In which sectors is France independent?

In which sectors is France independent?
In which sectors is France independent?

Despite the inflationary context, France continues to attract foreign investments. According to the latest EY (Ernst & Young Global) barometer, the country retains, for the 5th consecutive year, first place in the European attractiveness ranking, with 1,194 projects identified. In this context, where international trade is omnipresent, it is legitimate to ask whether France can be totally independent in certain economic sectors. We interviewed Philipe Crevel, a specialist in macroeconomic issues, to identify the areas where France stands out.

On May 13, 2024, President Emmanuel Macron and nearly 200 business leaders gathered at the Palace of Versailles for the 7th edition of the Choose France Summit. The aim of this event, launched in 2018 by the Head of State, is to attract foreign investors to “supporting growth, innovation and employment throughout France”. And for good reason, several sectors have been invested by foreign companies, such as artificial intelligence with the contribution of 4 billion euros from Microsoft, health and even fintech. With such external financing, one can wonder if France is, today, independent in certain sectors and if this is still possible with globalization. Philippe Crevel tells us more.

“It is practically impossible for a sector to be completely self-sufficient”

From the start of the industrial revolution, from the 19th century, international trade became essential. Today, this trend is even more pronounced. “In the contemporary economy, it is practically impossible for a sector to be completely self-sufficient. The global economy operates on trade”, explains macroeconomist Philippe Crevel. Whether for energy, raw materials or even services, dependence on international trade is omnipresent. Let’s take the agri-food sector. Although the raw material, cereals, for example, mainly come from France. The energy used to make products comes from a foreign country.” Indeed, in 2022, France imported nearly 98% of its oil from Africa or the Middle East, 98% of its natural gas from Norway, the Netherlands or Algeria. And all its coal from Australia, South Africa and Colombia.“There is always a need for exchange with foreign countries for almost all production. Foreign trade is based on the principle of the theory of comparative advantages. Therefore, each state specializes where it is least bad. It is this relative specialization that allows the global enrichment and economic growth of France”, specifies the economist.

Expertise in agri-food and finance

Globalization does not necessarily mean the end of the country’s economic independence. France, recalls Philippe Crevel, is “specialized” in many areas and has a “strong reputation and attractiveness”. “Among themFrance’s areas of specializationThere is the agri-food sector with exporting companies like Danone, as well as the aeronautical and naval industries, with the construction of cruise ships. Our country is also recognized for its specialization in the financial field. BNP Paribas is the leading bank in Europe and Axa is one of the world’s largest insurance companies. The tourism sector also contributes greatly to the French economyattracting 90 million foreign tourists each year, thanks to renowned companies like Accor or ClubMed.

The challenges of economic sovereignty

In theory, to achieve “viable” economic independence, it is necessary for the country to have the capacity to produce raw materials locally, to master production technologies and it is necessary above all, sufficient domestic demand to support the industry without depending on exports. However, in the case of France “achieving complete independence remains utopian due to the need to import certain raw materials and technologies”, points out Philippe Crevel.

Indeed, if some advocate economic sovereignty, in practice, “producing the maximum number of goods in France is extremely difficult to implement in a real-time economy with the breakdown of value chains and with the desire to maintain or even increase purchasing power. In addition, it generates additional costs,” explains the specialist. This results in price increases which directly impact the purchasing power of households., forced to pay more for goods that they could have obtained at a lower cost. “Take the example of growing protectionism around Chinese electric cars. The consequence of these measures is an increase in the prices of electric vehicles in France.. Domestic manufacturers, supported by government-imposed customs duties, adjust their prices to those of Chinese cars, which does not encourage lower prices. Ultimately, it’s consumers who suffer.”

What is essential, it’s not so much total autonomy, but rather the diversity of suppliers. The problem lies in dependence on a single country. If the latter decides to cut off supplies, this poses a serious problem. It is therefore crucial to have multiple sources of supply. It is in this diversity that we must invest,” explains Philippe Crevel.

International trade, a balancing act

Free trade also raises another issue linked to greenhouse gas (GHG) emissions. Importing and exporting products from the other side of the globe has an environmental cost, which is why the government has proposed, in 2023, the draft energy sovereignty law aimed at reducing its GHGs by 50% by 2030. However, these economic exchanges are important, develops the economist, since they “make it possible to develop growth in the poorest countries of Mercosure, Latin America, or Africa.” For him, we have to find a “fair balance between world trade”which is an important growth engine, and “reducing greenhouse gas emissions”. “Perhaps it would be better to focus on reducing emissions from ships and planes rather than limiting global trade. There are economic, social and geopolitical trade-offs to be put in place”, he concludes.

This may also interest me:

⋙ Energy saving: how do I know the off-peak hours in my municipality?

⋙ France, world champion of roundabouts

⋙ The ranking of the most populated cities in France

⋙ Is France the champion of public holidays?



PREV 70. Geburtstag von Gianna Nannini: 7 Fakten über die Sängerin – News
NEXT at what time and on which channel to watch the fight?