This country-specific Q&A provides an overview of International Trade laws and regulations applicable in France.
France has been a member of the General Agreement on Tariffs and Trade (hereinafter “GATT”) since 1st January 1948, and a Word Trade Organisation (hereinafter “WTO”) member since 1st January 1995. In 2018, France hosted the conference: “A WTO fit for the 21st century”. France is deeply involved in the WTO policy. For instance, in June 2023, France contributed 1 million euro to the WTO Fisheries Funding Mechanism.
It is important to recall that, pursuant to Article 207 of the Treaty on the functioning of the European Union (hereinafter the “EU” or the “Union”) members, as France, delegated a part of their sovereign powers. For instance, EU has an exclusive competence on European Trade policy and the EU negotiates all trade agreements on behalf of EU Member States. In this regard, France as part of the EU, is part of a joint initiative to start explanatory work regarding future negotiations on trade-related aspects for e-commerce. The aim of the joint initiative is to conclude most of the negotiations by the end of 2023. EU is also part of the Informal Working Group on Micro, Small and Medium-sized Enterprises (hereinafter “MSMEs”).EU also participates to Trade and Environmental Sustainability Structured Discussions (hereinafter “TESSD”). EU is also part of the friends of ambition group (NAMA), which aims to maximize tariff reductions and achieve real market access in the members’ group zone.
According to the official report on the EU’s active dispute settlement cases, as of 7 February 2023, France is a party in three pending WTO disputes and more specifically all on the defensive side. These cases involved only the United-States: DS 291 : Measures affecting the approval and marketing of certain biotech products (GMOs) DS 316 et DS 347: Aircraft
According to Article 17 of the Understanding on Rules and Procedures Governing the Settlement of Disputes, the WTO’s appellant body is composed by 7 members appointed unanimously by WTO members. However, since Barack Obama’s mandate, United-States blocked the renewal of the Appellate Body’s members. The last member’s mandate ended in November 2020. Thus, if a WTO member wants to make an appeal, this appeal will be useless because there is no Appellate Body members anymore. The term of the last sitting Appellate Body member expired on 30 November 2020. In order to solve this problem, EU tried to find solutions. For instance, EU suggested to reduce the duration of procedures and the number of pages of panel reports or decide that body’s decisions of appeal cannot be considered as precedent. Pending a resolution of the situation, EU created, with some WTO members, a Multi-Party Interim Appeal Arbitration Arrangement (hereinafter “MPIA”). The MPIA became effective on the 30th April 2020. Its aim is to create a temporary appellate body to ensure that members benefit from a functioning appellant system. In March 2021, over 50 WTO members were involved in the MPIA, such as: Australia, Canada, China and Singapore.
EU concluded Free Trade Agreements (hereinafter “FTA”) with countries located on all continents. Among all of these agreements, some are very beneficial to France. First of all, with Canada, EU signed the Comprehensive Economic and Trade Agreement (hereinafter “CETA”). This agreement entered into force on 21st September 2017. The French rate of use of CETA for export was 63% in 2022 which is higher than the European average (60%). In Asia, there are: the EU-Japan Economic Partnership Agreement which entered into force on 1st February 2019 and the EU-South Korea Free Trade Agreement which entered into force on 1st July 2011. These two agreements have a strong impact on the French market. Indeed, the FTA with Japan enables French companies to export more wine, luxury products, pharmaceutical products and dairy products. Regarding the FTA with South Korea, in 2022, France exported for €6 billion, it is the highest level since the entry into force of the FTA in 2011. Finally, in Europe, EU concluded an FTA with the United Kingdom: EU-UK Trade and Cooperation Agreement, which entered into force on 1 May 2021. As a result, France exported for 34,3 million to the United kingdom in 2022.
