The shock provoked by the COVID-19 crisis led to a 9.6% drop in trade in goods and services in 2020, compared to 2019 (IMF figures). In this exceptionally unfavourable context, France’s foreign trade, like that of many comparable economies, suffered a considerable downturn compared to the pre-crisis situation.
Our goods exports are down 15.9% on 2019 according to Customs, a fall on a similar scale to that during the 2009 financial crisis (17%). Our imports also fell a long way, but to a lesser extent (13%). The result is a widening of our trade deficit for goods from €57.9 billion in 2019 to €65.2 billion in 2020. Despite the scale of the shock, this deficit remains smaller than its worst in 2011, when it stood at €75 billion. The downturn in trade is particularly marked for the first half of the year, linked to the first confinement period, with April seeing a historic collapse to 43.9% below levels the same month the year before. There was then a gradual recovery over the second half of the year, with levels approaching those of 2019 at the end.
Franck Riester, Minister Delegate for Foreign Trade and Economic Attractiveness, attached to the Minister for Europe and Foreign Affairs, says:
“Our 2020 foreign trade figures reflect the unprecedented crisis that has struck our economy and disrupted global markets. Since March, the Government has put in place massive emergency measures that have helped our exporters stand up to the shock: the number of exporters is practically stable on that in 2019, at more than 128,000. The recovery of exports was swift and sustained in the second half of the year, even exceeding normal levels in certain sectors, like the automotive industry, at the end of the year. I see that as a sign that our fundamentals are robust.
In 2021, as the world changes, overseas expansion will be a source of growth for our companies. We are determined to give them everything they need to seize the opportunity of exporting and winning new market share.
More than ever before, exports need to be a collective adventure. That is the aim of the export dimension of the recovery plan, tailor-made to meet the needs of exporters, which we are deploying with our Regions and with Team France Export to provide enhanced, personalized support to SMEs and mid-caps across France.”
In the first quarter of 2020, our trade gradually dropped off with all world regions as the pandemic worsened. The recovery began in May, at a pace that varied between partners. Our exports to China picked up quickly (20.4% rise between the first and second half of the year), as did those to the EU (13.5%). Those to the United States were less dynamic, however (up only 3.3% between the first and second half). Across the year as a whole, exports to EU27 countries held up better (down 13%) than those to third countries (down 19.3%), largely because of integrated value chains within the single market.
Apart from pharmaceutical exports, which rose (up 4.7% on 2019), goods exports in all sectors fell. The sector hit hardest by the crisis and resulting fall in exports is aeronautics (fall of 45.5%). Agricultural and agrifood exports held up better (down 3.4%). Automobile exports, which suffered particularly in the first half of the year (down 37.7% on the same period in 2019), picked up markedly in the second half, limiting the overall fall across the year (drop of 18.7%).
Concerning imports, energy products fell furthest (down 39.8%), reducing energy expenditure by almost half. Trade in products required to fight the epidemic soared, meanwhile, by 231.7%.
Our trade in services slowed considerably, with a fall of 17.7% in exports and 13.8% in imports, bringing our surplus in service exports down to €8.3 billion (as against €21.6 billion in 2019). This fall is particularly linked to the collapse of international tourism (exports of travel services down 49.8%).
Prospects for 2021 remain very uncertain and will depend on the evolution of the epidemic, the pace of recovery of the global economy, and on the evolution of trade tensions and protectionist risks. Global trade should recover in 2021, but may remain below pre-crisis levels according to the IMF.
Faced with this unprecedented crisis, the Government has deployed emergency measures to support exporting companies (export credit), in addition to cross-cutting economic support measures they have received (government-guaranteed loans, partial employment, solidarity fund, deferral of tax and social contribution payments). Sector-specific support plans have been implemented for the most-affected export-heavy sectors, particularly the aeronautics (€15 billion), automotive (€8.5 billion) and tourism (€18 billion) industries. Extending these emergency measures, the “France Relance” recovery plan includes an ambitious export dimension which has been deployed since 1 October 2020 to support the international expansion of SMEs and mid-caps.
Totalling €247 million, this export dimension includes “export stimulus cheques”, covering up to 50% of the prospection costs of a company, as well as “international corporate volunteering (VIE) stimulus cheques” worth €5,000, with the aim of creating 3,000 VIE positions. In order to address the lack of visibility caused by economic uncertainty, Team France Export is providing companies with targeted sector-specific information on export markets, updated in real time. The Government has also enhanced its export financing tools, such as through the creation of prospection support insurance (APA) for SMEs and very small companies, and the doubling of the Private Sector Aid Fund (FASEP) budget. Lastly, export support also involves promoting France as a brand. These measures for exporters will amplify the impact of the France Relance plan, which dedicates €34 billion to France’s economic attractiveness.
The good export performance seen before the crisis is reason to believe in our ability to achieve a successful recovery. In 2019, our goods trade deficit improved (down €4.9 billion), while our exports grew by €17.1 billion and our global market share for goods and services was stable at 3.5%. At the end of March 2020, France had 130,000 exporters, the most in 19 years. In 2019, France was Europe’s leading destination for foreign investment, overtaking the United Kingdom for the first time. These encouraging results, the fruit of improved cost competitiveness (up 4.3% compared to OECD countries between the end of 2017 and the end of 2019) and enhancement of our production apparatus due to the economic reforms launched since President Macron took office, are an encouragement to continue these efforts to boost our economy after the crisis. With the France Relance plan and its export dimension, deployed in liaison with French Regions, and thanks to the tailored support provided by Team France Export, our exporters are well-placed to resume their international expansion.
Key figures of French foreign trade in 2020 (in French) ( PDF - 588.2 ko)
2020 results of foreign trade (in French) (PDF - 1 Mo)