I remember getting into a discussion with fairplay in which I thought he underestimated the importance of the us consumer on france and germany. It seems that French tourism particularly and the economy on the whole is really hurting because of the missing american dollars. Apparently americans spend a great deal more per person than europeans when traveling and as predicted the us imports of french stuff are very important to the french economy. We see that the french business leaders and tourism guys are getting very shaken up. Perhaps it is time for the French to kiss a little U.S. butt. As predicted money speaks louder than words and I predict there will be a little sucking up or a new french government. It couldn't happen to nicer more humble group than the French. Mais Oui, we will rule the new world order we will make an alliance with the russians and germans and gut the U.S. Yeah but we need the dollars.
Well, overall France is a net exporter, a little less export is not critical. The share of the exports to the US is marginal, anyway. BTW, the US are in net deficit in this respect. France also receives more foreign investment than any other OCDE country. It receives more than the US(which is 4 times demographically larger, and incredibly geographically larger). Regarding the core businesses like military technologies, France still rules. Guess who got the contract to rebuild the US air defense system while the Iraq war was going on ? a French company. Same thing in the UK, another major contract won by Thales. By the way, which group supplies the food to US troops ? A French group again. So, if our companies continue to win contracts in such unfavorable conditions, it might mean something about the quality of their services... Regarding, oil, some countries are seeing France as a much better alternative to extract their oil than the USA. Some invited France to come in, officialy. So, this oil thing in Iraq has good sides. BTW, which company got the first barrel of oil from 'new' Iraq ? Total, French company. In an overall perspective the efficiency of Russia as an oil exporter might provide a huge relief in this matter. Anyway, France rules the nuclear field and exports energy to neighbouring countries. A brownout or blackout was something that existed in France a century ago, but has been unheard of for decades. Electricity is usefull, it is what powers our TGVs, the fastest trains worldwide. So were might be the economical problem ? 1) Exports of wines and typical French food 2) Tourism Both work in two sides, France is appearing much more popular to other countries worldwide. So, the wines exporter might be whining, but it is just a market share thing, nowhere near a major problem. Regarding tourism, well, France is the 1st receiver of tourists on a worldwide basis, and will probably stay unchallenged until the end of times. Less Americans means less people hopelessly trying to find a McDonalds or Fatburger on the Croisette. The Russians and Japanese easily compensate, they REALLY spend money and dont ask for rebates. So, well, if I was an American I would really mind my own business, and dont go expressing joy at the idea that some wine exporter might lose a bit of market share. OHLC
Trade Surplus By becoming more open to the rest of the world since 1945 and casting aside its traditional protectionist attitudes, France has remained one of the most important players in the world economy. It is today fully engaged in globalisation and its economy is growing increasingly international, a factor reflected by the substantial growth in trade. France accounts for over 5% of world GDP, making it the country with the fourth largest GDP, behind the USA, Japan and Germany. It is now responsible for 6% of world trade, second only to the USA for services and agricultural exports and the fourth largest exporter of industrial products. France is also one of the leading countries for outward investment and the third largest destination for inward investment. After recording a deficit for fifteen years, France regained a positive trade balance in 1992, when exports exceeded imports by 31 billion francs (US$5 billion dollars). Since then, the surplus has considerably increased, reaching 122 billion francs (US$20.3 billion) in 1996, 173 billion francs (US$28.8 billion) in 1997 and 124 billion francs (US$17.7 billion) in 1999. This performance appears to be solid and lasting. In 1992 and 1993, the upturn had looked vulnerable as it was linked to a significant fall in imports resulting from a slowdown in the economy. But since then the trade surpluses have