- The Washington Times - Wednesday, April 12, 2006

Laboring for France

French Trade Minister Christine Lagarde realized her timing was off when she came to Washington to promote foreign investment in France, while thousands of students were rioting in Paris to protest a labor law.

“At a time when television images and newsprint give a less-than-flattering picture of France, you may consider it strange for me to suggest that my country could be a paradise for investors,” she told the Center for Strategic and International Studies.

Mrs. Lagarde’s pitch for dollars promoted France as friendly to foreign companies, but France also has protectionist policies that restrict foreign investment in key areas. She also praised the globalization of trade, although Prime Minister Dominique de Villepin has denounced it and championed laws that allow the government to block foreign takeovers of firms considered strategic.

“I can guarantee that foreign investors wishing to pursue a growth strategy aimed at the creation of wealth and employment are welcome in France and that the authorities will do everything in their power to make investment attractive and to maximize its chances of success,” Mrs. Lagarde said.

She cited reforms that capped the value-added tax at 3.5 percent and exempted new investment from the levy. France has strong protections for copyrights and patents and attracted more foreign investment in the 1990s than any other member of the European Union. In 2003, one in seven French workers was employed by foreign-owned firms, while one in 20 Americans worked for foreigners.

Mrs. Lagarde squarely addressed the cause of the student riots over a law that would allow employers more flexibility to fire workers younger than 26. President Jacques Chirac scrapped the law on Monday.

“I will not try to maintain that French society readily, quietly, peacefully accepts the necessary reforms and adjustments,” she said. “Yes, it creates tensions, but resistance to change is not particular to France. It’s universal.”

Mrs. Lagarde also noted that few people are neutral about the French.

“It is true that cliches about France abound,” she said. “Some are positive and praise the excellence of France’s gastronomy and wine; its genius for creating luxury clothing, cosmetics, leather wear and jewelry; its savoir vivre and the charm of its landscapes and sometimes its inhabitants.

“Other cliches highlight a certain arrogance, a nostalgia for past glory, a difficult social climate and — at the moment, I would find it hard to refute this cliche — little liking for work.”

The Heritage Foundation’s Index of Economic Freedom criticized France for “an over-regulated labor market and overly intrusive” state regulations. Growth remains sluggish at about 1.6 percent. Unemployment is high at 10 percent, but even higher among young people. The jobless rate for those younger than 26 is 22 percent nationwide but as high as 50 percent in some areas.

Identity check

Canadian Foreign Minister Peter MacKay plans to raise objections to a U.S. plan to require stronger identification for Canadians crossing the American border when he meets today with Secretary of State Condoleezza Rice.

He told the Canadian Press news service yesterday that he will reiterate the arguments that Prime Minister Stephen Harper made when he met President Bush last month at a summit in Cancun, Mexico. Canadians currently need to show only a driver’s license to visit the United States.

Mr. Harper added that he hopes his meeting with Miss Rice will build on the good relations the Conservative prime minister has established with the Republican president, after years of Liberal rule in Canada, in which leaders regularly criticized Mr. Bush.

“We are committed to pursuing a productive and cooperative relationship with our closest ally and friend,” Mr. Harper said.

Canada objects to the stiffer identification plan because of its potential effect on tourism and business. The two countries do more than $1 billion a day in cross-border trade.

Call Embassy Row at 202/636-3297, fax 202/832-7278 or e-mail jmorrison@washingtontimes.com.

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