An Economy of France

Trade Structure

• France is the second-largest exporter in Europe after its largest trading partner Germany. In particular, France consumes large amounts of imported consumer goods, which are less expensive than products “Made in France.” France is also a net importer of oil and remains sensitive to changes in prices. France is a member of the European Union (EU) and follows a trade policy similar to other member states with a common EU weighted average tariff rate. Furthermore, France and other EU member states have a number of bilateral and regional trade agreements and are members of the World Trade Organization (WTO). France is a relatively open economy; however, some barriers to trade are present. Among goods, many agricultural products are protected at the European level, a policy that France advocated, and French farmers have historically been dependent on government subsidies. France receives large amounts of FDI and investment regulations are generally transparent, although many bureaucratic impediments persist. In contrast, the financial sector is relatively closed, with only a few foreign banks operating in the country.

Exports from France

• France exports a wide range of goods and services and has an export-to-GDP ratio close to 30%. France’s highest dollar value goods exports include machinery, aircraft and spacecraft, vehicles, electronic equipment and pharmaceutical products. Additionally, France is one of the world’s largest exporters of farm and agricultural products and is renowned for its wine, spirits and cheeses. The French government provides significant subsidies to this sector and France is the largest exporter of farm products in Europe. Among services, tourism is a key export and France is the most visited country in the world. Other key exported services include business services and transportation. The majority of France’s exports are to European nations, with only around one-third of all exports going to economies outside Europe. France exports the largest amount of goods and services to Germany, followed by Belgium, Italy, Spain and the United Kingdom. Outside of the European Union, the United States is the largest destination for French exports.