France’s trade deficit falling thanks to continued economic dynamism

Foreign trade – Statement by the Foreign Affairs and International Development Ministry Spokesman

Paris, 8 April 2014

Our trade deficit for February 2014 was €3.4 billion compared with €5.9 billion in January. The trade deficit stands at €59.1 billion over the 12-month period. It stood at €67.1 billion in 2012.

This monthly total, which remains unsatisfactory, can be explained in part by a significant reduction in our imports, especially imports of energy supplies.

Our exports fell slightly (-0.2%) and stagnated over the last 12 months.

Since 2012, the slight improvement in our foreign trade performance (-€74 billion in 2011, -€61 billion in 2013) is as much due to our continued export dynamism as it is due to the decrease in imports associated with weak domestic demand. The figures published today follow this trend.

The establishment within the government of an “international division” bringing together foreign affairs, foreign trade and tourism, is aimed at improving the effectiveness of our system. It should help to improve our foreign trade performance./.

Economic diplomacy – Interview given by M. Laurent Fabius, Minister of Foreign Affairs and International Development, to the daily newspaper Les Echos

Paris, 8 April 2014

Q. – What’s your appraisal of how economic diplomacy has done?

THE MINISTER – Initial results have been obtained, but given the size of our deficit we must do better. The state’s action has helped get major contracts signed, particularly in Japan, Turkey, the United Arab Emirates, Saudi Arabia and China. This action must be extended, particularly to increase the number of our exporting SMEs – France’s main foreign trade challenge. This is up to the companies themselves, of course. But it concerns all the ministries. We also need general macroeconomic measures to foster competitiveness: the Responsibility Pact, a better functioning labour market, the funding of companies with the BPI [Public Investment Bank], the extension of our product range with support for innovation and research, and favourable taxation. The government clearly can’t usurp the role of companies, but it must help them highlight their strengths internationally. That’s what economic diplomacy is; it must be continued and extended.

Q. – What advantage do you expect to gain from the broadening of your responsibilities to include foreign trade?

THE MINISTER – The goal is clear: more effectiveness – that is, better results for our economy and for employment. Foreign trade and tourism are priorities, and are now the responsibility of the Quai d’Orsay [Foreign Ministry]. The division of our networks has often been criticized, particularly by the Cour des Comptes [Auditor-General’s Department; Audit Court] and several of my predecessors. With a simplified organizational structure, we’ll be more efficient. Of course, our ambassadors will continue to fulfil their other missions: we’re not going to abandon our responsibilities in terms of peace and security, culture, education and scientific cooperation. And Bercy [Economy Ministry] will play its full role. But there will be greater consistency between the various missions contributing to France’s influence.

Q. – How do you intend to attract foreign investment to France?

THE MINISTER – The fundamental elements of our attractiveness – our employees’ level of training, the quality of our infrastructure, the calibre of our researchers – will be central to our priorities: we’re going to continue investing in the area, and set a stable goal: nothing is worse than unstable rules. But in the shorter term, we’ll also have to act in a concrete way to facilitate the arrival of investors. The Ubifrance-Invest in France Agency merger is a step in the right direction. The Strategic Investment Attractiveness Council, convened periodically by the President, will help us. I’ve embarked on a reform of visas and a modernization of our consular network which enables procedures for our target public to be simplified. We must harness the major asset that is the positive image of the French culture and way of life. In terms of taxation – a major aspect for investors – the attractiveness requirement will have to be taken into account in each decision. In short, the combination of a generally business-friendly mindset and specific measures will enable us to make progress. Our growth very much depends on an international focus; in this respect, we must be among the best./.

Foreign Trade – Interview given by M. Laurent Fabius, Minister of Foreign Affairs and International Development, to Aujourd’hui en France/Le Parisien (excerpts)

Paris, 7 April 2014

Foreign Ministry’s new responsibilities

Q. – During the last reshuffle, you inherited – besides foreign affairs – international development. What does that cover exactly?

THE MINISTER – The Quai d’Orsay will be responsible for diplomacy in general and for European affairs, development, French nationals abroad and Francophony. On top of that, foreign trade and tourism will now come within its remit. This will allow the state’s external action to be unified under the same authority. The goal is efficiency and coherence, benefiting in particular the economic recovery – a government priority.

Q. – But until now, foreign trade has come under Bercy…

THE MINISTER – We’ll obviously work with the Economy Ministry. The duplication of the networks – Bercy and the Quai d’Orsay – has often been criticized in the past as a source of difficulties. We can’t talk about simplification all the time and not carry out reforms to that effect. Moreover, several of my predecessors and the Cour des Comptes recommended this. Look, just because our ambassadors are to spend more time on trade and tourism doesn’t mean they’ll have to spend less time on education, culture, science and strategy – France’s external action is a unified entity.

Trade deficit/support for businesses

Q. – The trade deficit amounted to €60 billion in 2013. How can the negative spiral be halted?

THE MINISTER – It’s a fact that the trade deficit is too high. The key is to improve business competitiveness: this is the aim of the Responsibility Pact. The government obviously has no intention of usurping the role of businesses, but it can and must help them. Extending the range of our products by supporting research and innovation, improving the operation of the labour market, avoiding onerous taxes. Apart from all these general measures, we need targeted action to support our businesses on the international markets and to increase the number of our exporting businesses, particularly SMEs. This is the role of economic diplomacy, which is going to be ramped up. We also have to take action vis-à-vis our attractiveness, to attract more capital, entrepreneurs, tourists, students and researchers to France, in order to nurture our growth, and therefore jobs. (…)./.

Published on 18/02/2016

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