Ambassade de France aux Etats Unis : Ministers support "Make in Europe" to boost Europe’s (...)

Op-ed by M. Matthias Fekl, Minister of State for Foreign Trade, the Promotion of Tourism and French Nationals Abroad, and M. Christophe Sirugue, Minister of State for Industry, published in the daily newspaper Libération.
Paris - January 11, 2017

Through pride or naivety, we have long believed our technological leadership to be taken for granted. The economic crisis, from which we are only just emerging, served as a harsh reality check in France and Europe. The world has changed, the rules have changed. We cannot be naive and turn a blind eye to the current situation any more. To overcome the crisis of confidence paralyzing it, Europe must reconnect with people by showing it is up to the challenge and adopt a genuine European industrial policy.

Industry is at the heart of our economy. In France, it accounts for over 12% of GDP, three million jobs, 70% of our exports and three-quarters of private research. It went through an unprecedented crisis at the end of the last decade. Hundreds of thousands of jobs were destroyed and exports fell. Our industry could have collapsed. But this did not happen.

In France, the government responded with strong measures. Thanks to the Competitiveness and Employment Tax Credit (CICE), the Research Tax Credit (CIR) and the increased depreciation mechanism for investment in particular, French industry has remained robust and enterprising. It is the second-biggest exporter of manufactured goods in the Euro Area. Its technological excellence is recognized and it has companies which are leaders in their field, allowing it to respond to the major challenges of tomorrow. However, with emerging countries moving upmarket, the situation has changed since the crisis. Yesterday, those countries were the factories of the world; tomorrow, they will be its research centers too. In Asia, several million engineers graduate every year. Every sector is competitive, including some which we thought untouchable. This change is, of course, a cause for concern. The concern increases when combined with a fear that tomorrow humans may be replaced by machines in the industrial base, or that technological progress benefits only the most qualified and leaves others by the wayside.

These worries contribute to the crisis of confidence which the whole of Europe is suffering. Some of our fellow citizens fear the effects of globalization, which they regard as a source of insecurity and inequality - which it is too, contrary to what the proponents of 'happy globalization' maintain. Those aspiring to run our country tomorrow after the presidential election cannot afford to overlook this matter: there must be a rethink of industrial policy to provide concrete solutions and guarantees which allow us to remain competitive players in this new world. This is what we have started doing by supporting the modernization of our production base and the innovation of our businesses. This industrial policy cannot operate according to a now-obsolete model in which we design and the emerging countries produce.

So we must act, and this response must be a European one: only the European framework allows us to compete on equal terms with the other major powers. The European project, which was built after the Second World War, has brought us peace. Thanks to Europe, our countries are more prosperous than ever. We shall not be able to defend the European dream unless we can protect our citizens and retain mastery of our technology and the ability to produce on our soil. Faced with a globalization which is brutal for many of our fellow citizens, the European economic area cannot remain wide open.

Industry is also a question of sovereignty. How can we ensure Europeans' security if we do not master the technology critical for our defense? How can we guarantee the integrity of transport, digital and financial infrastructure if we depend on non-European industrial solutions?

We are experiencing an industrial revolution. Big Data, advanced materials, 3D printing and the necessary energy transition are all opportunities for Europe to produce as close as possible to consumers, in a more environmentally-friendly, personalized and efficient way. If we do not grasp these technologies, we will be left behind. Tomorrow, connected vehicles will be made as much from electronic components as from steel: unless we master these technologies, what future will our car manufacturers have?

We do not believe in protectionist responses whereby European peoples would supposedly gain from barricading themselves behind their borders. There is an alternative to supposedly inevitable industrial decline or blind, suicidal self-absorption. Together we must review all our European policies in the light of these upheavals, with a view to possessing and promoting a powerful European industry.

Our trade policy must guarantee fair rules for our businesses. The United States is demanding that the high-speed trains for which Alstom won a contract should be manufactured on American soil. Is it right that Europe should be unable to demand the same thing for its procurement contracts? Likewise, it took Europe 15 years to adapt its trade defense instruments, at the French government's request. Is it right that we should take so long, when the United States acts more quickly and pulls more weight?

In terms of competition, Europe must adopt the goal of creating European champions able to compete at global level, even if it means those champions holding strong positions in Europe. Do our competitors worry about strong positions on their domestic markets when it comes to winning export contracts?

Finally, Europe must make a strong investment in critical industries, from R&D to the most advanced projects, with stronger and more responsive capabilities. The complexity of European support mechanisms makes them disconnected from the pace of innovation of our businesses, particularly SMEs.

Industry without factories is not viable; nor is Europe without industry. This is why we shall continue making proposals to overhaul Europe's industrial activity, under the heading 'Make in Europe', by creating a European investment control mechanism, strengthening trade defense instruments, introducing a 'Buy European Act', releasing European funds to support the emergence and consolidation of European industrial champions, and speeding up the digitization of industry initiative.