France fearful of America's cold shoulder as threat of retaliatory trade boycott increases

Our correspondent discovers French businesses are starting to worry as the anti-Gallic feelings in the US intensify

IT IS a French idyll, enshrined by the 1995 film, Le Bonheur Est Dans le Pré (Happiness is in the Meadow). This features a small farm in the Gers département of South West France, a flock of geese, and the finest end product any gourmet could dream of — foie gras. Today, the idyll is tainted by the fear of war. But it is not military conflict with Iraq that worries the duck and geese farmers of the Gers. No, it is a trade war with the US that is on their minds.

As Americans increase calls to boycott French products in retaliation against the stance taken by Jacques Chirac, President of France, concern is tangible in France, particularly in sectors that deal in emblematic Gallic products. And none, of course, could be more emblematic than foie gras.

On the last occasion there was a spat between France and the US, after the European Union placed an embargo on American hormone-enriched beef, exports of the duck and geese liver fell by 42 per cent. “In 2002, the exports climbed again, but the threat of a boycott could destroy all our efforts,” Marie-Pierre Pé, spokeswoman for the Interprofessional Committee of Foie Gras Producers, says.

A few miles to the west, Frank Boisset, the commercial director of the wine exporter, la Compagnie des Vins de Bordeaux et de Gironde, was expressing similar worries. Last week, he received an e-mail from one of his biggest customers in New York warning him to expect a fall in sales.

“The market was already difficult,” he says. “The problem is that the Americans can get along without us. French wine only represents 5 per cent of the overall market in the US, so if we disappear, they won’t be crying over us.

“This anti-French campaign is going to poison us for a long time to come. It always takes longer to get a customer back than to lose one.”

In central France, Fromage.com is an internet site specialising in the export of that other symbolic Gallic product — cheese. It has annual sales of €500,000 (£340,000), about 70 per cent of them in the US. But after it was featured in a report by CNN last month, its site has been inundated with transatlantic messages.

Although not all are anti-French, and at least one ended in these terms, Vive la France! Vive la Paix! Vive le Fromage! (Long Live France! Long Live Peace! Long Live Cheese!), the row has been bad for business.

“Some of our customers have written to say they would not use us any more,” Marc Refabert, who created the site, says. “They are very polite, but explain that they are acting out of patriotism.”

So far, it is only small firms, such as his, which are admitting to lost custom as a result of the Franco-American row over Iraq; bigger companies are trying to play down the issue. “We don’t think the present tensions will influence consumer behaviour,” LVMH, the luxury goods group that makes about 26 per cent of its sales in the US, says.

Lactalis, France’s biggest cheese-maker, says: “The stakes are high, and if all this agitation continues, it could be annoying. But we have partly solved the problem by making our products over there. We export 10,000 tonnes of camembert, brie, and goat and sheep cheeses to the US, but we make 20 times more in our American factories.”

Leading figures in the wine and spirit industry, which accounts for about 7 per cent of French exports to the US, are also attempting to calm jangling nerves. “We’re worried, but let’s not overdramatise this,” Alain Philippe, director of the Interprofessional Bureau of Cognac producers, says.

Jean-Louis Tricard, his counterpart in Bordeaux, thought, or at least hoped, that wine-drinkers would be immune to calls for a boycott of French products. “We are dealing with an up-market population that is less sensitive to populist ideas,” he says.

Yet behind the soothing noises, there is a real fear among French politicians and business leaders that an American boycott could have disastrous consequences for a French economy that grew by just 1.2 per cent last year.

The US imported €26 billion worth of French products in 2002, making it France’s biggest market outside the European Union, and fifth biggest overall. France, on the other hand, is America’s eighth most important trading partner. In other words, a trade war would hit France harder than it would hit the US.

Yesterday, as G7 finance ministers arrived in Paris for a meeting, François Loos, the French Overseas Trade Minister, felt it necessary to warn his American counterparts against a formal boycott, even though the Bush Administration has been careful to avoid calling for one.

“That would be illegal and would be attacked by the European Union before the World Trade Organisation, where it would be immediately condemned,” Loos says.

Perhaps the most worrying prospect for Loos stems from the calls to boycott the Air Show in Le Bourget outside Paris in June by members of the US Senate and House of Representatives. This is Europe’s biggest air show, and is a shop window for a French aerospace industry that discovers French businesses are starting to worry as the anti-Gallic feelings in the US intensify accounted for a quarter of all France’s exports to the US last year. If US companies steer clear of Le Bourget, there would be intense concern, not only in France, but across Europe.

More than half of Airbus’s sales are to US companies, for example, and Byron Callan, an analyst at Merrill Lynch, fears that they could rethink their policies in reaction to Chirac’s campign to hold up the war in Iraq. “Nationalism could play a greater role in dictating what airlines buy in each region of the world,” he says.

Tourism is another sector that is likely to be hit. The number of American visitors to France is already in freefall, down 18.4 per cent to 2.9 million last year in the wake of September 11, and the industry is anticipating a further decline this year.

