“France would have become the country of refusal of trade”

LThe matter is settled. The European Commission should never conclude a trade agreement on the eve of agricultural elections in France or the Agricultural Show. The prospect of the conclusion of the agreement between the European Union (EU) and the South American common market, Mercosur, has, as we have seen, brutally awakened agricultural anger, arousing in return a rare unanimity of the political class rejecting the project. But on closer inspection, there are no good seasons in France when it comes to trade.

The European Parliament had to decide at the end of 2023 on an economic partnership agreement with New Zealand. The agricultural issues, if not non-existent, were incommensurate with those of the EU-Mercosur project. The agreement included an innovative sustainable development chapter, with the possibility of triggering dispute resolution with commercial sanctions in the event of a violation.

The agreement was approved by 82% of European parliamentarians but by only 28% of French deputies. These accounted for 50% of the votes against and 33% of the abstentions, although they only represent 15% of Parliament. In most groups, including the Greens or Socialists and Democrats, French deputies distinguished themselves from their counterparts by rejecting the agreement. A few months later, an agreement signed with Chile by left-wing president Boric was met with similar reluctance.

A service economy

France would therefore have become the country of refusal of trade. The political reasons for this distancing are strong, the French social pact having been destabilized more than others by commercial opening and globalization. It also has an objective material basis, often overlooked.

The primary objective of trade agreements remains to lower customs barriers or quantitative restrictions on trade. This requires having an industrial base capable of taking advantage of it, especially when the outlook for agriculture is worrying. However, the French economy has several characteristics which “disinterest” it in this type of agreement:

• It has deindustrialized a lot, more than other European economies. Today, manufacturing production accounts for only 11% of gross domestic product (GDP), compared to 17.5% in Italy or 21% in Germany. The gains to be expected from the opening of foreign markets are therefore by construction more limited, especially since one of the main sectors of excellence, aeronautics, already benefits from zero customs duties in application of an international agreement signed in 1980.
• French companies produce in foreign countries through numerous direct investments, whether made for relocation purposes or, more often, to access their markets. 61% of the total workforce of French industrial companies are thus employed abroad. This tropism is more marked than for our European partners. Already present on the markets through their subsidiaries, French companies do not have an obvious interest in opening up to competitors from outside, on the contrary.
• Finally, the French economy has become a services economy with world leaders in many sectors, from finance to tourism to environmental services. The development of these leaders on foreign markets also requires local establishment. If companies can be victims of restrictions or discrimination, trade agreements struggle to resolve them and all the hypotheses of success of these companies will not directly create jobs in France, except in staff and management functions. management. The pressure to open will therefore be limited.

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