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France is the largest Western European country, home to 16% of the EU’s population. Currently at the heart of the EU’s geography (though EU expansion will change that), France has undergone a small economic renaissance in the last five years, due in part to privatisation and reforms of decentralisation and deregulation in the 1990s, as well as entry to the euro currency. Change is not always easy, however. The economy is sluggish, with unemployment rising, investment and consumer spending down. President Chirac wants tax cuts; Prime Minister Raffarin wants pension reforms that have met with massive public protests; the EU wants balanced books; and the world wants agricultural reform that could curb the EU’s Doha-distorting Common Agricultural Policy.
Trade with Australia is buoyant, however – a new record in 2002 of A$4.7bn, putting France 15th among Australia’s trading partners. With a highly diversified economic base, France holds key strengths in world markets in many sectors, including automotive, agro-industry, luxury goods (think Champagne, perfume, fashion), pharmaceuticals, chemicals, environmental industries and aeronautics. High-tech sectors such as information technologies and biotechnology industries are also a driving force of the French economy, creating new businesses and jobs that will sustain further growth during the next decade. Tourism. France is the world’s most popular global tourism destination, attracting about 75m visitors in 2000. France earns more from tourism than from food and drinks exports.
Environment. France is third in the EU in terms of forested land, behind only Sweden and Finland. The government has allocated €22.11bn to the protection of the environment, three-quarters of which goes on waste-water management and waste disposal. Food industry. France’s largest industrial sector by turnover (ahead of automotive and chemicals), the food industry was responsible for employing more than 418,000 people in 2001. Since 1980 turnover has more than doubled and exports have increased nearly four-fold. Automotive. France is the world’s fourth largest car builder, with 22% of Europe’s total production, generating a turnover of more than €92bn. Telecoms. Liberalisation of telecommunication services in 1998 boosted revenue to €25bn by the end of 2001 – up 10% on 2000. France’s internet market is growing even more rapidly. Australia’s DFAT notes that while the size and dynamism of the French market suggests that Australian companies could find new opportunities, regulatory obstacles in labour and product markets are common. Austrade Paris |
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