Pave: Missed The Boat

Le jour 452 de Sarko

COLOSSAL DÉFICIT COMMERCIAL FRANÇAIS,
QUI CONTRASTE AVEC L'EXCÉDENT ALLEMAND
[COLOSSAL FRENCH TRADE DEFICIT,
CONTRASTS WITH GERMAN SURPLUS]
7 août 2008 (Dépêche)

[Source: Patrice Deré, AFP/Douanes]

[Hat tip: Janina]

MADE IN FRANCE, GOING NOWHERE*

LONDON August 7, 2008 (Forbes) - Want to know why France's trade deficit hit a record high last month, while Germany's trade surplus grew at its fastest rate in two years? Look no further than Russia.

Russia may have lots of energy resources at its disposal, and it benefits from exporting them, but it also needs to import as well. Capital goods, cars, machinery and equipment all wind their way towards Moscow, and that is precisely why Germany is prospering while France dithers. Gilles Moec, economist with Bank of America:

France has, to a great extent, missed the boat on globalization [and here]. Germany has expanded internationally and taken in the emerging markets, in sectors like the auto industry. France, in this regard, is still quite muted.

The problem is a structural one. Germany's dedicated focus to its export industry has pushed companies to spread their cost base wide, build up their international supply chains and to satisfy emerging-market demand for capital goods.

Meanwhile, France's track record of strong domestic growth after World War II meant that international expansion and exports were never seen as necessary, or even a good thing, leaving luxury consumer goods and food as the only real strong points for French international trade.

The figures speak for themselves. French exports to Russia totaled 5.7 billion euros ($8.7 billion) last year, while Germany's were nearly five times bigger, at 28.1 billion euros ($43.1 billion).

... So it might not be wise to simply blame the strong euro, or high energy prices, for France's trade deficit. After all, the exchange rate is the same for France's Renault, as it is for Germany's BMW or Daimler (nyse: DAI - news - people ). Only the cost base and the products are different--as is the brand power of "Made In Germany."

Ah. [Pause.] Well, as Tony Blair might say to Then-Jack, Now Ex-Jack:

Well, France gave its support [and this and this and here and this ] but I did not see much in return [and this and this and this and now this]. I am not sure that it is in the nature of our Russian friends at the moment to return favours systematically.

Or something along those lines. Except that Tony Blair is not a mal élevé bore who thinks the world waits on his mood swings.

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* France is a recognized destination of going nowhere.

PFFT (What is this?): Russia neglects the poodle 4 | Rayonnement français 0