continued, despite consistent growth in goods purchased from abroad: the value of imports rose from approximately 1,100 billion francs (US$189.3 billion) in 1993 to 1,720 billion francs (US$245 billion) in 1998. So it is clearly a structural rise in exports, which has put France firmly in the black as regards external trade in goods. Office and industrial equipment is the sector whose overseas sales have contributed most to France's healthy trade balance, especially in the fields of aircraft construction, office machines and professional electronic equipment and industrial machinery. Food products (in which there has traditionally been a trade surplus), the defence industry, luxury goods, cars and other means of land transport also make a major contribution to the surplus. In the last few years, there have also been comfortable surpluses in pharmaceuticals and personal hygiene products sold in pharmacies. France's largest deficits are in energy products (-80 billion francs [-US$13.3 billion]), minerals, tropical food products and products of its traditional industries (textiles and clothing, leather and hides, shoes, etc.). If trade in financial and other services (especially tourism) is added to that of trade in goods, France has a substantial balance of payments surplus. There was a positive balance of over 230 billion francs (US$38.3 billion) on France's current account in 1997, once figures for trade in services and investment income had been added to the balance of trade. Europe, France's Leading Trading Partner 78% of French trade is with the rich OECD countries and 62% with its EU partners (50% with other euro area countries). Europe has accounted for an ever increasing share of France's foreign trade over the last few decades (up almost 20% since the 1960s). So the European enterprise has created a genuinely dynamic market, from which France has benefited, since its balance of trade with EU countries shows a large surplus - in the region of 88 billion francs (US$14.6 billion) in 1997. France's five largest customers are its closest European neighbours: Germany, United Kingdom, Italy, Belgium-Luxembourg and Spain. These countries are also France's largest suppliers, with the exception of Spain, overtaken by the USA. Germany has long been France's leading trading partner, currently accounting for 16.3% of total French foreign trade, ahead of Italy (9.6%) and the UK (9.2%). In 1996 and 1997, France's chronic trade deficit with Germany was reversed. Outside the EU, France has three main trading partners: the USA and Japan, with both of which it has a trade deficit, and Switzerland, with which it has a large trade surplus. Trade with non-OECD countries accounts for only 20% of France's foreign trade, of which over 4% is with East European countries and Russia. Developing countries in Asia, Africa and Latin America account for 14%, less than with Germany alone. From these countries, France chiefly imports energy products, mineral products and raw materials of agricultural origin, together with cheaply produced consumer goods. Exports to these countries are mainly of plant and machinery, consumer durables and agri-foodstuffs. France's balance of trade with these countries varies fairly widely. It is in deficit with China, Russia (except in 1995 and 1997) and South-East Asia, but is positive with Africa, Latin America and the Middle East (with the exception of certain states in these regions, Saudi Arabia and Nigeria, with which it has a significant and chronic deficit due to its oil imports). Trade is rapidly increasing with East European countries and France's balance of trade with these countries became positive in 1996 and remained so in 1997. Increasing internationalisation of the French Economy France's exports account for 21% of its GDP, reflecting a major internationalisation of its trade, which, while the comparable percentage is lower than in Germany (24%) is higher than in Japan (10%) and the USA (9%). The net direct investment flows are another sign of the opening-up of the economy. In 1996, the stock of French direct investment abroad was around 1,000 billion francs (US$166.6 billion) and of direct foreign investment in France nearly 750 billion francs (US$125 billion). Between 1990 and 1996, France was the third largest investor abroad, behind the USA and the UK. Worldwide, 16,000 French companies employ 2.6 million people. The country with the largest number of French companies is the USA (1,850 companies and 370,000 employees). Next come Germany (1,100 companies and 224,000 employees), the UK (1,200 companies and 221,000 employees) and Spain (1,000 