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France - United States Trade Relations. Contents. I – A strong trade relationship a) Bilateral trade : « top ten » partners b) Investments : the heart of our economic ties II – France : a major EU partner III – Trade policy : the importance of the Transatlantic Partnership . Part I.

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France united states trade relations

France - United States Trade Relations

Embassy of France - Trade


Contents
Contents

I – A strong trade relationship

a) Bilateral trade : « top ten » partners

b) Investments : the heart of our economic ties

II – France : a major EU partner

III – Trade policy : the importance of the Transatlantic Partnership

Embassy of France - Trade


Part i
Part I

A strong trade relationship

Embassy of France - Trade


Big figures 270 billion and more
Big figures : $270 billion and more

  • Two-way trade in goods : over $50 billion per year (

  • France, 2004 : 9th export market for US goods, and 9th provider

  • Trade in services : $20 billion per year

  • Investments (2003 stocks) : $143 billion of French direct investment. France is the #5 investor in the US… compared to only $48 billion of US direct investment

Sources : US DOC, BEA

Embassy of France - Trade


I a bilateral trade
I- a. Bilateral Trade

2004 : US imports of goods from France $ 32 billion; US exports $21 billion

Source : US Census Bureau

Embassy of France - Trade


N b the statistical discrepancy
N.B. : the statistical discrepancy

Statistical tendencies remain a reliable tool and records of total trade volumes are similar.

But 2004 US-France trade balance according to :

  • French Customs = US deficit Euros -644 million

  • US Census Bureau = US deficit $ -11 billion (US imports overestimated with temporary imports accounted as permanent ; US exports understimated because of loose record).

Embassy of France - Trade


Also rising us deficit with the european union 15
Also rising US deficit with the European Union-15

2004 : US imports $ 270 billion; US exports $169 billion

Source : US Census Bureau

Embassy of France - Trade


Us imports from france
US imports from France

Contrary to common perception :

  • Agribusiness products ($1,6 billion) = 5,6 %

  • «Traditional» goods : wine/spirits ($1 billion, less than 4%), water, fragrances & cosmetics, arts & antiques = 15%

  • Aircraft/spacecraft ($4,2 billion) = 14,5%

  • Reactors, machinery, appliances = 14,6%

  • Chemicals = 23%

Source : US Census Bureau

Embassy of France - Trade


Us imports from france1
US imports from France

Machinery/transport. = 40% of US imports from France

Source : US Census Bureau

Embassy of France - Trade


Us exports to france
US exports to France

Machinery/transport. = 55% of US exports to France

Source : US Census Bureau

Embassy of France - Trade


Trade rising in 2004
Trade rising in 2004

  • 2004 (US Census Bureau)

    US exports to France : $21 billion => +24%

    US imports from France : $32 billion => +8%

    Trends :

  • slowdown of French Aircraft/spacecraft sales (-3%) contrary to sectorial US sales (+35%);

  • French wine sales dropped -3% in value (Source : fédération des exportateurs de vins et spiritueux)

Source : US Census Bureau

Embassy of France - Trade


Services us french trade

Source : US Bureau of Economic Analysis

Services: US-French trade

  • 2003 : US exports $11 billion; US imports $10,2 billion ; US surplus $800 million

Embassy of France - Trade


I b investments the heart of our economic ties
I- b. Investments : the heart of our economic ties

Source : US Bureau of Economic Analysis

Embassy of France - Trade


France a major investor in the us
France : a major investor in the US

  • 2003 stocks : $143billion French Foreign Direct Investment in the US…

  • …that is 3 times the amount ($48 billion) of US investment in France

  • France is #5 investor in the US : more than 10% of all FDI in the US

Source : US Bureau of Economic Analysis

Embassy of France - Trade


A strong and diversified presence
A strong and diversified presence

  • More than 2 500 subsidiaries of French firms operate in the United States

  • Their activities provide 515 000 jobs (2002, BEA)

  • Generated turnover figures, over $160 billion in 2003, are tantamount to five times our exports to the U.S.

Source : US Bureau of Economic Analysis

Embassy of France - Trade


French investments in the us 2003 stocks
French Investments In The US (2003 stocks)

Finance + Information + Chemicals + Machinery = 62%

Source : US Bureau of Economic Analysis

Embassy of France - Trade


2003 investment inflows outflows
2003 Investment Inflows & Outflows

  • Sharp decrease in US FDIs to France ($1,5 bln against 3,3 in 2002) but increase foreseen in 2004

  • Slight decrease of French FDIs in the US : $5,1 bln

  • Inflows : France remains #3 country for worlwide investment inflows ($46 bln). Inflows in the US at their lowest ($29 bln) since 1992.

  • Outflows : US first investor worldwide ($152 bln), France #3 ($57 bln)

Source : BEA, UNCTAD

Embassy of France - Trade


Part ii
Part II

France : a major EU partner

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Us eu trade in 2004
US/EU Trade in 2004

  • $ 440 billion trade relationship ; France accounts for about 1/6th of this amount.

