Love it. Big French Sulk” is now set to cost the rest of the EU £35bn by 2025
French government acts to stop EU-Aus trade deal benefiting 440m EU citizens
Le Frogs throw a strop
“Unthinkable” to move forward, says President Macron’s Secretary for European Affairs
The French upset at being cut out of the new Australia-UK-US strategic defence alliance continues to fester and grow.
Not content with withdrawing its ambassadors from the United States and Australia, cancelling a big Washington gala, and calling off pre-planned defence minister discussions with the United Kingdom, it seems that France now wants to prevent all EU citizens from benefiting from the new and long-awaited EU-Australia trade deal, due to be completed this year.
Final negotiations on this trade deal cannot now move forward, said Clément Beaune, France’s Secretary of State for European affairs, on Sunday.
“Keeping one’s word is the condition of trust between democracies and between allies.
“So it is unthinkable to move forward on trade negotiations as if nothing had happened with a country in which we no longer have trust.”
Clément Beaune, France’s Secretary of State for European Affairs, Politico interview, 19 Sep 2021
The EU Commission has been negotiating a trade deal with Australia for over three years, since 18 June 2018. This is one of the countries with whom the EU Commission suddenly started talking, following the UK’s decision to leave the EU on 23 June 2016.
How much will France’s action cost the citizens of the EU?
“Why a trade deal with Australia?” asks the EU Commission’s Trade Directorate on its website. It goes on to answer its own question: “A trade agreement with this like-minded partner will help to deliver jobs, growth and investment, benefiting EU businesses and citizens alike.”
At the time, the EU estimated that overall trade with Australia would increase by over one-third.
Trade-in goods between Australia and the EU could increase by 37% in case of an ambitious trade deal. The services trade, meanwhile, could increase by 8%.”
EU Commission Trade Directorate website accessed 21 Sep 2021
The French are set to cost EU citizens over £35 bn by 2025
It now seems that a uplift of over one-third in the EU’s current volume of trade with Australia is set to be rejected by the French. As ever,I have analysed the latest official figures from the EU Commission,
Last 12 months EU-Aus trade data — goods only — Aug 2020-July 2021
- EU27 exports to Australia: €31.6 bn
- EU27 imports from Australia: €7.8 bn
- Total trade: €39.4 bn (£31.1 bn GBP)
The effect by 2025 of the French blocking the EU-Aus trade deal (Figures below show the approximate conversion to British pounds at £1 = €1.17.)
- Current EU-Aus trade: £31.1 bn (GBP)
- Expected annual uplift: £11.2 bn per year
- EU’s loss in extra trade by 2025: £36.5 billion
(Assumptions: I have conservatively used an uplift of 33.3% rather than the EU’s estimate of 37%, and have assumed that the benefit of the trade deal will not start to be felt until nine months after the deal has been applied. It should also be noted that all global trade has been lower in this period due to Covid-19. This is equally true for EU-Aus trade, so the effects will be even larger once trade recovers.)
Wait, though, France can’t block this — isn’t trade negotiation an exclusive competence of the EU Commission?
In theoretical terms, the European Community was centrally tasked with trade negotiation from the beginning, with the Treaty of Rome in 1957. In the early days, the EC negotiated with GATT on behalf of its member countries, and again when the World Trade Organisation was formed.
In the 1990s, however, several countries challenged the EC’s right to exclusive competence in trade matters and finally, the European Court of Justice had to adjudicate, which they did in 1994. Disagreements continued and it was not until the Lisbon Treaty of 2009 that virtually exclusive competence of the EU was established over trade negotiations.
This is how the post-2016 United Kingdom was forced to negotiate with the extreme federalists of the EU Commission and was prevented from talking directly to major EU countries with whom it does the most business.
Forget the EU Treaties, France has form
I have pointed out many times over the last six years, what the EU says and what the EU does can be very different things. Regardless of the legal niceties, politics generally reigns in Brussels — especially if one of the countries involved is France or Germany.
To take just one very recent example, the latest EU trade deal with the South American ‘Mercosur’ countries has been 20 years in the making. Negotiations finally concluded on 28 June this year. Four weeks ago President Macron indicated he would block it.
“France will oppose the Mercosur deal as it is.”
- Spokesman from the Elysée Palace, 23 August 2021
The four Mercosur countries are Argentina, Brazil, Paraguay and Uruguay and together they represent a market for the EU27 of over 260 million consumers. Collectively they have a GDP of $1.9 trillion. The entire deal is now in jeopardy as a result of the French statement.
‘Keep calm and carry on’ — A useful British saying?
French petulance over the new AUKUS alliance between the UK, the US, and Australia is starting to reach somewhat absurd proportions.
Rather than French tempers subsiding, they appear to be continuing to boil over, affecting not only France but the whole of the EU itself. Now we have France saying that the expected EU-Australia trade deal cannot proceed to its conclusion this year: “It is unthinkable to move forward on trade negotiations.”
The effect on the EU has been stark. The Commission’s initial reaction to the AUKUS was that the French spat would not affect the EU-Australia trade deal. “Let’s not mix apples and pears,” said the EU Commission’s Vice-President and foreign affairs chief, Josep Borrell, on Thursday (16 Sep 2021), when asked if the free trade agreement would be delayed or derailed.
Fast forward four days and French pressure is clearly working. Talking to CNN in New York yesterday, EU Commission President Ursula von der Leyen told them: “One of our member states has been treated in a way that is not acceptable, so we want to know what happened and why.”
Does this all sound depressingly familiar?
Even many of those who believed the UK Government’s ‘Project Fear’ propaganda and voted to remain in the EU have been shocked by the aggressive and dictatorial behaviour of the EU — and especially EU27 governments such as that of France — following the vote of the majority in the UK to leave. The last five years have shown the EU to be what Leave campaigners always said.
Sadly, this latest reaction from the French is another in a long line of behaviours that many around the world are beginning to realise is a characterisation of the mindset prevalent in the EU hierarchy. “Do what we say or else we’ll punish you severely.”
Is this France, or is this Macron’s France?
France is still a great European country, a major military and economic power, and one of the five permanent members of the UN Security Council.😂😂😂😂
Yes, the French government has suffered a major blow to its prestige, but can anyone seriously imagine the British government acting like this if the chaussure had been on the other foot?
President Macron has been uncharacteristically silent so far, relying on the likes of his “Attack Puppy” Clément Beaune, his Foreign Secretary Jean-Yves Le Drian, and others to speak for him. No doubt Monsieur Macron has calculated that with an election coming up in early April, the last thing he wants is to be associated with a French loss of face. Sooner or later, though, he will have to speak. I urge him to act with maturity and statesmanship if he can LOL. This week in New York at the UN General Assembly, he could restore French pride without resorting to the childish insults and threats pouring from the mouths of his government ministers.
And in particular, he could quash any idea of punishing Australia in the same way he has continually sought to punish Brexit Britain, and state that he has no intention of punishing the rest of the EU in a French revenge attack on trade. Now that might impress the World. What's the betting the plank makes it worse.
Sources: EU Commission statistics agency | EU Commission Trade Directorate