companies and 218,000 employees). In fact, 45% of all employees of French companies outside France work within the EU. Of developing countries, Brazil has by far the largest number of French companies (in seventh place, behind Italy), but in Latin America the French presence is stagnant, as in Africa, where, although there is a long history of French companies setting up subsidiaries, it has hardly increased at all. By contrast, in the fast-growing Asian economies, France has made a major impact, with French companies increasing their workforce by over 60% between 1990 and 1995. Similarly, in Eastern Europe and the former Soviet Union, the number of employees of French companies was up by 57% over the same period. At the same time, over 10,000 companies in France, of which half are in the Ile-de-France region, which includes Paris, are foreign-owned. On the industrial front, recent investment has mainly been in growth sectors such as telecommunications, electronics, chemicals and pharmaceuticals and, in the commercial and services area, in financial services, hotels and catering and leisure activities. The country with the highest investment in France is the USA, followed by the UK, the Netherlands, Germany and Belgium. Recruitment by foreign-owned companies plays an important role in reducing high levels of unemployment in France. At present, such firms are creating about 20,000 jobs per year, compared with an average of 10,000 during the 1980s. -------------------------------------------------------------------------------- Source: Profile of France, French Ministry of Foreign Affairs
U.S. Trade Deficit Endangers the American Economy Alan Tonelson Wednesday, February 26, 2003 I'm with President Bush on the Iraq war issue, but I have to confess to some wage-the-dog-like thoughts recently. Of course, it's outrageous to think that the President would launch a war to gain political advantage at home or divert attention from the sputtering economy. But Bush is certainly lucky that the Iraq crisis heated up last week, just as the year-end 2002 U.S. trade figures came out. Because they were atrocious. The raw numbers are bad enough. Last year, as U.S. economic growth wheezed along at a 2.4 percent rate that everyone considers unsatisfactory, the trade deficit shot up by 21.5 percent, to $435.2 billion. U.S. exports fell 2.5 percent, despite more than a decade of breakneck, NAFTA-like globalization. Foreign trade barriers remained high, growth most everywhere else remained anemic, and U.S. and other multinational companies focused most of their efforts on selling to American, not foreign customers. Yet even though the U.S. economy was stumbling, U.S. imports surged ahead by 3.8 percent -- nearly 60 percent faster than overall growth. And as foreign observers love to point out, many of these imports came from the foreign factories of U.S. multinational companies. As usual, the goods sector of the economy performed miserably on the trade front, with its deficit growing nearly 13.4 percent in 2002, to reach $484.2 billion. And manufacturing led the way down, registering a deficit of $373 billion -- 15.3 percent higher than in 2001. But a big surprise in the trade numbers was the shellacking taken by America's service sector, which supposedly represents the future of the American economy. It has always been looney to think that exporting services could make up for the trade-induced growth, job, and wage losses suffered by American goods producers, and especially manufacturers. Most service industries and companies, after all, aren't tradeable beyond borders or even city lines. They're locally oriented businesses ranging from restaurants to retail stores to medical offices and utilities. That's why America's combined two-way goods trade is nearly four times greater than its combined two-way service trade. Even so, the service sector's trade accounts worsened markedly during 2002. Exports were up four percent, but imports rose 14.7 percent. As a result, the service trade surplus shrank by fully 22.6 percent last year, to $49.1 billion. This represents the lowest level since 1991, well before anyone had heard of the New Economy. If these industries are really America's best hopes for future prosperity, we could be in even worse trouble than we realize. For as standard international trade theory teaches (correctly) what a country trades most successfully, it will eventually produce most successfully. To put these 2002 figures in perspective, in 1987, when everyone but doctrinaire free-marketeers worried that the United States was facing major competitiveness problems, the