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Export conference

Published on February 14, 2011
Speech by François Fillon, Prime Minister

Paris, February 10, 2011



Today we’re the world’s fifth-largest exporter and the second at European level, but for 20 years our global market share has been declining. Of course it must be noted that all the developed countries are seeing greater or lesser reductions in their market share. Ultimately that’s quite logical, because essentially it reflects the increasing power of the emerging economies. 30 years ago China had 1% of global exports; today she has roughly 10%. In 2009 she became the world’s top exporting power. But where the situation is more worrying for France is when we compare ourselves with the other developed countries, particularly our main partner in the Euro Area; I’m talking about Germany, of course. We now export only 40% as much as Germany, as opposed to 55% in 1999. Over the same period, our share of total exports in the Euro Area fell by some 4 percentage points, from 17.7% to 13.5%, while Germany’s rose from 29.5% to 32%. If we’d remained at the same level – 17.7% - we would today have an additional €100 billion in exports.

It was at the start of the 2000s that France’s trade balance, which was still positive, began to worsen. And we estimate that, since then, this reduction in our competitiveness has lost us 200,000 jobs in the industrial sector. This coincides with the time when we suffered the effects of the reduction in working hours, whereas Germany between 2003 and 2007 embarked on a policy contrary to ours, namely an extremely ambitious competitiveness policy. Those companies which passed the 35-hour week’s extra costs on to their customers by increasing prices lost market share. Those which didn’t do so had to reduce their margins, which had an adverse impact on their investments and their R&D efforts. (…)

The decline in our competitiveness isn’t inexorable, and we can regain lost market share. That’s the challenge of the reforms we’ve conducted and those we absolutely must pursue.


The first route is to encourage our companies to innovate. Since 2007 it’s been the goal of a very major reform: the reform of the R&D tax credit, which has given us a very powerful mechanism for encouraging investment in R&D. (…) In 2009, by eliminating the local business tax, we removed a major brake on investment, in order to make our businesses more productive and competitive. (…)

We’ve launched the “future investments” [plan] to support the knowledge economy, because competitiveness is also built over the long term, and it’s from this perspective that we must consider this very ambitious programme, which will lead us to invest just over €35 billion in all the most strategic sectors for the French economy’s future. (…)

The second route we’ve followed, in parallel, is that of easing the burdens on the French economy and helping companies keep their costs under control. Clearly, the reform of the R&D tax credit and the elimination of the local business tax have contributed to this. In 2007, by exempting overtime from tax, we alleviated the impact of the 35-hour week on labour costs, while ensuring that nine million employees could benefit fully from it to the tune of €3.5 billion a year. (…)


And for 2011, our export policy is organized around three major areas for action.

The first is opening up the markets and regulating international trade. Our companies must be able to gain access to more open foreign markets. (…)

Europe must be less naïve and much more demanding of its partners than in the past. Borders can’t be opened up in only one direction. And if certain countries close their public works contracts to our companies, there’s no reason why we should open ours to theirs. (…)

The second area for action is support for major contracts. In 2010, they were worth €21 billion, i.e. a 38% increase compared to 2009. But this marked rise mustn’t conceal the fact that our companies are facing increasingly tough competition. (…)

In the second quarter, we’re organizing a conference in Paris on this subject, which will bring together all the G20 countries. In this respect, it’s very important that the major emerging countries, too, comply with the multilateral rules on export financing. (…) But, as you know, major contracts aren’t everything. In fact they account for only a little over 5% of our exports. Among the challenges we have to take up, the most important is certainly to get more companies to export. And it’s the third central objective of our export policy. Perhaps what should concern us more than our worsening trade balance is the steady drop in the number of exporting companies. We’ve gone from 107,000 in 2000 to around 91,000 in 2010, while Germany has 400,000 exporting companies. We can’t just accept these figures. And it’s essential for our companies to gear themselves more to the international market, in more sectors. (…)

Spurred on by Christine Lagarde, Anne-Marie Idrac and now Pierre Lellouche, the government has implemented far-reaching reforms to take up the challenge of internationalizing our companies. (…)

Two years ago, UBIFRANCE (1) was present in only eight countries; it’s now in 46, accounting for 90% of French exports. At the same time, the number of companies receiving support each year has trebled. (…)
Since 2007 the number of companies that have benefited from marketing insurance with Coface [export credit insurance agency] has gone from a little under 5,000 to just over 7,000. I hope we can reach 10,000 by the end of 2012, while also simplifying public export financing mechanisms, which are still too obscure./.

(1) French agency for international business development.

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