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Frosty US-French Relations Could Have Long Term Impact - 2003-03-21


As France sits out the war against Iraq, some French politicians and business executives fear they may end up paying for their country's forceful stance against the U.S.-led effort to unseat Saddam Hussein. The concerns range from a boycott of French products, to fewer American tourist dollars, to the possibility of diplomatic retaliation by the United States and its allies.

Two-thirds of the business for French internet cheese exporter,, comes from customers in the United States. But company head Marc Refarbert estimates his U.S. sales have dropped by 20 percent in recent months - in part because of the French government's defiance of President Bush's tough stance on Iraq.

Instead of orders on its website, Mr. Refarbert's company in the French city of Tours is getting a stream of emails from the United States. Some praise the French position. But many others, he says, are from irate American customers. A sample letter from one, signed N.P., says he and his wife have decided to boycott all French products because of what he calls France's unacceptable treatment of the United States.

Similar calls to boycott cheeses, wines and other French products have been made by some members of the U.S. Congress. In some cafeterias in Washington, French fries have been renamed freedom fries. But U.S. officials say there will be no official economic retaliation for the months of vigorous French efforts to build international opposition to the war on Iraq.

French President Jacques Chirac has also downplayed chances of a widespread economic boycott, despite soured relations with the United States and several European countries. Some political analysts, such as Guillaume Parmentier, agree that economic reprisals are not likely.

"In trade terms, the Americans would find it very difficult to boycott French products without doing something to European products - because so many companies are European, rather than merely French," he said. "Therefore that would put them in a difficult position. Secondly, nothing can be done officially, because everything official will fall foul of WTO [World Trade Organization] rules, and I don't hink the Americans will go down that road."

Mr. Parmentier, who heads the Paris-based French Center on the United States, also believes France has little to lose in post-war reconstruction contracts in Iraq by not joining the war.

Although French companies struck major oil deals with the government of Saddam Hussein in recent years, most were never fulfilled. And although France participated in the last Gulf War, Mr. Parmentier says, the country received very few post-war reconstruction contracts for Kuwait and other affected countries.

Nonetheless, Mr. Parmentier believes France may end up paying at least a small price diplomatically.

"There will be political fallout. No question about it," he said. "The Americans are going to try to use methods and avenues that make it difficult for France to exert an influence. But there's a limit to that. For instance, they've decided the reconstruction of Iraq will have to be done through the U.N., which of course makes entire sense. The U.S. can't do it by itself. And if it's done through the U.N., France will play a very important role, inevitably."

But other diplomats and trade experts suggest a subtle but widespread punishment may be looming for France's anti-war stance. That could range from a drop in U.S. investment here, to a decline in future defense and aerospace contracts.

In a recent newspaper interview, for example, the France-based head of the European Aeronautic Defense and Space Company predicted it would be much more difficult in the future to penetrate the U.S. market.

But so far, unofficial boycotts of French products, such as the one affecting, appear to be isolated cases. The head of the Paris-based French Wines Council, Jean-Luc Dairien, says so far there has been no significant drop in U.S. imports of wines and spirits from France.

But Mr. Dairien predicts demand from the United States - which ranks around fourth in total French wine exports - may still drop somewhat, not because of a boycott but because Americans may not do so much entertaining involving wine and champagne in troubled times.

The head of the American Chamber of Commerce in Paris, Stephen Pierce, also sees the potential for problems in the U.S.-French business relationship. He says he has seen no drop in U.S. business investment in France so far. But the Chamber has received hate mail from irate Americans - who erroneously assume it is a French business. And he says American business executives are angry that France did not back Washington's stance on Iraq, and that could affect their business decisions in the near future.

"I have had a great many contacts from Americans in various industries saying 'I think we're not going to be buying any Airbuses in the future. I don't think we'll be buying any Michelin tires. I don't think we'll be doing this,' naming individual companies. But it's all hearsay and individuals - nothing official, certainly," he said.

American tourists are also shunning France - a decline that began in 2001, after the September 11 terrorist attacks. The number of American tourists in France dropped 18 percent last year. Early figures for this year suggest that trend is continuing. In interviews, Paris-area tourist shops say they have had very few American customers lately.

But frosty French-U.S. relations have not stopped some people from enjoying the sights of Paris, like 43-year-old Kentucky resident Ron Gash.

"I had some reservations at first, just because everybody at home was saying 'do you really want to go to France? They don't like us anymore,'" he said. "We always heard they never really liked us. Although I know that wasn't true."

Mr. Gash says so far, he has had no problems traveling around France. He says he is against the war on Iraq, and as soon as he tells French people that they become particularly friendly.