Record trade deficit: senator’s report condemns ‘policy choice of deindustrialization’

“We can say that energy prices are to blame, but then we will never solve the problem. Vincent Segouin, Senator LR de l’Orne, warns: if the deficit of the trade balance should be “historic” in 2022 due to the energy crisis, the current economic difficulties should not make us forget the structural problem of the economy. French for several decades. . A report for businessmen of the senatorial delegation, published this Thursday and written by Socialist Senator Florence Blatrix Contat from Ain, centrist Senator Jean Hingray from Vosges and Vincent Segouin, seeks to highlight that.

“Degradation is not sudden, it is it has only gotten worse with the recent health and energy crises”

The socialist senator explains that the foreign trade deficit will certainly reach a “record” level in 2022 – 150-200 billion against 85 billion in 2021, but it “has been increasing since 2002.” Therefore, the senators insist: if the war in Ukraine and the explosion in energy prices explain the historic level that the trade deficit will reach in 2022, the deficit in the trade balance creates structural problems for the French economy, which must be solved. “Degradation is not instantaneous. This stems from a long process resulting from France’s political choice to deindustrialize over 40 years, and has only been exacerbated by the recent health and energy crises,” the report concludes.

The senators, in the words of Vincent Segoui, define a real “policy of deindustrialization,” while Florence Blatrix Contat “doesn’t underestimate industrial strategies. » Services (36.2 billion) and agri-food (8 billion) are indeed still exporting sectors and therefore have trade surpluses, while aviation (19.7 billion) and chemicals (15.2 billion) have good exports Despite its indicators, the industry widens the trade balance deficit. Energy clearly outperforms the deficit sectors, at 43.1 billion, ahead of capital goods (39.6 billion) and autos (18 billion).

“Renault he was trying to make the cheapest car in the land of luxury”

Vincent Segouin also uses the automobile as an example to illustrate the “strategic mistakes” of the state, such as France’s main industrial groups. “We followed the policy of the British who said they could produce more cheaply abroad by keeping engineering at home to supply their domestic markets than conquering foreign markets. The mistake is that, for example, Renault was eager to produce the cheapest car in a luxury country and went to fight with developing countries without social protection. Was this the right strategy? »

The Senate’s report therefore clearly insists on the problems of cost competitiveness and non-cost competitiveness, that is, the weakness of the competitiveness of French companies, not only because of possible costs, but also because of shortcomings in work. the industrial policy of the state and the strategies of the main French industrial groups. Most senators are clearly in favor of reducing corporate taxes and social security payments, but the senators’ delegation to companies focuses on strategies to address the issue beyond price.

“In Germany, 80% of tenders go to German companies, while in France this figure is 18%”

The United States demonstrated this with its Inflation Reduction Act (IRA), a $420 billion “Made in the USA” protectionist investment plan, including 369 environmental investments. “This plan will attract foreign companies and jeopardize the relocation of battery plants in Europe,” explains Florence Blatrix Contat in particular.

On the French side, Vincent Segouin identifies a lack of “economic patriotism” even among large groups and SMEs – ETIs (medium-sized companies) in the French industrial structure. “We have a problem with our state of mind,” adds Jean Hingray, recalling the report’s suggestion of “hunting in packs.” to train ETIs or SMEs of the same nationality. “Vincent Segouin confirms that the solution” will go through the SMEs and ETIs of our territories”, the big German or Italian groups manage to withdraw.

Similarly, the report identifies a similar lack of “economic patriotism” in public administrations, at the level of state control. “In Germany, 80% of tenders go to German companies, compared to 18% in France, although we have the same law,” says Vincent Segouin. “Finally, the French administration does not support companies, but instead punishes them, unlike their German and Italian counterparts,” the report details.