France may have been displaced by China as one of the five largest economies in the world, but France remains a powerhouse in the global marketplace, according to French minister of foreign trade Christine Lagarde, who spoke at an event hosted by the student-led French MBA Club April 11 at the Hyde Park Center.
“The French economy accounts for 5 percent of the global GDP. France is the fifth largest exporter of goods, the fourth largest exporter of services, the third destination for foreign direct investment,” Lagarde said. “It ranks as the sixth largest economy; China is now fifth. It’s good to have those numbers in mind when you think of France,” she said.
When it comes to globalization, she said for every job lost to an emerging country, two jobs are created, often in another industry. “Jobs die, and new jobs are born,” she said. In most developed countries, the same debate is going on. What I can’t figure out is why, with an unemployment rate of 4.6 percent [in the United States], you still worry about this issue. In France, it’s partly justified by the unemployment rate of 9.6 percent—which is major progress from where we were at over 10 percent.”
Legarde also cautioned Americans against becoming hostile toward foreign countries taking over American businesses. “Is that compatible or incompatible with globalization? Depending on the way it is managed, from both a regulatory and a global political point of view, it is compatible. There is nothing that conflicts between having roots and operating on the global scene. I believe this wave of protectionism is coupled with the uncertainty at what is perceived as a lack of regulation at the global level.”
She countered that such agencies as the World Trade Organization are trying to tackle issues at a global level. “With the WTO, 150 member states have agreed to abandon a bit of sovereignty to the WTO so conflicts can be settled by a judicial body that’s going to rule outside the box. That’s extraordinary.”