever. We need to seize the opportunity," he said last week.

(Additional reporting by Robin Emmott in Brussels and Pauline Mevel in Paris; Writing by Robin Emmott; Editing by Robin Pomeroy)

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