The current French presidential contest is tight and tense. The outcome of the run-off vote in ten days that will oppose incumbent Emmanuel Macron and the national-populist Marine Le Pen will determine whether the European Union as we know it has a future. Speaking of trade policy in this context almost seems trivial.
A decisive second round vote and a long-term problem for the EU
So, why is this vote decisive for the EU?
France is one of the great powers, a founding member, a pillar of the EU. If far-right Marine Le Pen comes to power, the EU system cannot but break from within, although it might limp along for years.
The current face-off between ‘centrist’ pro-European incumbent president Emmanuel Macron and a hardline nationalist, anti-immigrant, Islam-obsessed Marine Le Pen is the result of the French political system’s gradual hollowing out over the last two or three decades.
Borderlex is not a publication where domestic political trends are dissected in detail. But our readers need to be aware of France’s domestic situation because this political stalemate is here to stay, affecting the EU and its policies as a result.
The instability will indeed persist even if Macron wins the elections later this month and if he manages to scrape a parliamentary majority in legislative elections next June.
The year 2017, when Macron was elected, was a turning point in the French fifth Republic. Macron’s election signed off on the demise of traditional political parties and on the general irrelevance of traditional grassroots institutions such as labour unions which were earlier able to channel grievances and turn them into negotiable policy outcomes.
It’s as if France had returned to its default thousand-year-old system: a naked coercion-wielding centralist state. Today it is flanked with a hollowed-out system of democratic political participation.
For five years at least France has lived in a face-off between a technocratic centre with elements of elected charismatic one-man one-party rule buttressed by a pliant parliament, and an anti-system opposition expressed in the streets (cf Yellow Vests) or radical parties on the right and left. There is no space in this system for constructive opposition, for channeling discontent, for appeasing inevitable conflict and building compromises.
Only drastic domestic institutional reforms would help change course. Such reforms will not happen overnight, if they happen at all. If they don’t happen soon, there will be more turbulence coming out of France in the foreseeable future.
Chaos, paralysis, disintegration
Consequences of a Marine Le Pen win for the functioning of the EU were set out clearly by Georgina Wright, a Europe programme director at the Institut Montaigne: “The far-right candidate wants to drastically reduce the EU’s decision-making power, to control who gets to travel freely inside the EU, and to withdraw from some of the EU’s trade and energy arrangements.”
“It’s hard to see how the EU could adopt these reforms without gradually disintegrating,” adds Georgina Wright in her piece of analysis. “A Frexit, but unlike Brexit, a slow and disorderly withdrawal.”
In any case, the first thing we will see if Marine Le Pen wins the runoff election on 24 April is paralysis and chaos.
Nobody knows how the June parliamentary elections will pan out, given the implosion of traditional political parties.
It is not a given that Le Pen’s Rassemblement National party wield a majority, despite the traditional French tradition that gives presidents their preferred majority once elected. This means there would most likely be political stalemate in Paris.
Ms Le Pen has plans to work around parliamentary obstruction and constitutional constraints on her action by leveraging alternative routes such as referenda – and possible rule-by-decree. We can thus expect a lot of chaos and political turbulence and probably bad things happening in the streets. All in all: this will be more a Trump-like scenario, rather than Boris.
France is an active member of NATO and Paris has shown a good degree of leadership on sanctions and political pushback against Russia’s war of aggression in Ukraine. France is keen on keeping transatlantic relations on a solid footing.
Despite recent hiccups in its relationships with the United States, France’s geo-strategic outlook is Western-oriented, NATO-centric and multilateralist.
Marine Le Pen shares with the European mainstream a rising wariness of China. But her Russia policy would put her on a collision course with the rest of Europe and the NATO alliance. She wants to leave NATO’s integrated structures (basically bring France back to where it was before 2009) and build an alliance with Russia – and recognise its 2014 annexation of Crimea.
So if Ms Le Pen comes to power, there would be sudden paralysis at all levels in the EU – with potentially grave consequences for the stability of the European continent as a war rages on in Ukraine.
TTC and FTAs in limbo
Probably most big-ticket items on the EU trade policy agenda would be thrown into disarray: the Transatlantic Trade and Technology Council with the US, expected to take place in France in May, might not proceed. Many trade agreement negotiations with a strong agriculture component – notably those with Australia and New Zealand – might be thrown once again into the long grass.
The EU’s neighbourhood policy will also be affected – and probably enter an era of paralysis. The same can be said about the EU’s timid attempts at building better trade relationships with Africa.
The EU’s approach to the WTO, strongly supported by France so far, which involves trying to save and reform the institution, and even bargain with developing countries over an intellectual property waiver for vaccines, is most likely to falter.
Integral nationalism: immigrants to goods
The heart of Ms Le Pen’s policy is its anti-immigration agenda. To Ms Le Pen, the European Union is the root cause of what she sees a “submersion” of France by immigrants.
