How Brexit will affect French industry
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French industries are worried that last week’s Brexit vote threatens to undermine business dealings between the UK and France, with London ranked as one of Paris’s top trading partners.
The French agriculture industry was one of the first to sound the alarm the day after the Brexit vote. The British love to eat “à la française”, and according to a statement from France’s National Association of Food Industries (ANIA) the sectors “most touched [by Brexit] will be wine and dairy products, which make up the bulk of French agriculture exports”.
It’s a valid concern: in 2015, France exported €4.54 billion in food products to the UK, or 14 percent of total exports from that sector. The pound’s drop in value relative to the euro following the Brexit vote means that UK buyers will have to spend more to buy the same goods, which risks diminishing the zeal of those British businesses that import from across the Channel.
Up to €2.9 billion in losses?
The consequences would be felt well beyond the agricultural industry. The UK is France’s fifth-largest export market. The more the pound falls – on Monday it was at a 30-year low – the fewer Britons will be tempted to buy French products as they become more expensive. Plus there’s the spectre of a possible post-Brexit return to import tariffs. Insurance company Euler Hermes predicted in a May report on the economic effects of a Brexit that French exports might plummet, with the analysis offering a worst-case scenario of a €2.9 billion drop in the short term. In addition to agriculture, the industries most affected are likely to be machine and equipment supply (including agricultural, electronic and nuclear equipment), with losses estimated at €480 million, and the chemical industry, which could lose some €520 million.
British imports to France might also increase as the “Made in Britain” label becomes less costly. But this would be bad for France’s balance of trade: The UK is, by far, the country with which France has the highest trade surplus – exceeding €10 billion.
To better understand the trade ties between France and Britain, FRANCE 24 presents a sector-by-sector breakdown of the principal exports and imports between the two countries.
To view this graphic on your tablet or mobile device, click here.