It is important to recall that the EU is negotiating on behalf of EU Members States. EU is currently negotiating numerous FTAs with third countries, like India, Australia, New Zealand According the French Minister of Economy, this agreement is a strategic cooperation for France and the EU in the future. In particular, the EU and Australia started to negotiate an FTA in June 2018. Australia and the EU started again talks at the end of August 2023. The two parties did not manage to sign an agreement in July because, they had some disagreements over access for Australian agricultural products to EU markets. In addition, one of the blocking issues is the EU desire to protect certain geographical indications, for example: “Roquefort” should be reserved for sheep’s milk cheeses made around the eponymous French village. Finally, since 2022, the ratification process of the EU Mercosur FTA started again. However, on June 13th 2023, the French national assembly considered that this agreement is not compatible with EU engagements regarding the fight against global warming, nor with the objective of food sovereignty. The French president also stated that he is against the conclusion of this agreement as long as some elements are not added, such as the protection of the environment.
According to the French foreign trade report 2023 and The National Institute of Statistics and Economic Studies , Germany was the biggest trading partners of France in 2022, regarding importations and exportations (80,6 billion exportations and 92,8 billion of importations). For importations, the second place is for China (77, 7 billion), the third place for Belgium (68,7 billion), the fourth place for the United-States of America (61,5 billion) and the last one for Spain (53 billion). Concerning exportations, the second place is for Italy (54,2 billion), the third one for United-States of America (48 billion), the fourth place for Belgium (45,5 billion) and the last one for Spain (44,6 billion). The goods that are particularly important for France foreign trade are: aeronautics and space sector, chemistry, perfumes and cosmetics sector, agri-food sector and pharmaceutical sector. Regarding services: trade services, other services linked to companies, transport and travel.
The EU signed the Paris agreement, which aims to achieve climate neutrality by 2050. In this dynamic, EU put into place the “Green deal” which seeks to set the EU on the path to a green transition. Similarly, in 2021, France put in place the “Recovery Plan”. This plan has two main objectives: revive economic activity, hit by the health crisis, and build the France of 2030. This plan is divided in three programs, among them the “Ecological” program 362. The aim of this program is to: enable France to become a large European low-carbon economy by achieving neutrality carbon in 2050. One of the ways to achieve this objective is to promote electric cars. That is why, since few years, the French government allows bonuses in order to encourage French people to buy electric cars. However, as of 10th of October 2023, its criteria is stricter to push people to by electric cars produced in countries nearby. In addition, in the same dynamic of the “Recovery Plan”, France also seeks to attract investors. For instance, in 2021, “France 2030” was created. The French government will invest 54 billion. For instance, the aim, thanks to investment, is to produce 2 million of electric and hybrid vehicles or develop small, innovative nuclear reactors in France with better waste management. Finally, at the domestic level there is also the plan “Green French Nation”, it is a response to the “Green Deal” at the EU level. Its aim is to find solutions to reduce climate warming. For example, in the framework of the “Green deal”, European Investment Bank and InvestEU invested €450 million in the construction of the AESC electric battery gigafactory in Douai (France). Thanks to this investment, the company will be able to provide batteries for electric vehicles. To product batteries, raw materials are essential. As a response the Critical Raw Materials Act was set up. This Act focus on ensure the independence of EU regarding some strategic raw materials (Arsenic, Helim, Coking Coal, Lithium, Nickel…). Indeed, for now, very dependent of importations and the use of this kind of materials will increase in the future. Finally, in the same dynamic, the Chips Act aims to create conditions to develop EU’s industries in the field of semiconductors, promote research and innovation, attract investment and prepare the EU for any future chip supply crisis.
EU law requires certain large, medium and small companies to disclose information on the way they operate and manage social and environmental challenges under the Corporate Sustainability Reporting Directive. French government has until the 9th December 2023 to publish an order to transpose the directive in the trade code. There is also the Corporate Sustainability Due Diligence Directive, which will imposed a broader due diligence duty, to prevent adverse human rights and environmental impacts in the company’s own operations and across their value chains. It means that, companies will have to be aware of their subsidiaries’ activities and any other companies which is part of the chain. From now, multinationals, as well as small and medium-sized businesses operating in risky sectors will have to comply with. The directive’s final project will be presented in 2024. In September 2022, the European Commission proposed the Forced Labour Regulation. Its aim is to ban all products made by forced labor from the EU market. This text is still under discussion. In this context, France signed two agreements: Private Employment Agencies Convention in 2015 and the Protocol of 2014 to the Forced Labour Convention in 2016. Regarding FTA, EU wants to add their vision of sustainable development to their new FTAs. Since few years, the new FTA are called “FTA of a new generation”: they add sustainable development aspects. For instance, France is against the current EU-Mercosur agreement because there is a lack of measures to protect the environment.
