Building closer bilateral economic ties with several key EU partners will be the trade priority of the French Presidency. Paris hopes to conclude free trade negotiations with South Korea and the Gulf Cooperation Council (GCC) and to set the basis for bilateral talks with Canada during the second half of 2008. In order to achieve these ambitious goals, France will need to team up with EU Trade Commissioner Peter Mandelson, with whom it has often disagreed, and convince some reluctant member states and partners to compromise on certain sensitive issues.

SOUTH KOREA

The conclusion of a free trade agreement (FTA) with Seoul tops the agenda of the Presidency. Both Paris and Peter Mandelson would like to deliver the first FTA proposed by the ‘Global Europe’ strategy paper presented by the Commission in 2006, which focuses on increasing business opportunities for European firms in emerging markets. French President Nicolas Sarkozy sees the EU-South Korea summit that will be held in Asia in October as a golden opportunity to demonstrate his ability to advance European offensive interests and translate into action his concept of ‘reciprocity’ in trade relations. Mandelson is impatient to sign a deal before he leaves office. “There is a desire to conclude on our side. It is feasible,” said a French source.

However, in order to achieve this objective, the commissioner and the Presidency will need to solve the remaining sticking points, including the sensitive issues of the automotive sector, services and rules of origin. The talks launched in May 2007 in Seoul are now at a standstill following the last round of negotiations held in May in Brussels where both sides acknowledged that the gap between their respective positions remained unchanged on the crucial issue of cars.

The EU is urging Seoul to adopt international automotive standards in order to ease the access of European car makers to its market. In return, Korea requests a swift elimination of EU automotive tariffs. While the EU is proposing to eliminate its 10% tariffs over a period of seven years, Seoul wants to shorten this phasing out to three years. “It is a symbolic issue for Korea. We can not budge on that,” a Korean source told Europolitics.If Paris wants a deal it will need to convince powerful German and French car makers to soften their stance. The signing of an FTA before the end of year will require swift progress over the summer.

The French Presidency also hopes to successfully put an end to 18 years of free trade negotiation between the EU and the Gulf countries. Nicolas Sarkozy wants to ink an FTA that is under discussion since 1990. Besides the political visibility that the conclusion of this ‘endless’ negotiation would offer, the French motivation lies in the growing interest the French president has shown for this region since he took office. Since his election, Paris has strengthened its diplomatic ties with Qatar (which was instrumental in the release of the Bulgarian nurses in Libya) and other countries in the region and is opening a French military base in Abu Dhabi.

The last EU-GCC meeting, held on 26 May in Brussels, confirmed that both sides were closer than ever to a deal that could be concluded as soon as July. However, the history of these negotiations leads EU experts to be cautious. In the past few months, discussions have stumbled on the question of services and the rules for companies to be established in the Gulf region. France remains confident that a breakthrough will be achieved soon. ”If there is no deal in the next semester there will never be one,” assessed a French diplomat.

CANADA

Building closer economic ties with Canada is another key priority of the French agenda. Ottawa is pushing hard for a bilateral trade agreement with the EU and sees France’s Presidency as a unique opportunity to advance its project and to convince a reluctant Commission to accept the opening of talks. “Ultimately we are striving to get into a ‘new age’ free trade arrangement with Europe,” says Canadian Trade Minister David Emerson, who notes an “under-appreciation of the potential of our economic relationship” on both sides of the Atlantic. France, which has strong historical ties with Canada, is very supportive of those efforts.

After the freezing of a trade and investment enhancement agreement (TIEA), both Ottawa and Paris are pushing in favour of brand new negotiations that could include regulatory issues, public procurement, intellectual property rights or workers mobility. Following the presentation before the summer of a feasibility study that was commissioned during the last bilateral summit, Sarkozy hopes to announce the launch of new negotiations on 19 October in Montreal during the Canada-EU summit. This will coincide with the celebration of the 400th anniversary of Quebec, the French-speaking province. “This is the most ambitious option,” said a French diplomat, who knows that a lot of work still needs to be done to convince the Commission and some member states which are reluctant to engage with Ottawa following the failure of the TIEA talks.

France will also keep an eye on bilateral negotiations with ASEAN, India and Mercosur although no deliverables are expected in 2008 despite the holding of a series of summit meetings with New Delhi and Brazil.

EPAS

Paris will face the difficult task of moving forward the burning economic partnership agreement (EPA) negotiations with the ACP (African, Caribbean and Pacific) countries. France will be walking on a tightrope between the need to sign World Trade Organisation-compatible deals and the concerns expressed by the ACP and NGOs. The EU will seal its first EPA with the Caribbean on 23 July in Barbados and hopes to sign after the summer interim deals that were concluded in late 2007. The biggest challenge will be to convince African countries to speed up talks towards fully fledged EPAs. Sarkozy has asked Christiane Taubira, a deputy from French Guiana, to prepare a report about the best way to turn the controversial EPAs into a success.