tribune. President Donald Trump's announcement of higher tariffs on many products and the denunciation of Chinese business practices have brought the issue of protectionism and its consequences back to the fore. The question of the place of the World Trade Organization (WTO), in this context, also raises questions.
Indeed, the United States decided on December 11 to block the Court of Appeal of the WTO, the body responsible for settling trade disputes between states. The United States administration has not appointed the two new judges required to operate the Dispute Settlement Body (DSB). In this context of paralysis of the WTO and strong trade tensions, how is France impacted? In order to answer this question, it is interesting to analyze the country's level of integration into global value chains.
France remains more involved in global value chains than China and the United States. A country's integration into global value chains can be assessed in particular by measuring the share of foreign value added contained in its exports. In 2015, imported value added was 21% for France and Germany, while it was 9% for the United States; 17% for China and 12% for the European Union (EU) by reducing intra-Community flows to domestic trade.
Size of the country and maturity of the market
Of course, this indicator is partially linked to the size of the country considered. In fact, the larger a country, the less it is dependent on the outside for its supplies and therefore the lower the share of foreign inputs in its exports. This indicator also depends on the level of maturity of the internal market and that of the productive apparatus: this is why China's exports depend significantly more on foreign importers than those of the EU or the United States. Thus, these results show the interest for France of the European market to face international competition.
French manufacturers consume far more Chinese added value than their Chinese counterparts import French and European added value. The level of risk to which economies are exposed in the event of a protectionist revival depends on their balance of power on the international market.
In 2015, in France, 9.2% of the foreign value added consumed by the manufacturing industry came from Germany, 6.9% from China and 5.4% from the United States. France’s other European partners include Italy, Spain and the United Kingdom. Concerning China, the share of Chinese added value in French final manufacturing demand has increased continuously and substantially, from 2.5% in 2005 to 6.9% in 2015.