France is trying to reduce the supply chain spreading. Indeed, in the “Recovery Plan”, besides the “Ecological” program 362, there is the competitivity program 363. The aim of this plan is to ensure its independence by having a better control on the production of strategic industries. Five sectors are targeted: agri-food, health, electronics, essential industrial inputs and 5G telecommunications. In order to achieve this goal, the French government allowed €27.4 million in 2024. France also seeks to attract investors. For instance, in 2021, “France 2030” was created. The French government will invest 54 billion. This program will support strategic investment priorities that respond to the major transition challenges, particularly ecological ones, of the economy and French society. For instance, the aim, thanks to investment, is to produce 2 million of electric and hybrid vehicles or develop small, innovative nuclear reactors in France with better waste management.
The trade sanctions are governed by the Common Foreign and Security Policy (hereinafter “CFSP”), it’s a mean for EU members to act together on certain foreign policy issues, while keeping their sovereignty. In other words, France keeps its sovereignty but decides if it is necessary to take trade sanctions with the other EU members. In France, the Directorate General of the Treasury, is in charge of negotiations of European regulations on economic and financial sanctions and ensures their application. The political regime governing the sanctions in response to the war in Ukraine, did not evolved itself. However, following the begging on the war, EU decided, to suspend EU trade defence measures in force against imports of goods from Ukraine for a year. An extension of one additional year was approved on the 5th of July 2023. EU is working on a Regulation to better tackle sanctions’ circumventions. This tool will enable the EU to restrict the sale, supply, transfer or export of certain goods and technologies subject to sanctions to certain third countries whose territory is deemed to be exposed to a high and constant risk of being used for circumvention purposes. Finally, in 2022, the Council of EU adopted a decision which seeks to add the violation of restrictive measures to the list of EU criminal offenses of the Treaty on the Functioning of the European Union.
In the EU, trade remedies are: anti-dumping duties, countervailing duties / anti-subsidy duties, and safeguards duties. According to the 41th Annual Report from the Commission to the European Parliament and the Council regarding the EU’s Anti-Dumping, Anti-Subsidy and Safeguard activities and the Use of Trade Defense Instruments by Third Countries targeting the EU in 2022, at the end of 2022, 177 definitive trade measures were in force. More precisely: 117 antidumping measures, 21 anti-subsidy measures and 1 safeguard measure. Among these 117 dumping measures: 69 affected the People’s Republic of China (hereinafter “PRC”), 11 Russia and 5 Korea. Regarding the 21 anti-subsidy measures, 10 affected PRC, 4 India and two for Indonesia and Egypt. In addition, between 2018 and 2022, the Commission initiated 60 news investigations on imports. Among which, 26 investigations were about Iron. In addition, among the definitive anti-dumping measures in force on 31 December 2022: more than 35 were about steel, 10 about Aluminum and 10 on Bicycles.
The EU has jurisdiction in the field of trade remedies and implements WTO rules on trade remedies. The main regulations on dumping, subsidies, countervailing measures, and other safeguard measures include: • The Anti-Dumping Regulation (EU) 2016/1036, • The Countervailing Duty Regulation (EU) 2016/1037, • The Safeguard Regulations (EU) 2015/478) with regards to imports from WTO countries and (EU) 2015/755 with regards to imports from non-WTO countries, The competent authority for investigating and deciding on trade measures is the European Commission. It oversees the implementation of trade defence instruments, ensures the enforcement of measures, and discusses future rules with international partners. Nevertheless, the Commission must seek the opinion of the Trade Defence Committee for major decisions, such as: the introduction, modification or cessation of definitive measures. The customs authorities of EU’s member states are responsible for enforcing anti-dumping and countervailing duties. The European Anti-Fraud Office is also working closely with the EU Commission and members’ states authorities to monitor the application of the sanctions and thus, combat all forms of fraud.
