New record for French foreign trade
The future looks bright for French foreign trade, which reinforces its position among the leading powers for world exports.
In 1995, France's balance of trade crossed the historic line of 104.5 billion francs of surplus (US$20.9 billion), an increase of more than 20 percent over 1994. Exports rose by 9.2 percent and amounted to 1,427 billion francs and imports by 7.9 percent to 1,322.5 billion francs. French exports account for 22 percent of the country's gross domestic product.
Managers at the ministry delegated to finance and foreign trade consider the steady improvement in this area as a sign of the competitiveness of French firms, their ability to adapt to foreign markets and the diversity of the offer suited to meet international demand.
The excellent performance obtained on the world markets reflects, they consider, "the dynamism and health of an economy which, over the last three years, has managed to withstand unfavorable circumstances", in particularly perturbing monetary fluctuations, outside the European Union, with the dollar, and within the Union with the lira, the pound and the peseta.
Strong growth
The year 1995 was characterized by five phenomena.
There was strong growth in the surplus in consumer durables, which rose from 16 billion francs in 1992, to more than 59 billion francs in 1995. The sale of the European aircraft Airbus 107 played an important part in this result.
The farming surplus increased to attain 20 billion francs. Cereal exports rose by 10 percent, thanks to the reopening of the Chinese market. Wine exports (up by 5 percent) followed the same pattern. Moreover, the surplus in the food processing industry was in excess of 31 billion francs. Thus, France maintains her position as the second largest exporter in the world for agricultural produce after the U.S. and she ranks in first position for processed foods.
The usual deficit in expendable consumer items fell sharply. In one year, it went down from 9 billion francs to less than 5 billion francs. This is due to the sale of pharmaceuticals and perfumery. The deficit in the electronics and domestic appliances sectors also fell considerably. However, in the automobile and transport sector, the situation was less favorable. The trade surplus, which amounted to 31 billion francs in 1994, fell to 26 billion francs.
These good results were accompanied by a lessening of the energy bill, owing to the fall in the dollar. In this area, the traditionally heavy deficit was brought down to just under 59 billion francs after 65.5 billion francs in 1994.
The geographical results of France's imports and exports reveal that her main partner is the European Union. France's trade with it is 65 percent. In 1995, intra-European trade grew more rapidly than the whole of foreign trade. The balance, which was positive for France, amounted to 37 billion francs. It beat the record of 25 billion francs recorded in 1994. France's most dynamic trade was with Germany, the Netherlands and Spain.
Dollar effect
With the rest of the Organization for Economic Cooperation and Development, France registered a deficit of 30 billion francs. According to experts, the fluctuations with this zone correspond to two different realities:
* Although French imports from the U.S. fell slightly (less than 2 percent), exports, on the other hand, dropped by 8 percent. This result is mainly due to a 30 percent fall in aeronautic deliveries and to the dollar effect.
* With Japan, the appreciation of the yen increased imports in value (more than 1 percent) but exports, particularly expendable consumer items rose by 10 percent. This brought the French deficit with this country down from 22 billion francs to 20 billion francs.
The rapid development of a whole area of Asia benefits French foreign trade. For the first time in 10 years, France recorded a surplus of more than 9 billion francs there. Exports, which had increased by 20 percent in 1994, further rose by 28 percent in 1995, and even by 46 percent for those intended for Hong Kong. The sale of Airbuses contributes largely to the result as Asia in general has become the main outlet for this European aircraft.
During the recent Europe-Asia summit in Bangkok, President Jacques Chirac announced his goal of having the French share of the Asian market rise from 2 percent to 6 percent within 10 years. The only shadow in this area comes from the worsening of the deficit with China. Imports from this country increased by 12 percent, while exports only rose by 10 percent.
What results will 1996 bring to French foreign trade? It has been noted that this year, French foreign trade has continued on its brilliant path by achieving a surplus of 18.4 billion francs in the first two months of the year.
However, unlike what happened in 1995, imports fell off considerably in January and February. According to observers, this reduction is the result of a slackening in household and industrial purchases, particularly in the area of consumer durables.
At the ministry delegated to finance and foreign trade, specialists consider that it could be just a "temporary fall", similar to the one which took place in autumn 1995, without affecting the excellent overall results.