Best Actor Jean Dujardin for the film 'The Artist' poses at the Palme d'Or Winners Photocall at the Palais des Festivals during the 64th Cannes Film Festival on May 22, 2011 in Cannes, France. - 

President Obama and his European partners at the G-8 summit in Northern Ireland this week will likely use the meeting to launch their plan for a Transatlantic free trade area.

The talks had been in doubt, thanks to French insistence on keeping their system of cultural support -- subsidies and quotas for French movies and music. Paris had refused to approve the trade talks unless this principle was upheld.

Over the weekend, all parties finally accepted the French ultimatum. For the French, this was vindication.

"We just think that culture is not a commodity and cultural diversity should be protected in Europe," said the French ambassador Bernard Emie. "It’s extremely important to have subsidies, to have support, in order that there is a vibrant cultural production."

The ambassador cites popular French movies as proof that subsidies work. For instance, the silent comedy "The Artist" was made with public money -- and it won five Academy Awards.

And yet, the director and producer of "The Artist" have both denounced the French system of movie finance. As does Sylvain Charat, formerly a senior official in the French Ministry of Finance.

"The French subsidy system does not guarantee quality," he said. "It guarantee s only an income for movie producers or actors or artists."

Charat, who now works as a public policy consultant, argues that many French movies are rather dismal,  and that the industry would be better off without support because much of the subsidy goes into paying inflated salaries for the leading actors.

Vincent Cassel is a case in point. The Frenchman played the bullying ballet instructor in the Hollywood movie, "Black Swan."

Hollywood paid him $300,000 for that role, and the movie grossed $330 million. But in the subsidized French film "Mesrine," Cassel was paid more than six times as much, while that movie grossed barely $30 million.

Perhaps the most telling indictment of the French subsidies, claims Charat, is that Hollywood isn’t bothered by them. The American movie industry has not be lobbying for the system to be dismantled.

"Look at what filmgoers watch in European cinemas, there’s a lot of Hollywood films that do very, very well, in France, Belgium, all round Europe," said Jim Killick, a trade attorney.

In France -- Europe’s biggest cinema market -- only four of the 20 most popular films last year were French. Most of the others were American.