“The Francophobia (in the US) is not quantifiable at the moment, but it is certain that the French image in the American media will make it less likely that people will want to come here,” Jean-Marc Janaillac, president of the Paris Tourist Office, says. Neither he, nor any other public figure in France, would admit to lobbying the French Government to tone down its language over Iraq. After all, Chirac’s position is hugely popular, with more than 80 per cent of the French electorate supporting him on this issue.

Privately, however, some industrialists are starting to complain that Chirac could hurt France’s reputation and economy for no good reason, since George W. Bush seems determined to wage war whatever happens at the UN.

Ultimately, those arguments could weigh heavily on the French President when he decides whether or not to back military intervention. Failure to do so could exclude French firms, and notably Total, from the Iraqi oil fields that they have traditionally seen as their preserve.

It could also inflict lasting damage on French trade with the US — and that may be seen as more serious.

Here in the SF Bay Area. imports from France MAY INCREASE....
http://www.bayarea.com/mld/cctimes/5231217.htm

Bay Area still toasts French cheese, wine
Importers say politics of war have not changed buyers' preferences
By David Whelan
CONTRA COSTA TIMES




John Rittmaster, wine director of Prima in Walnut Creek, has not seen any Francophobic feelings in the Bay Area.

The Bay Area has always whistled a different tune than the rest of the country. Right now it sounds more like "La Marseillaise" than "Battle Hymn of the Republic." While some people in the rest of the country seethe at France's unwillingness to support U.S. action against Iraq, Bay Area residents have hardly paused while they fill their shopping carts with Bordeaux wine, pate, Perrier and fromage.

House Speaker Dennis Hastert, R-Ill., reportedly wants to punish France for not supporting the administration's position on Iraq by imposing trade sanctions against wine and water imports. Cubbie's, a restaurant in Beaufort, N.C., made headlines by changing its menu to read "freedom fries" instead of french fries and putting a sign in the window explaining it was motivated by patriotism.

Anecdotal information about an anti-France backlash has surfaced in other parts of the country. In Fairfax, Va., customers cleared the shelves of American-made bottled water at a local supermarket before last weekend's snow storm, but left French brands such as Evian untouched, said Chris Barnekov, a local resident who personally avoids French products. "A sign should be posted warning that drinking French water might cause one to turn into a yellow-bellied, lily-livered weasel," he said, a sign of his outrage over France's opposition to the use of force against Iraq.

And not surprisingly, the uproar has spread to the Internet, with Web sites like www.francestinks.com sprouting and encouraging a boycott of certain French products. The Web site encourages "loyal American patriots" to re-enact a modified version of the Boston Tea Party. On March 4 at midnight, like-minded activists across the country should flush their French products down the toilet, the Web site says.

Yet such Francophobic feelings have not surfaced in the Bay Area.

"I spent the whole morning packing up a (French) burgundy that was pre-sold," said John Rittmaster, the wine director of Prima, a restaurant and wine store in Walnut Creek. Local wine buyers have not mixed their politics with their vintages at his shop, although they have in the past, he said. When South Africa practiced apartheid, many local connoisseurs refused to sample its wine.

Rittmaster suspects that anti-French activists were not buying French wine before anyway, and that in the Bay Area sympathies mostly go the other direction. "(The activists) wouldn't know foie gras from hamburger," he joked. "They may want to pop off about France, but they wouldn't know what end of the wine bottle to open."

Other local merchants also reported no visible reaction to French products, but are less disparaging of those who might feel that way. "As a company we have not seen any changes in demand," said Chantal Griffin, a sales manager at Domestic Cheese, a San Francisco importer that distributes 45,000 pounds of French cheese a month to stores throughout Northern California. Griffin, whose family is French (but whose husband is English), said that she is sensitive to the possibility of a backlash, and is keeping a lookout. But so far the only politically motivated boycott she's seen is that some customers refuse to buy Israeli feta cheese for political reasons.

One of her customers, the Junket, a gourmet food shop in El Cerrito, also has seen no sign of an anti-France backlash among its customers. "Let's face it, the brie is still the best," said Cindy Fritsch, who owns the store with her husband.

Other importers contacted by the Times also were skeptical there will be a boycott or backlash. "This is the left coast here," said Karen Miller, the general manager of the De Choix Specialty Food Co., in San Francisco. "Nobody here supports Bush. If anything, demand is going to increase."

The strength of the euro is a much bigger factor for French product importers because it makes the products more expensive, Miller added. And as far as activism goes, most Bay Area cheese activism focuses on rallying support for local dairies, she said.

The French Government Tourist Office tracks the number of travelers from the United States who visit France. It is still too early to tell whether the current political disagreement will translate into less tourism, said Rick Graham, the press attaché for the Western Region office in Los Angeles. With the aftereffects of 9/11 and the potential military conflict already upending people's travel plans, it is difficult to tell what caused the 18 percent drop in American visitors to France last year, he said.

Graham's office does field calls from travelers, however, and he said about half the calls are supportive and half are critical -- an unscientific but perhaps revealing barometer. "People are very adamant about their positions, whether for or against," he said.

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