This Country Commercial Guide 2009 (CCG) presents a comprehensive look at France’s commercial environment from economic, political and market perspectives. The CCGs were established by the recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi-agency task force, to consolidate various reporting documents prepared for the U.S. business community. Country Commercial Guides are prepared annually at U.S. embassies through the combined efforts of U.S. government agencies represented there.

Market Overview

France and the U.S. are long-standing, close allies.  Despite occasional differences of views, the U.S. and France work together on a broad range of trade, security and geopolitical issues. With a GDP of approximately $2.5 trillion, France is the sixth-largest economy. It has substantial agricultural resources, a large industrial base, and a highly skilled work force. A dynamic services sector accounts for an increasingly large share of economic activity and is responsible for nearly all job creation in recent years. Real GDP increased by 0.8% in 2008.  According different sources, projections for 2009 GDP would show decrease by 1 to 1.5 percent.

France is a member of the G-8, the European Union, the World Trade Organization and the OECD, confirming its status as a leading economic player in the world. France is the second-largest trading nation in Western Europe (after Germany). France ran a record-setting $79 billion deficit in calendar year 2008. Total trade for 2008 amounted to $1,249.8 billion, 75.0% of which was with EU-24 countries.

Trade and investment between the U.S. and France are strong. On average, over 1 billion dollars in commercial transactions take place between France and the U.S. every day, with the U.S. being France's sixth-ranked supplier and its sixth-largest customer. France ranks as the United States' eighth trading partner for total goods (imports and exports). U.S.-France trade in goods and services totaled nearly $100 billion 2007 and  is estimated at $ 105 billion in 2008, including one third in services and two thirds in goods.  The main trading categories are U.S. industrial chemicals, aircraft and engines, electronic components, telecommunications, computer software, computers and peripherals, analytical and scientific instrumentation, medical instruments and supplies, broadcasting equipment, and programming and franchising are particularly attractive to French importers.

The trade balance on all bilateral transactions between the United States and France can be viewed at: http://www.bea.gov/bea/international/bp

Market Challenges
Government economic policy aims to promote investment and domestic growth in a stable fiscal and monetary environment. Creating jobs and reducing the high unemployment rate through recovery-supportive policy has been a top priority. The unemployment rate in metropolitan France slipped to 7.4% in the fourth quarter of 2008. Unemployment is expected to increase in 2009.

Despite significant reform and privatization over the past 15 years, the government continues to control a large share of economic activity: Government spending, at 53 % of GDP in 2007, is among the highest in the G-7. Regulation of labor and product markets is pervasive. The government continues to own shares in corporations in a range of sectors, including banking, energy production and distribution, automobiles, transportation, and telecommunications. Legislation passed in 1998 shortened the legal workweek from 39 to 35 hours for most employees effective January 1, 2000. Recent assessments of the impact of workweek reduction on growth and jobs have generally concluded that the goal of job creation was not met. The former administration introduced increasing flexibility into the law. Under President Nicolas Sarkozy's impetus, overtime work is exempted from income taxes and payroll taxes as of October 1, 2007, a move to encourage work and to increase work time. The business community welcomed government efforts to change the 35-hour workweek, but has complained that measures are difficult to implement. The government is taking measures to make the law less rigid and is seeking to introduce more flexibility in employment contracts.

Market Opportunities
Leading non-agricultural products considered to offer "best prospects" for U.S. business in France are (in order of market size): Travel and Tourism, Aircraft and Parts, Safety and Security Equipment, Computer Services, Computer Software, Industrial Chemicals, Computer and Peripherals, Telecommunications Equipment, Water Resources Equipment and Services, Medical Equipment, Automotive Parts Equipment, Plastics, Cosmetics, Education Services, Textile, Direct Marketing and E-Commerce Business to Consumer.
The French market for food products is mature, sophisticated and well served by suppliers from around the world.  Additionally, increasing interest in American culture, younger consumers and changing lifestyles are contributing to France’s import demand for food products from the United States.  Generally, high quality food products with an American image can find a niche in the French market, particularly if they can gain distribution through stores and supermarkets that specialize in U.S. or foreign foods.  Significant market opportunities for consumer food/edible fishery products exist in a number of areas:

fruit juices and soft drinks (including flavored spring waters), dried fruits and nuts, fresh fruits and vegetables (particularly tropical and exotic), frozen foods (both ready-to-eat meals and specialty products), snack foods, tree nuts, "ethnic" products, seafood (especially salmon and surimi), innovative dietetic and health products, organic products, soups, breakfast cereals and pet foods and treats.  In addition, niche markets exist in France for candies, chocolate bars, wild rice and kosher foods that have shown rising demand.  Market opportunities for U.S. exporters also exist for oilseeds, protein meals and other feeds, as well as for wood products and grains.

Market Entry Strategy

In general, the commercial environment in France is favorable for sales of U.S. goods and services.  Marketing products and services in France is similar to the approach in the U.S., notwithstanding some significant differences in cultural factors and certain legal and regulatory restrictions.  Local partners are readily available in most sectors and product lines, although competition can be fierce.

In support of U.S. commercial interests in France, the U.S. Embassy in Paris uses the combined resources of various U.S. Government agencies to promote exports of U.S. goods and services.  It also supplies information on trade and investment opportunities, and serves as an advocate for U.S. firms.

Links to web sites outside the U.S. Government or the use of trade, firm, or corporation names within U.S. Commercial Service web sites are for the convenience of the user. Such links and use do not constitute an express or implied official endorsement or approval by the United States Department of Commerce of any private sector web site, or of the products or services of specifically identified companies or of any of the private entities that may have contributed to a U.S. Commercial Service web site.