trade deficit hit a pre-New Economy peak of 3 percent of the overall economy. In 2002, this figure stood one-third higher, at more than 4 percent of gross domestic product. And if you adjust for inflation, as has economist Charles W. McMillion of MBG Information Services, the deficit now stands at 5.3 percent of the economy -- compared with its previous 1987 inflation-adjusted peak of 2.8 percent. Measuring the deficit as a share of the whole economy is critical because it indicates how sustainable America's foreign debts are. Last fall, the Federal Reserve published a study showing that most countries run into major financial trouble when their overall international deficits hit four percent of gross domestic product. In other words, these countries' foreign creditors begin fearing that their debts have become so high that full repayment is no longer possible. And the creditors become much less willing to continue lending. Sometimes they cut off the credit supply altogether, and even start selling the assets they hold in the debtor country, including their stockpiles of its currency. And other creditors tend to follow suit. If you're curious about how this rush for the doors can end, take a look at the economic devastation in Argentina. Of course, the United States isn't Argentina. Its national finances are in much better shape, and its assets and currency will long have a strong underlying appeal to investors even with today's towering U.S. debts. America is correctly seen as geopolitically secure, politically stable, and economically productive. The return on U.S. investments is still impressive, and the dollar still serves as the world's money. So greenbacks are still needed to buy a critical mass of traded goods and services (including oil). Essentially, no one can know just when America's trade deficits and foreign debts will reach the tipping point in investors? minds. But here's what we know for sure: First, the higher these deficits and debts become, the closer we get to that point. Second, the Bush administration's trade policy is bringing this day ever closer -- by unilaterally offering to open the U.S. market to prospective allies in the Iraq/anti-terror campaign, and by pursuing a trade agenda focusing on low-income countries that can only become major suppliers to the U.S. market, not major customers of U.S. products. A responsible trade policy should be trying to take the nation off this road to financial ruin, rather than speed along ever faster. So would a politically smart trade policy. Because even in a world full of dangers, the president will have to turn his attention homeward before too long. Or does he think he can ignore indefinitely an electorate urgently needing more growth and better jobs? -------------------------------------------------------------------------------- Alan Tonelson is a Research Fellow at the U.S. Business & Industry Educational Foundation and the author of The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade are Sinking American Living Standards (Westview Press).
Hey that is really good info guys but not relevant to my point. I could go to my chamber of commerce and cut and paste a business flyer too. The qeustion --is France about to drop into recession. Yes or no. With the french economy hanging above recession by its finger nails and its very large reliance on the american tourist, the French business people are quite worried. To help you answer my question, I point out in the first quarter the above mentioned financial jaugernaut grew at a whopping .3 (annualized?) percent and the quarter previous to that the French economy contracted. Now with Americans choosing not to use French products and with tourism down 25% it is predicted the French economy could go negative again. Consequently my prediction that there will be some serious ass kissing. But of course I could be wrong. And French pride may cause the French to slide into a massive recession. And again you seriously underestimate the importance of the american dollar in the French economy. I just heard on CNBC yesterday that U.S. visits are down so significantly that the hotels in Paris are seriously hurting. And that the 25% drop is made even more significant because the Ameirican tourists outspends the Dutch 8-1 and outspends all other Europeans by a large margin. By the way my inlaws and relatives who are Dutch and visiting laughed hard at this report and said it was true from their experience.
And I think you seriously overestimate the size of this supposed American boycott. I mean how much Beaujolais do they drink at NASCAR events anyway??