If the Commission determines that dumping is taking place and is harmful to the EU industry, it may recommend the imposition of anti-dumping duties to level the market conditions. It is vital to note that any non-cooperation or inaccurate information can have negative consequences.
Finally, there are also safeguards measures. Four conditions must be met: increase of importations, a serious injury, causal link between the two events and assess EU’s interests. It is also important do underline that, safeguards measures can only be seek by an EU members. Thus, not by a group of people or a company.
For an activity to be considered circumvention, evidence must also show that:
If an operator is bypassing the duties in place, the European Commission can initiate an investigation if:
If it’s determined that circumvention has occurred, the existing duties will be extended to imports from the country or operator found to be circumventing them. The duties then apply retroactively from the date the investigation started.
Within the framework of its trade policy, the EU is guided by strict principles to ensure fair trade practices. For instance, EU used the lesser duty rule. According to this rule, EU determines a duty rate based on the dumping margin. However, if a lower rate can eliminate the harm caused, then that rate prevails (Article 9(4) of the Anti-Dumping Regulation). European authorities uses also the “Union interest test” (Article 21 of the Anti-Dumping Regulation). This test, assesses whether the application of trade measures would be in the best interest of the Union. In certain exceptional situations, even if there is a dumping, corrective measures might not be imposed if these measures lead to disproportionate consequences for consumers or users of imported products.
Decisions of the European Commission on trade remedies can be appealed before the Court of Justice of the European Union (hereinafter the “CJEU”) (Article 263, TFEU). Initially, the dispute is reviewed by the General Court, and if needed, can then be brought before the CJEU. Parties are required to submit an application within a two-month timeframe. After this, the defense (the EU institution concerned) has also two months to provide its observations. The President of the respective judgment formation may grant permission for additional written submissions (reply/rejoinder). Once the written procedure is completed, an oral session might be convened, either upon request of the parties or if the judges deem it necessary.. Any ruling made by the General Court can be appealed before the CJEU, knowing that such an appeal must be lodged within a period of two months from the notification of the judgment of first instance. Finally, there is also the possibility for a preliminary ruling procedure where nationalcourts and tribunals of Member States, can refer to the CJEU to assess the validity of acts adopted by the EU institutions.
As underlined before, decision related to trade are of EU’s competence. In August 2023, Indonesia requested consultations with the EU regarding the definitive countervailing duties on imports of biodiesel from Indonesia, as well as the underlying investigation that led to the imposition of these duties. Indeed, EU imposed in November 2019 a definitive countervailing duty on imports of biodiesel originating in Indonesia as well provisional countervailing duty on imports of biodiesel originating in Indonesia in August 2019. On 4th October 2023, consultations took place but parties did not manage to find an agreement. Thus, on the 13th October 2023, Indonesia requested the establishment of a panel.
In 2021, the Directorate-General for Taxation and Customs Union (DG TAXUD) conducted a feasibility study on the introduction of binding value information (BVI) decisions at the EU level.
Before adopting any customs decision, the customs authorities must provide the operator with their findings and grant a 30 day-period for them to exercise their right to be heard. Final customs decisions can be challenged directly before the Customs Administration by bringing an administrative appeal. All challenges must be made before the authority that signed the assessment notice within three years of notification. The regional director of the customs authority or the tax collector then has six months to reply.
The Customs Administration can reject the appeal either:
The economic operator can then appeal to the competent civil court within two months of an explicit rejection. There is no specific time limit to bring an appeal against an implicit decision under the Customs Code.
The EU has signed several preferential trade agreements that either reduce or eliminate customs tariffs. Additionally, certain products and developing countries benefit from unilateral preferential treatment under the GSP Regulation 978/2012. . The GSP Regulation implements a general regime granted to all goods listed in its Annex V originating in the beneficiary countries, except for certain product/country pairs. The applicable customs duty depends on whether the product is classified as sensitive or non-sensitive in Annex V.
