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23/05/2016

France and EU trade policy – no longer the ‘non’ sayer

Trade & Society

France and EU trade policy – no longer the ‘non’ sayer

Cecilia MALMSTRÖM, European Commissioner for Trade; Matthias FEKL, Minister for Foreign Trade of France

[European Council]

The persistent economic slump and a notable weakening of traditional French corporatism in the country under the onslaught of the digital revolution and the long-term effect of (limited but real) reforms in its various services sectors mean the discourse on trade in France is – finally – becoming more interesting, argues Iana Dreyer.

Iana Dreyer is the Editor-in-Chief of Borderlex.eu, a news website dedicated to EU trade and investment policy.

It is the first time in a long time that a French government – of whichever partisan affiliation – tries to spell out a comprehensive trade strategy. It took a pull-out of trade policy away from the domestic political infighting at the economics ministry Bercy to the more internationalist outlook of the Quai d’Orsay under foreign Minister Laurent Fabius shortly after the ouster of the flamboyant arch-leftist economics minister Arnaud Montebourg from the Hollande administration in 2014 to pull this rabbit out of the hat. But here you have it.

A one hundred-page report drafted by the services of France’s secretary of state in charge of trade, Matthias Fekl, in consultation with the country’s various stakeholders in business and civil society, tries to identify the country’s key priorities in global trade. The report discusses the country’s role in global value chains and of its businesses in an urbanising world. The text highlights France’s interests in the services sector, tourism, healthcare, digital. It also stresses aerospace, pharma, chemicals, agri-food, and renewable energy.

The report underlines the need for France to attract investments, highlighting for example a recent move to ease visas for business travellers and investors from selected emerging markets coming to France. It stresses the need for France’s weak SME ecosystem – the economy remains dual, split between the globalised champions and a fragmented small business landscape – to grow and internationalise.

The report is strongly focused on the government’s export promotion activities. Yet its final chapters deal explicitly with the EU’s common commercial policy. In these chapters, multilateralism, TTIP and Japan feature highly in terms of political and geographical priorities for French interests.

Trying to look ahead

The report insists on the need for ‘reciprocity’ in market opening. France is no “naive” free trader, the report states. The way the text defines ‘reciprocity’ remains vague. France still has an interest in reviving plans launched in 2013, but dropped the year after, on a regulation allowing the EU to close public procurement markets to businesses from countries not opening their markets in the same way to EU bidders. Paris also calls for a pro-active antidumping policy — while remaining prudent on the issue of granting China market economy status or not by the end of this year.

France champions the spread of protection of agri-food geographical indications, and still sticks to its audivisual services carve-out – we all know it – and this is set in stone in the report. France under the current socialist government is also behind the EU’s more ‘value-driven’ trade strategy and the Commission’s efforts to overhaul investor-to-state dispute settlement.

The high-profile transatlantic TTIP talks have tended to be discussed behind the scenes in France, and the media are not getting overly excited about it. Quite understandably, the stagnant economy, increasing social tensions, the recent horrendous terrorist onslaught and the relentless rise of the populist National Front party in the country gives much more to worry about and to report on.

French public opinion is split on TTIP: 50 percent of respondents in the latest Eurobarometer poll (November 2015) said they were in favour. Conversations with French officials reveal that the government is in a wait-and-see mode on TTIP and is keen to see progress on issues like public procurement, and NTBs in agrifood, where its businesses have a key interest.

The report was presented and discussed at the National Assembly (France’s lower house) in December and is due to be discussed in the French Senate (its upper house) in March 2016.

Most trade economists and your usual France-bashers, be they fellow Europeans or made in France, might say the above is nothing new and the French view of trade policy is still too corporatist and mercantilist. Overall, this remains true. Also protectionist interests in agriculture remain powerful in shaping French positions in individual trade negotiations.

However, when seen historically the very fact that there is a strategy that acknowledges the reality of today’s trade landscape, signals a fundamental shift. Paris is no longer the usual naysayer in EU trade policy. It is less looking backward than trying to look ahead. It has shifted to more pragmatism and willingness to strike deals.

The persistent economic slump and a notable weakening of traditional French corporatism in the country under the onslaught of the digital revolution and the long-term effect of (limited but real) reforms in its various services sectors mean the discourse on trade in France is – finally – becoming more interesting.