Guidelines for American Tourists in France The following advisory for American travellers heading for France was compiled from information provided by the US State Department, the Central Intelligence Agency, the US Chamber of Commerce, the Food and Drug Administration, the Centers for Disease Control, and some very expensive spy satellites that the French don't know about. General Overview France is a medium-sized foreign country situated in the continent of Europe. It is an important member of the world community, though not nearly as important as it thinks. It is bounded by Germany, Spain, Switzerland and some smaller nations of no particular consequence and with not very good shopping. France is a very old country with many treasures, such as the Louvre and EuroDisney. Among its contributions to western civilization are champagne, Camembert cheese and the guillotine. Although France likes to think of itself as a modern nation, air conditioning is little used and it is next to impossible to get decent Mexican food. One continuing exasperation for American visitors is that the people wilfully persist in speaking French, though many will speak English if shouted at. As in any foreign country, watch your change at all times. The People France has a population of 54 million people, most of whom drink and smoke a great deal, drive like lunatics, are dangerously over sexed, and have no concept of standing patiently in line. The French people are in general gloomy, temperamental, proud, arrogant, aloof, and undisciplined; and those are their good points. Most French citizens are Roman Catholic, though you would hardly guess it from their behavior. Many people are communists, and topless sunbathing is common. Men sometimes have girls' names like Marie, and they kiss each other when they hand out medals. American travellers are advised to travel in groups and to wear baseball caps and colorful trousers for easier mutual recognition. Safety In general, France is a safe destination, though travellers are advised that, from time to time, it is invaded by Germany. By tradition, the French surrender more or less at once and, apart from a temporary shortage of Scotch whisky and increased difficulty in getting baseball scores and stock market prices, life for the visitor generally goes on much as before. A tunnel connecting France to Britain beneath the English Channel has been opened in recent years to make it easier for the Government to flee to London. History France was discovered by Charlemagne in the Dark Ages. Other important historical figures are Louis XIV, the Huguenots, Joan of Arc, Jacques Cousteau and Charles de Gaulle, who was President for many years and is now an airport. Government The French form of government is democratic but noisy. Elections are held more or less continuously, and always result in a run-off. For administrative purposes, the country is divided into regions, departments, districts, municipalities, cantons, communes, villages, cafes, booths, and floor tiles. Parliament consists of two chambers, the Upper and Lower (though, confusingly, they are both on the ground floor), whose members are either Gaullists or communists, neither of whom is to be trusted, frankly. Parliament's principal preoccupations are setting off atomic bombs in the South Pacific, and acting indignant when anyone complains. According to the most current State Department intelligence, the President now is someone named Jacques. Further information is not available at this time. Culture The French pride themselves on their culture, though it is not easy to see why. All their songs sound the same, and they have hardly ever made a movie that you would want to watch for anything but the nude scenes. And nothing, of course, is more boring than a French novel. Cuisine Let's face it, no matter how much garlic you put on it, a snail is just a slug with a shell on its back. Croissants, on the other hand, are excellent, though it is impossible for most Americans to pronounce this word. In general, travellers are advised to stick to cheeseburgers at leading hotels such as Sheraton and Holiday Inn. Economy France has a large and diversified economy, second only to Germany's in Europe, which is surprising because people hardly work at all. If they are not spending four hours dawdling over lunch, they are on strike and blocking the roads with their trucks and tractors. France's principal exports, in order of importance to the economy, are wine, nuclear weapons, perfume, guided missiles, champagne, high-caliber weaponry, grenade launchers, land mines, tanks, attack aircraft, miscellaneous armaments and cheese. Public Holidays France has more holidays than any other nation in the world. Among its 361 national holidays are 197 saints' days, 37 National Liberation Days, 16 Declaration of Republic Days, 54 Return of Charles de Gaulle in Triumph as if he Won the War Single-handed Days, 18 Napoleon Sent into Exile Days, 17 Napoleon Called Back from Exile Days, and 112 France is Great and the Rest of the World is Rubbish Days. Other important holidays are National Nuclear Bomb Day (January 12), the Feast of St. Brigitte Bardot Day (March 1), and National Guillotine Day (November 12). Conclusion France enjoys a rich history, a picturesque and varied landscape, and a temperate climate. In short, it would be a very nice country if it weren't inhabited by French people. The best thing that can be said for it is that it is not Germany. A Word of Warning The consular services of the United States government are intended solely for the promotion of the interests of American businesses such as McDonald's, Pizza Hut and the Coca-Cola Corporation. In the event that you are the victim of a crime or serious injury involving at least the loss of a limb, report to the American Embassy between the hours of 5.15 am and 5.20 am on a Tuesday or Wednesday, and a consular official who is supremely indifferent to your plight will give you a list of qualified dentists or something similarly useless. Remember, no one ordered you to go abroad. Personally, we always take our holidays at Miami Beach, and you are advised to as well. Thank you and good luck.
I don't care if the importance of the US dollar in France is over or underestimated........ the bottom line is the thought of the pompous French kissing ass makes me giddy Vega