By Elena Mikalis

While the French economic recovery remains slow, U.S. exports will continue to expand in 1992. The United States recorded a $2 billion trade surplus with France in 1991, up from $500 million the previous year. U.S. exports rose 12 percent to a record $15.4 billion in 1991, while U.S. imports from France grew less than 2 percent to $13.4 billion.

U.S. exports 1991--$15.4 billion U.S. imports 1991--$13.4 billion

Reflecting the sluggish international economic environment, French economic recovery is dampening consumer and investor confidence. Forecasters have steadily reduced their 1992 growth projections for the French economy. The consensus now is that an economic recovery will become more robust only towards the second half of the year. While doing somewhat better than Europe as a whole, French GDP is expected to grow by 2.3 percent this year, compared with 1.4 percent in 1991. Unemployment, though, should remain at about 10 percent. On the plus side, French price increases are expected to be only some 3 percent in 1992, among the lowest in the EC.

Despite the slower economic growth and surging unemployment, the French government has reinforced its commitment to the maintenance of fiscal and monetary discipline to check inflationary pressures, ensure a strong French franc, and create the climate for a drop in interest rates. Likewise, it has taken additional measures to promote investment as the best way to address the chief concerns of growing unemployment and a persistent trade deficit. Recognizing the importance of foreign investment in the wake of EC 1992, the French government recently liberalized the screening process applied to non-EC foreign investors. The United States continues to be among France's most important foreign investors. For the last several years, U.S. investment in France has climbed steadily, reaching over $17 billion at the end of 1990.

France is the United States' eighth largest trading partner, and the third largest in Europe, after the United Kingdom and Germany. The depreciation of the dollar has made American products more competitive against those of most EC partners and Japan. France will remain a strong market for the United States, particularly in engine parts and motors, aircraft and associated equipment, ADP machines and parts, electronic components, medical and dental equipment, and other high-tech sectors which account for some 40 percent of U.S. exports.

France is determined to be competitive in the EC Single Market, targeted to begin Jan. 1, 1993. Many French firms see even closer ties with the United States as the best way to prepare for the increased internal competition inevitable with EC unification. This attitude has resulted in strategic alliances, mergers, acquisitions, and joint ventures with American companies, as well as an intensive search for additional products to bolster or round out product lines offered by French companies.

Many American companies have reported record-breaking results from their participation in trade fairs and exhibitions in France. During 1992, the Department of Commerce will participate in major French exhibitions promoting textiles and apparel, computers, security equipment, sporting goods and equipment, and medical equipment.

For additional information about opportunities in France, contact a Commerce Department district office or the France Desk at (202) 377-8008.

Source: International Trade Administration, Business America Magazine