I just read this & thought that some of the posters would find this interesting.
Global Economy
French fear US 'payback'
By Julio Godoy
PARIS - French businesses are beginning to fear that they will pay a high price for their government's opposition to the United States' war plans in Iraq.
Managers of businesses from luxury goods to food, perfumery, fashion, defense and oil are becoming increasingly anxious about a possible US boycott of French goods. Worries have risen since the US media launched a campaign mid-February against the diplomatic position taken by President Jacques Chirac.
The US the biggest commercial partner of France, with French exports to the US topping some US$30 billion last year. Chirac has tried to calm fears of a US boycott. "I know the United States very well, it is a liberal country interested in commerce," Chirac said. "A boycott would be counterproductive."
Not everyone feels reassured. Fears seem greatest within the oil industry. Iraq is regarded as the most attractive place to produce oil, with vast reserves and low production costs. "No mineral has better economics than oil and no country has better oil economics than Iraq," says a spokesman for the Ireland-based Petrel Resources.
Only 2,000 oil wells have been drilled in Iraq compared to a million in Texas. Eight in every 10 wells drilled in Iraq have struck oil; in Saudi Arabia the success rate is less than half.
The French oil giant TotalFinaElf signed exclusive contracts with Iraqi authorities in 1997 after the introduction of the oil-for-food scheme. TotalFinaElf agreed to develop the Nahr Omar oil field in southern Iraq which holds an estimated 10 billion barrels of oil - about a third of US reserves. TotalFinaElf has also been eyeing oil fields at Bin-Umar and Majnoun around Basra in southern Iraq. These two oil fields have from five to eight billion barrels, Total has estimated.
"The Gulf war 12 years ago interrupted our dealings with Iraq," says Christophe de Margerie, general director of production at TotalFinaElf. "We began discussions with the Iraqi authorities again in 1992, and worked on contracts that would take effect as soon as the UN embargo would be lifted."
There are fears now that these contracts would be cancelled following a war, and production rights will go to US and British enterprises. Total hopes the contracts will stand. "We trust the legal basis of our dealings in Iraq," says De Margerie from TotalFinaElf. "Unless Iraq becomes a protectorate, Iraqis themselves would have something to say on the future of their country's resources."
The very fear of a boycott has been damaging. A newspaper reported that the catering company Sodexho Alliance has lost a major contract with the US military. Sodexho denied the report, but the company's shares fell 7.4 percent. Other managers fear that an unofficial boycott of French goods could already be under way. For example, the web site of Fromage, which exports cheese to the US, has been bombarded with hate mail against the French position on Iraq.
Conservative media in both the US and Britain have attacked France. The tabloid New York Post called the French "cheese-eating surrender monkeys". The otherwise solemn Wall Street Journal called Chirac a "Jean d'Arc with a bald head", and "a pygmy", and called foreign minister Dominique de Villepin "an oily rat".
Many French firms depend heavily on the US market. As much as 30 percent of the turnover of the cosmetics firm L'Oreal comes from the US. French wine has massive sales in North America. The US also constitutes 36 percent of the world market in cognac.
"We are all concerned, but we are trying not to dramatize the situation," says Alain Philippe, director of the National Bureau of Cognac. "We hope that the present French phobia is only superficial and that it will go away in a couple of weeks."
Jacques Berthomeau, ministerial reporter on export of French wines, says that US customers are sociologically immune to the present campaign. "We sell our goods to a high-income, high-educated population, which is a priori less sensitive to populist watchwords," he says. But just a small loss of market share can mean heavy losses for exporters.
The tourism business is also worried. About 3 million US visitors went to France last year, 18 percent less than in 2001. "The anti-French feeling is not showing up by way of fewer visitors right now, but it's certain that the image of our country conveyed by newspapers doesn't encourage anyone to come here," says Jean-Marc Janaillac, president of the Paris Tourism office.
Global Economy
French fear US 'payback'
By Julio Godoy
PARIS - French businesses are beginning to fear that they will pay a high price for their government's opposition to the United States' war plans in Iraq.
Managers of businesses from luxury goods to food, perfumery, fashion, defense and oil are becoming increasingly anxious about a possible US boycott of French goods. Worries have risen since the US media launched a campaign mid-February against the diplomatic position taken by President Jacques Chirac.
The US the biggest commercial partner of France, with French exports to the US topping some US$30 billion last year. Chirac has tried to calm fears of a US boycott. "I know the United States very well, it is a liberal country interested in commerce," Chirac said. "A boycott would be counterproductive."
Not everyone feels reassured. Fears seem greatest within the oil industry. Iraq is regarded as the most attractive place to produce oil, with vast reserves and low production costs. "No mineral has better economics than oil and no country has better oil economics than Iraq," says a spokesman for the Ireland-based Petrel Resources.
Only 2,000 oil wells have been drilled in Iraq compared to a million in Texas. Eight in every 10 wells drilled in Iraq have struck oil; in Saudi Arabia the success rate is less than half.
The French oil giant TotalFinaElf signed exclusive contracts with Iraqi authorities in 1997 after the introduction of the oil-for-food scheme. TotalFinaElf agreed to develop the Nahr Omar oil field in southern Iraq which holds an estimated 10 billion barrels of oil - about a third of US reserves. TotalFinaElf has also been eyeing oil fields at Bin-Umar and Majnoun around Basra in southern Iraq. These two oil fields have from five to eight billion barrels, Total has estimated.
"The Gulf war 12 years ago interrupted our dealings with Iraq," says Christophe de Margerie, general director of production at TotalFinaElf. "We began discussions with the Iraqi authorities again in 1992, and worked on contracts that would take effect as soon as the UN embargo would be lifted."
There are fears now that these contracts would be cancelled following a war, and production rights will go to US and British enterprises. Total hopes the contracts will stand. "We trust the legal basis of our dealings in Iraq," says De Margerie from TotalFinaElf. "Unless Iraq becomes a protectorate, Iraqis themselves would have something to say on the future of their country's resources."
The very fear of a boycott has been damaging. A newspaper reported that the catering company Sodexho Alliance has lost a major contract with the US military. Sodexho denied the report, but the company's shares fell 7.4 percent. Other managers fear that an unofficial boycott of French goods could already be under way. For example, the web site of Fromage, which exports cheese to the US, has been bombarded with hate mail against the French position on Iraq.
Conservative media in both the US and Britain have attacked France. The tabloid New York Post called the French "cheese-eating surrender monkeys". The otherwise solemn Wall Street Journal called Chirac a "Jean d'Arc with a bald head", and "a pygmy", and called foreign minister Dominique de Villepin "an oily rat".
Many French firms depend heavily on the US market. As much as 30 percent of the turnover of the cosmetics firm L'Oreal comes from the US. French wine has massive sales in North America. The US also constitutes 36 percent of the world market in cognac.
"We are all concerned, but we are trying not to dramatize the situation," says Alain Philippe, director of the National Bureau of Cognac. "We hope that the present French phobia is only superficial and that it will go away in a couple of weeks."
Jacques Berthomeau, ministerial reporter on export of French wines, says that US customers are sociologically immune to the present campaign. "We sell our goods to a high-income, high-educated population, which is a priori less sensitive to populist watchwords," he says. But just a small loss of market share can mean heavy losses for exporters.
The tourism business is also worried. About 3 million US visitors went to France last year, 18 percent less than in 2001. "The anti-French feeling is not showing up by way of fewer visitors right now, but it's certain that the image of our country conveyed by newspapers doesn't encourage anyone to come here," says Jean-Marc Janaillac, president of the Paris Tourism office.
