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FRANCE AND THE UNITED STATES: A STRONG ECONOMIC RELATIONSHIP
U.S. economic ties with France are extensive and mutually beneficial. France is the 9th largest merchandise trading partner for the United States and the sixth largest for trade in services. While trade in goods and services receives most of the attention in terms of the commercial relationship, foreign direct investment and the activities of foreign affiliates can be viewed as the backbone of the commercial relationship. Sales turnover of U.S.-owned companies operating in France and French-owned companies operating in the United States outweighs trade transactions by a factor of five. France is technically the 5th largest foreign investor in the U.S. ($143 billion, 10,4% of total FDIs), but is virtually tied with Japan, Germany and the Netherlands at the 2nd position.
- Foreign direct investments (FDI) are the cornerstone of the strong French-American economic relations. France has a key role in the economic growth fostered by European investment in the United States: there are at least 2,400 French subsidiaries in the U.S., providing more than 500 000 direct jobs and generating an estimated $160 billion turnover (mainly from the 100 largest of these). U.S. subsidiaries in France provide about 580 000 direct jobs, with a $135 billion turnover (2001).
According to UNCTAD, in 2005, France was the second largest investor in the world with 15 % of FDI world-wide. Therefore it not surprising that France is , with Japan, Germany and the Netherlands, one of the major investors in the United States (after the U.K., which accounts for 17% of all FDI in the country) in terms of stocks ($160 billion in 2005 ). The U.S. is the top destination for French investments worldwide. The French investment stock in the U.S. has increased 4-fold over the past ten years! These investments are concentrated in manufacturing (40%, of which chemicals 16% and machinery 15%), the financial sector (19%), the information sector (18%) and the wholesale trade (11%). The main French acquisitions in the US during recent years took place in high-tech ( Schneider Electric/ Juno Lighting and BETI technologies), marketing services (Taylor Nelson Sofres/NFO WorldGroup Inc.), and the chemicals industry (Rhône Capital LLC/Alcoa Specialty Chemicals).
In 2005, the U.S. ranked first among investors in France, with an 18 % share (ahead of the U.K and Germany ), or 60 billion Euros in stocks, concentrated in real estate and business services (45%), the manufacturing sector (25%), and the financial sector (14%). Over the last decade, the amount of U.S. stocks in France has doubled.
- While the strength of our relationship is obvious in terms of investments, it pertains almost as strongly to trade. France is a top-ten trade partner of the United States. In 2006, according to the French Customs Service, U.S. imports of goods from France were valued at 26,4 billion Euros (2% of all U.S. imports), and U.S. exports to France at 25.3 billion Euros. France is America’s tenth-ranked supplier worldwide, and its tenth client. The U.S. is France’s sixth-ranked client and its third supplier.
France’s exports to the U.S. are mainly industrial products (38%) of which aeronautics sector (airplanes, reactors and machines) represents 21 % . Consumer goods make up 19% of French exports. Food products (10%), including wines/spirits (4%), represent a far smaller proportion . Due to insufficient refinery capacity in the US, energy products represent 8% of French exports to the US.
All of these exports contribute to U.S. economic growth: numerous jobs in the logistics and distribution sectors on both sides of the Atlantic are greatly dependent on outside trade. Furthermore, a substantial share of this bilateral trade takes place between the national firms and their affiliates: according to the U.S. Census Bureau, more than 60% ($14 billion) of U.S. exports to France were made by French subsidiaries.
For further information
Embassy of France in the U.S. - March 7, 2007
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