  • US imports = $ 270 billion, US exports = $ 169 billion

  • First supplier of the US with a market share of 18%, before Canada (17%), China (13%), Mexico (10%) and Japan (9%)

  • A rising US bilateral deficit of $ 101 billion

    (23 times the 1993 amount)

Source : US Census Bureau

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The eu is the 1 investor in the usa
The EU is the #1 investor in the USA

  • $ 855 billion in stocks 2003 = 62% of all foreign investments in the U.S.

  • In 2003, France #4 European investor (#3 in 2002) behind the UK, Germany and the Netherlands

  • $ 963 billion US stocks = 54% of all US foreign investments

  • Each partner employs about 4 million people in the other

Source : US Bureau of Economic Analysis

Embassy of France - Trade


Top investors in the us 2003 stocks
Top investors in the US, 2003 stocks

Five of the 8 top investors in the US are EU members

Source : US Bureau of Economic Analysis

Embassy of France - Trade


Part iii
Part III

Trade Policy :

The importance of the Transatlantic Relationship

Embassy of France - Trade


The eu and the us are each other s main trading and investment partner
The EU and the US are each other’s main trading and investment partner

  • A bilateral framework to reduce barriers to trade and investment : The New Transatlantic Agenda (1995) and the Transatlantic Economic Partnership (1998) & PEA (2002)

    • Annual EU-US summit and regular high level meetings

    • TABD, TACD, TALD

    • Mutual recognition agreements, Customs cooperation (CSI)

    • Ongoing negotiations : “Open Sky Area”, APIS-PNR, Financial Markets dialogue, wine

    • 2005 : stakeholders came forward with proposals to strengthen the transatlantic economic partnership

Embassy of France - Trade


The transatlantic trade disputes minor irritants
The Transatlantic trade disputes : minor irritants investment partner

  • WTO disputes affect less than 2% of transatlantic trade

    • Resolution of certain disputes : Antidumping Act of 1916, geographical indications, “rice” conflict

    • FSC/ETI: US passed American Jobs Creation Act but grandfathering and transition clauses still unacceptable for EU

    • US Congress reluctant to comply with WTO rulings (Byrd Amendment, “section 211”)

    • Ongoing discussions : Airbus/Boeing; GMO; EU enlargement

    • The US requested a new panel against the EU (customs procedure)

  • Increasing difficulties of the regulatory cooperation between Parliaments and independent regulatory agencies (EU-US Veterinary Equivalence Agreement, Sarbanes-Oxley Act)

  • What balance between security and trade (Container Security Initiative, Bioterrorism Act) ?

Embassy of France - Trade


Iraqi crisis us boycott of french products
Iraqi crisis : US boycott of French products ? investment partner

  • US-France bilateral trade slowdown in 2003 was not related to the boycott, but to macro-economic factors : weak growth in France, appreciation of the Euro, worldwide crisis in the aeronautic sector

  • However the boycott stressed structural difficulties in two sectors : wine and tourism

    • 2003 Wine exports to the US decreased by 12% in volume (French statistics). Structural competition of Australian, Italian, Californian and Chilean wines (French market share of 14% in 2003, fell from 25% in 1998)

    • Estimated drop of US visitors in France of -14% in 2003. But estimate of +13% in 2004 (3 millions American visitors). France is #2 travel destination in Europe (after the UK, before Italy)

  • France’s image in the US has been deeply damaged, although recovering somewhat : 80% favorable in Feb 2002, 34% in March 2003, 47% in Feb 2004, 51% in Feb 2005 (Gallup).

Embassy of France - Trade


Free trade agreements
Free Trade Agreements investment partner

  • The EU has concluded more free trade agreements :

    • 28 FTAs concluded

    • On going negotiations with 15 countries (including countries of MERCOSUR and of the Gulf Cooperation Council)

  • A new momentum for bilateral and regional FTAs in the US (« competitive liberalisation ») :

    • 10 FTAs concluded : Israel (1985), NAFTA (1994), Jordan (2001), Chili and Singapore (2003), Australia, CAFTA/Dominican Republic, Morocco and Bahrain (2004)

    • On going negotiations with the 34-nations FTAA, bilateral negotiations with Southern African Custom Union, Panama, Andean Region, Thailand

    • Committed to begin negotiations with United Arab Emirates (Egypt still uncertain)

Embassy of France - Trade


Us new ftas account for a small share of us trade
US new FTAs account for a small share of US trade investment partner

  • Trade with existing FTA partners account for one third of total trade flows both for the EU and the US

  • But in 2004 US trade with the new (FTAs not yet implemented) and potential FTA partners (FTAA, SACU, Thailand, etc…) accounted for only 8% of total US trade

Source : US Census Bureau

Embassy of France - Trade


France united states trade relations

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Auteur : Mission Économique

Adresse : 4101 Reservoir Road, NW

WASHINGTON, DC 20007-2173

ÉTATS-UNIS

Rédigée par : Michel ESTEVES

Revu par : Jean-François BOITTIN

Date de parution : 4 avril 2005

Version originelle 28 septembre 2004

Version n°3 du 1er avril 2005

Embassy of France - Trade