France's Trade Policy

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France’s trade policy is the same as that of other members of the European Union. The common EU weighted average tariff rate was 1.2 percent in 2009. Non-tariff barriers reflected in EU and French policy includes agricultural and manufacturing subsidies, quotas, import restrictions and bans for some goods and services”, (Index of Economic Freedom, 2011).

As a member of the EU, France is one part of the largest trading blocks, accounting for approximately 20% of global imports and exports (Index of Economic Freedom, 2011). Open trade created by the EU for member states furthered economic development in those particular nations.

As one of the largest members of the World Trade Organization, the EU is a driving force behind multiple trade agreements and plays an integral role in promoting open trade in developing countries.

Managerial implications

The EU created a borderless system that allows unencumbered trade between businesses. Businesses can buy and sell goods wherever they want without having to pay special customs duties or taxes “this system is beneficial as the limitations on selling products across the continent are nonexistent” (EU and Trade, 2006). However, the free trade system brings more competition. Consumers have more choices in products, which drives down prices and raises the cost to deliver a quality product. This calls for a diligent focus on production efficiencies, quality control and value added principals in order to deliver a superior product at a competitive price.

Foreign Exchange

The demand for the Euro continues to increase. Investors who traditionally held their assets in dollars are now looking to other sources such as the Euro as a more reliable commodity (Amadeo). President Sarkozy has r...

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...Sep Oct Nov Dec

2010 1.10 1.30 1.60 1.70 1.60 1.50 1.90 1.40 1.60 1.60 1.60 1.70

2009 0.70 0.90 0.30 0.10 -0.30 -0.50 -0.70 -0.20 -0.50 -0.40 -0.20 0.90

2008 2.80 2.80 3.20 3.00 3.30 3.60 3.60 3.20 3.00 2.70 1.60 1.00

GDP

France has the second largest economy in Europe following only Germany. The country has been relative stable through the global economic crisis in part due to the “relative resilience of domestic consumer spending, a large public sector, and less exposure to the downturn in global demand than in some other countries” (CIA Fact Book, 2011). While the GDP did contract in 2009, it rebounded in 2010 and expanded by .40 percent.

President Sarkozy has been a proponent to economic stabilization for his country through stimulus and investment measures. However, now he and his government are finding was to reduce spending and cut the deficit.

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