Abstract
Since 1950, trade has exploded. On trend, trade is growing much faster than GDP. An ever-increasing share of the world's production is therefore destined for international trade. In general, the growth rate of international trade flows in goods and services is higher than the growth rate of GDP. International trade is therefore a procyclical variable, amplifying variations in world production.
Trade in goods (x80 since 1950) has grown faster than agricultural products and energy and minerals (x10 since 1950). Services have grown very fast, especially since the 1980s. Manufactured goods and trade in services have grown the most.
The commercial globalization that has taken place throughout the world, thanks to the development of free trade and trade agreements, is generating positive effects for companies involved in international trade. On the one hand, their profits are rising, thanks to the conquest of new markets, which increases their sales and turnover. On the other hand, companies can benefit from lower production costs, when they carry out Foreign Direct Investment (FDI) in countries where labor costs are low.
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However, the EU is a free-trade zone, based on an active trade policy in favor of trade liberalization. Indeed, one of the EU's objectives is to liberalize world trade, which is one of the pillars of the "Europe 2020" strategy developed by the European Commission in 2010, which calls for a revival of the WTO (World Trade Organization) to accelerate the liberalization of international trade (Touteleurope.eu, 2018).
Under these conditions, trade agreements represent opportunities for European exporting companies, and French ones in particular. Indeed, France's share of world exports has been falling since 2004, reflecting a deterioration in its competitiveness in relation to other competitor countries.
However, the use of bilateral tariff preferences is not automatic or systematic on the part of companies involved in international trade. In fact, 30% of France's exporters do not make use of the benefits of trade agreements, which enable them to reduce customs duties - a loss equivalent to hundreds of millions of euros for French exporting firms.
Extract
[...] Leibniz Information Centre for Economics (ZBW). Hamburg, Germany. Plihon, D. (2022), « Une autre mondialisation », Revue du MAUSS pp. 105-114. Porter M. E. (1980). Competitive Strategy: Techniques for Analyzing Industries and Competition. New York, Free Press, Porter M. E. [...]
[...] Under these conditions, trade agreements represent opportunities for European exporting companies, and French ones in particular. Indeed, France's share of world exports has been falling since 2004, reflecting a deterioration in its competitiveness in relation to other competitor countries. However, the use of bilateral tariff preferences is not automatic or systematic on the part of companies involved in international trade. In fact of France's exporters do not make use of the benefits of trade agreements, which enable them to reduce customs duties - a loss equivalent to hundreds of millions of euros for French exporting firms. [...]
[...] Here again, exporting companies need to target these identified countries with communication and information on tariff preferences. 3.3 Recommendations to promote the use of export tariff preferences for French exporters We mentioned earlier that the EU's tariff preference trade agreements have resulted in a tariff gain for French exports of 2.7 billion euros in 2021 from 39 preferential partner countries (which account for 96% of EU exports). In other words, they have boosted the export competitiveness of French companies. The « Direction Générale du Trésor » therefore recommends increasing the preference utilization rate from 76% for exports to a target of in order to generate additional tariff gains of up to 500 million euros per year on exports. [...]
[...] However, these free trade agreements also have harmful environmental and social effects. For example, the EU does not hesitate to include in its trade agreements severe restrictions on the environment (such as anti-deforestation regulations or a carbon adjustment mechanism at borders) and human rights, which are blocking negotiations (Les Echos, March 22, 2023). 2.2 Liberalization of world trade under the aegis of the GATT and then the WTO The liberalization of international trade, driven by the GATT (created in 1947 and replaced in 1995 by the WTO) after the Second World War, has led to a reduction in tariff barriers (customs duties, which have fallen from 40% of the price of traded goods in 1947 to today) and non-tariff barriers (regulatory standards). [...]
[...] Finally, the analysis of tariff gains made by French exporting companies (in relation to most-favored-nation duties) according to trading partner is also relevant. The tariff saving (or gain) is equivalent to the tariff margin, i.e. the difference between the most-favored-nation duty and the preferential duty, multiplied by the value of the flow. In fact, according to European Commission calculations (2021), the tariff gain reaches 25 billion euros for EU exports to the 39 partner countries, representing a tariff saving of around of the total value of eligible exports. [...]