All tariffs and other import measures applicable to any given product, including preferential tariffs, are available on the EU Access2Markets website.
a. Authorised Economic Operator (AEO) or equivalent programme? The EU AEO status, is implemented in France. Economic operators can be certified for customs simplification (AEOC, Article 39 of UCC), security and safety (AEOS), or a combination of the two. AEO status granted in one EU member state is recognized in all other member states. b. Mutual recognition arrangements (MRAs) with other jurisdictions in relation to their AEO programmes? The EU has concluded MRAs of AEO programs with Norway, Switzerland, Japan, Andorra, the US, China, and the UK. Further negotiations are currently taking place or will be launched in the near future with other major trading partners. In addition, the EU is providing technical assistance to various countries to help them set up their own AEO programs. The list of mutual recognition agreements is available at European Commission: Mutual Recognition. c. Suspension of duties on any goods imports (for example, for goods for which there is no domestic production)? The EU can implement tariff suspensions to enable EU enterprises to use raw materials, semi-finished goods, or components without having to pay the normal duties set out in the Common External Tariff (CET). Tariff suspensions are approved on the basis of Article 31 of the TFEU. This regime is governed by Communication from the Commission concerning autonomous tariff suspensions and quotas 2011/C 363/02 of 2011. The list of goods currently under suspension can be found in Regulation (EU) 2021/2278, which is reviewed every six months. d. Allowing goods imports valued below a certain amount to enter duty free (de minimis shipments)? Goods worth less than 150EUR can be imported into the EU duty free (Article 23, Regulation (EC) 1186/2009). From 1 July 2021, various changes have been introduced to the way VAT is charged on online sales, whether consumers buy from traders in or outside the EU. For more information, see the European Commission’s Explanatory Notes on VAT e-commerce rules.
EU member states can designate parts of the customs territory of the Union as “free zones”. Free zones are enclosed areas within the customs territory of the Union where non-Union goods can be introduced free of import duty, other charges (that is, taxes) and commercial policy measures. France has two free zones: the Free Zone of Verdon and the Free Zone of Guyane. Storage in customs warehouses is designed to give businesses the flexibility to buy and import non-Union goods before they have decided what to do with the goods. Stored goods are not subject to import duties and other charges as long they remain in storage. The amount of working or processing allowed on goods held in warehouses is limited essentially to keeping them preserved with a view to subsequent distribution. However, it is possible to process goods under inward processing or processing under customs control on the premises of a customs warehouse. Non-Union goods can be stored in any customs warehouses authorized by the customs authorities. Storage can be for an unlimited period, unless the nature of the goods means that they could pose a threat to health or to the environment if stored for a long term. While in warehouses, the goods are under customs supervision and are not subject to import duties or other charges related to the import of goods or to commercial policy measures (such as import licenses).
The European Commission proposes, prepares, and negotiates the EU’s international trade agreements. The Council of the EU decides jointly with the European Parliament whether to approve EU trade agreements. It is important to underline that, only mixed agreement, so is an agreement that involves areas of shared competences or member states’ competences, must be ratified by member states to enter into force. The ratification of treaties in France is a process governed by the Constitution. While the President of the Republic holds the power to negotiate and ratify treaties, Article 53 states that specific agreements, such as those affecting state finances or modifying legislative provisions, require the approval of the Parliament. This body, through the Foreign Affairs Committee, reviews, adopts, or rejects treaties. Moreover, the constitutionality of treaties can be checked by the Constitutional Council upon request from 60 deputies or senators.
Under the Trade Barrier Regulation ((EU) 2015/1843), EU exporters and individual member states can request the European Commission to investigate alleged trade barriers imposed by non-EU countries that are contrary to international trade rules. A request can be made by any EU person, company, or association claiming to have suffered injury or adverse trade effects as a result of foreign trade barriers. If there is sufficient evidence of trade obstacles or of an injury, the Commission can conduct further investigations by announcing it in the Official Journal of the EU. Foreign trade barriers are usually challenged by the EU or governments of EU member states before the WTO or under any other applicable dispute settlement mechanism. With the adoption of Regulation (EU) 2021/167 on the exercise of the Union’s rights for the application and enforcement of international trade rules, the EU is now able to act in a wider range of circumstances. For instance, rules empower the EU to act to protect its trade interests within the WTO and under bilateral agreements when a trade dispute is blocked despite the EU’s good faith efforts to follow dispute settlement procedures (previous rules only allowed action after dispute settlement procedures had been completed).