(Last updated: 16 May 2012)

Current business situation

The Department of Foreign Affairs and Trade (DFAT) provides advice for business travellers and tourists going to France. This is regularly updated, and should be checked before planning travel.

Country facts

(Source: Department of Foreign Affairs and Trade - Country economic fact sheet)

Economic climate

The French economy is exceptionally diversified and is among the largest economies in the EU, as such it offers an attractive option for investment. However, in light of the recent economic crisis several issues within the economy, namely public deficit and high levels of unemployment, have emerged as causes for concern. Nonetheless, the French economy offers a large, developed domestic market and significant assets in many areas including education, research and development, and services.

There are three major industries in France, agriculture, manufacturing and the services sector. Agriculture and agro-food industries together account for almost 10 per cent of total exports from France, and employs 3.2 per cent of the workforce. Manufacturing accounts for 9.1 per cent GDP and employs 14.2 per cent of the workforce. Finally, the service sector is by far the largest sector, accounting for 54.7 per cent GDP.

The economic downturn of 2008-09 had a significant impact on the French economy and accounted for an A$34 billion government stimulus package in response to the crisis. Unemployment is a major issue, and although it was at 9.8 per cent in 2010, it is forecast to decrease to 9.5 per cent in 2011. Furthermore, in the first quarter of 2011, the French economy recorded an unexpectedly strong rate of growth – the fastest pace in five years. As a result of the economic downturn, the government has announced a series of austerity measures that are set to reduce public debt by A$54 billion. These measures include increased taxes, the loss of 100,000 jobs in the public sector and pension reforms. In addition, the deteriorating condition of government finances and lack of popular support, however, has restricted it from undertaking any major reforms that could boost investments. The tax burden remains one of the highest in Europe. While the value of the euro and the strength of the Eurozone are improving, French consumers remain pessimistic about the economy. Nonetheless, France continues to be the world’s third most favoured destination for FDI (after the US and the UK) and is expected to retain that position in the medium term.

(Source: Datamonitor and Euromonitor)

For the latest key economic indicators and statistics, please see the Department of Foreign Affairs and Trade country economic fact sheet.

Political climate

France is a parliamentary democracy with a President elected by universal suffrage for a five-year term. The President nominates the Prime Minister, presides over the Council of Ministers, proclaims laws, and guarantees the independence of the judiciary. Parliament comprises two chambers:

• The Senate, which is elected by an electoral college. On 30 July 2003, a reform was passed reducing the duration of a term from nine to six years and changing the proportion of replaced senators from one-third to one-half every three years.
• The National Assembly, of which deputies are elected by universal suffrage and serve for a five-year term. There are 577 seats. 

François Hollande was elected President on 6 May 2012 and was inaugurated on 15 May.

Trade relations and statistics

France is a powerful member of the European Union (EU) and has strong ties with its EU partners. Its size, location and robust economy contribute to its position as a leader in western Europe.

France also plays a significant role in Africa, through its former colonies, by providing extensive aid programs, fostering commercial activities and military agreements, and by virtue of its historic, cultural presence in the region.

(Source: World Trade Atlas and Euromonitor)

Australia’s relations with France are positive and friendly. Dialogue and practical cooperation between the two countries have been strengthening on many fronts in recent years, including on key global issues such as arms control and disarmament, non-proliferation and counter-terrorism. The Pacific region, where both countries have a direct interest, continues to be an important focus of bilateral engagement which is facilitated by biannual political-military talks.

Commercial links are substantial and France is an increasingly important source of direct investment and technology, noticeably in the defence sector. 

The majority of Australian exports to France are derived from the coal; aircraft, spacecraft and parts; plastic plates, sheets and films; and also medical instruments. In addition, people-to-people links between Australia and France are growing, as are science, research and cultural exchanges.

Please see the Department of Foreign Affairs and Trade country economic fact sheet for key trade statistics.