Ms Le Pen wants to organise a referendum on the French constitution, which would ask French people for a return of the superiority of French law above EU law. This would immediately lead her to reinstate systematic national border controls.
In a 2019 pamphlet her party castigates the founding principles of the EU, the ‘four freedoms’ of movement of capital, goods, services and people.
Her economic vision is simple. She wants to “reorientate our economy towards the principle of localism and economic patriotism,” as she put it in her 2022 election programme. Everything else flows from that principle.
In the above-cited 2019 pamphlet Madame Le Pen also castigates free trade agreements of the EU and points explicitly to the EU Japan free trade agreement, which came into force in that same year.
“In clear opposition to the dogmas of unbridled globalisation, national priority (or European in some cases) will apply for public procurement market,” she states one of her 2022 electoral pamphlets.
The far-right candidate’s programme also foresees systematic foreign direct investment controls.
Ms Le Pen wants to introduce customs checks at EU internal borders. Among others, this is in order to stop imports of agriculture produce from outside the EU because of distrust of other member states’ sanitary and veterinary customs checks.
“More generally, the importation of agriculture products that have not been grown or produced the same way as in France will be prohibited,” the same 2022 programme says.
Ms Le Pen wants to increase agriculture subsidies and return to the Common Agriculture Policy’s old ways, namely by focusing on subsidising production – leading her on a collision course with Brussels and WTO partners.
Not surprisingly, the National Rally’s candidate also wants to introduce local content requirements for food. Her programme states that school and other canteens would be required to source 80% of their food in France.
Now to the digital sphere. Much of her discourse is already an EU discourse: one of technological sovereignty and localism. She wants to “render obligatory the hosting of data of French people, French companies and French public companies by French or European operators”.
Strikingly the EU ‘protectionist’ measure that does not explicitly appear in her programme is a carbon border adjustment tax or the EU’s planned CBAM.
This is not because Madame Le Pen would be against taxing an import at the border. This is because her programme calls for the scrapping of the EU’s Green Deal altogether. Any tax on carbon – domestic or international – is just not part of her repertoire.
The right to drive a car on the cheap is, in contrast, a central part of her environmental policy repertoire. And this is important as she seeks to capture the vote of the car-dependent peripheral urban and rural population that fed into the year-long Yellow Vest movement of 2018-2019.
One of her pamphlets states that families should have the right to go out together by car, that fossil fuels for cars should benefit from a lower VAT rate and that France should not have to pay more for the EU’s and the world’s greening efforts.
What if Macron wins?
Whatever the outcome of the election: it will be a close call.
So what if France and the EU escape a Marine Le Pen presidency this year?
In the short term there will be relief in France and in the EU. There will be continuity in the EU’s current external policy course from security to trade.
But as long-time observers of EU trade policy might have already noted: a lot of what Madame Le Pen suggests is already French policy and a lot of this is already becoming EU policy. It is inherent to the political system and constellation described above that the government needs to placate its opponents through political concessions to be able to keep on governing – and in attempts at snatching their votes.
Macron’s 2017 programme included a ‘Buy European Act’ idea, for example. France has been seeking to tone down measures to apply a carbon price on road transport (hello Yellow Vests!). France has long fought a rearguard battle on data localisation within the EU’s very own single market.
In response to tensions on global food markets sparked by the war in Ukraine Macron also said that the EU’s flagship environmentally-focused Farm-to-Fork food strategy – which Ms Le Pen criticise vehemently in her 2022 programme – needs to be revisited.
This might be music to the ears of some EU agriculture trading partners because they might dislike that fact that said policy adds more costs and raises standards further. But they shouldn’t cheer: Neither Mr Macron nor Ms Le Pen think this is about letting them sell more to Europe.
All this is happening already without Madame Le Pen being in government.
But there are fundamental differences with Le Pen.
The current European-wide supply-chain re-shoring discourse, the digital ‘sovereignty’ policy course coming out of Brussels, the EU’s ‘greening’ agenda – all are strongly supported by France and pushed by Paris.
But Paris acts under a clearly articulated understanding that there is no national solution to the climate crisis, to the challenge of job creation, of reindustrialisation, to addressing import and other dependencies… and to national security.
Hence its attempt at making the EU’s trade and investment policy more defensive at the level of the entire block – and not the nation. Ms Le Pen’s outlook in contrast is exclusively nationalist.
Nobody wins
To conclude: Nobody in the EU and among its international partners has an interest in a Le Pen win.
Within the EU, countries such as Hungary or Poland might applaud at first, as her nationalism and approach to the EU – basically “take the agriculture money but keep the movement of people out and let me control my borders” – echoes theirs. But Poland will be wary of Ms Le Pen’s policies towards Russia.
If he wins – and this continues to be the central scenario – President Macron will need to be encouraged by its international friends and partners to initiate a genuine reform of France’s political system. Because the latter is now becoming a liability for the whole European continent.
Trade policy is only a side-show in all this.
