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France to tackle

trade reform

package next month

NEW DELHI: The French government will take up a package of trade reforms next month in a drive to catch up with competitors and broaden its business horizons, senior trade official Christine Chauvet said on Friday.

At the start of a four-day visit to India, Chauvet said a central plank of the package she will present to the government in mid-September will encourage French firms to send more workers overseas.

Chauvet, who is junior foreign trade minister, told reporters that France's poor performance with respect to some trading partners was reflected in the number of nationals working in those countries.

She cited Japan, with which France runs a trade deficit, saying there were 35,000 Japanese in France but only 5,000 French in the Asian nation.

"I want to encourage the French to go overseas," she said.

Chauvet said one provision of her package would offer tax breaks to companies which employed expatriates.

Another would seek to increase the number of young people working overseas as part of a national service programme.

Her goal is to double the number of participants in the programme to 6,000 within two years, in part by broadening its scope to take in youths with more modest educational backgrounds.

"The more expatriates we have, the more business we will have and the better we can compete on world markets," she said. "We will have some tax measures to push this issue."

Chauvet's visit to India symbolised France's drive to widen its trade and investment horizons, particularly in developing countries in Asia.

Almost all of France's foreign direct investment is spread among rich nations in the Organisation for Economic Cooperation and Development (OECD) and French-speaking countries, according to the Associated Chambers of Commerce and Industry of India.

Despite new opportunities generated by New Delhi's four-year-old economic liberalisation programme, French investment in India fell to 897 million rupees ($28 million) in 1994 from 1.3 billion ($41 million) the year before.

Although France is one of the world's leading investors, it was only the 18th largest in India in 1994, Chauvet said.

France's share of foreign investment in India dropped to 0.63 percent in 1994 from 1.45 percent in 1993 and 3.62 percent in 1991.

"There are significant discrepancies," Chauvet said. "My message back in Paris will be, 'Let us invest in India. But don't forget to invest in France.'"

Chauvet said French and Indian firms could join hands to export to new markets. She cited an agreement signed during her visit between France's Seribo and Indian Furniture Products.

The joint venture will set up a 450 million rupee ($14 million) plant near the southern city of Madras to make ready-to-assemble furniture for export.

Chauvet said she hoped a bilateral investment guarantee treaty would be ready soon. French officials said Industry Minister Yves Galland and Agriculture Minister Philippe Vasseur were considering visiting India soon.-Reuter