In this address I would like to highlight five points which clearly show the importance of globalization for France :

I. France's place in the globalization process,

II. France's economic liberalization on the back of globalization,

III. The link between local and global affairs in the globalization process.

IV. WTO negotiations.

V. The attractiveness of France

I. The most striking response of our developed societies to globalization is fear of decline

Minor intellectuals and news hacks know how to play on public fears and use their position to spread the idea of decline. This is a false idea.

 Our developed societies, including France and the United States, have not been harmed by "global" economic development. On the contrary, most of the evils in our societies have nothing to do with globalization.

It is a fact that France is a strong contender in international trade :

· The French economy currently accounts for 5% of global trade and global GDP, whereas France's population accounts for less than 1% of the world population. In 2005, France was the 5th-ranked global exporter of goods (with more than €350 bn) and the 4th-ranked global exporter of services (with over €90 bn).

· In terms of GDP, France ranks 6th in the world and 3rd in Europe.

· In terms of foreign direct investment, France ranks 3rd behind the United States and the United Kingdom with a stock of $535 bn, i.e. 6% of the global aggregate. More than any other figure, this amount demonstrates the enduring attractiveness of French territory for foreign investors. I will elaborate on that point later on

II. Our economies are not victims of globalization but beneficiaries

 Relocations and financial globalization are considered to be the main cause of our woes, reflecting a mindset which is more concerned with the interests of shareholders than with the needs of our fellow-citizens.

Yet relocations account for only a tiny fraction of job cuts

 First, we need to distinguish clearly between actual relocations and French foreign investments. The latter are a good thing, both necessary and beneficial.

· Investment in foreign countries is a sign of sound health and a necessary tool for survival in our internationalized world: the markets of the future are located in emerging countries such as India and China, not in France.

· The ten French industrial sectors with the largest foreign investments have simultaneously created one hundred thousand jobs in France.

 We must not exaggerate the importance of relocations. For every job destroyed by relocation, foreign investment creates two new jobs in France.

· Without exception, economic studies show that fewer than 5% of the jobs destroyed in France each year are destroyed by relocation.

· What makes the negative aspects of globalization - such as relocations - seem especially apalling is that they frequently hit a single sector or territory. The positive aspects tend to be more dispersed, less spectacular, and therefore less obvious to the public.

· Finally, the decline in industrial employment is mainly due to the emergence of a knowledge society and a service-based economy.

III. Lastly, there is a third type of response to globalization, namely the assertion that national interests need to be protected, whether or not springing from genuine concern

A) All countries - with the possible exception of the United Kingdom - make no secret of their intention to protect the economic interests of their territory and businesses.

· There is no contradiction between globalization and one's home country. Globalization does not mean the death of one's country, just as protection of one's country does not mean a dislike of globalization, since local and global affairs are closely intertwined.

· Globalization does not affect corporate nationality. The nationality of a business is not determined primarily by the color of its capital or shareholders but by its history and culture. In today's environment, a company's nationality depends upon its governance and sense of social responsibility.

· The intuitive wish of our fellow-citizens to make their local environment and home country the pillars of globalization is not only emotionally and democratically fair, it is also economically relevant.

· Just as the construction of a single Europe does not imply the disappearance of Europe's nation states, globalization does not imply the replacement of the "old" economy by a "new" economy but its transformation and integration in new economic forms.

B) France is one of the most open economies in Europe :

France's relative openness to the world economy - i.e. the ratio between France's international trade and GDP - went up from 11% in 1960 to 22% in 2005. At the same time, the UK ratio rose from 16 to 20% while the US ratio improved from 3 to 10%.

This comparison shows, first, that the French economy is extremely open and, secondly, that it managed to convert itself rapidly during this period. France does not suffer from inertia, as is all too often asserted.

During this period, France opened itself to the world economy and to foreign capital while large French corporations became European and even global champions.

France is the home of eight players which rank among the one hundred largest groups in the world : Total, PSA, France Télécom, Renault, Saint-Gobain, Vivendi, Alstom and Sanofi.

The companies in the CAC 40 stock index post two-thirds of their sales and employ two-thirds of their employees outside France.

· One in seven employees in France's private sector works for a foreign company (according to Insee, the French statistics agency), compared with an average of one in ten in the European Union. In this respect, we are more open than the British, the Germans and the Dutch.

· The openness index published by UNCTAD gives an average of 12 for the developed countries, compared with 13 for France and 8 for the United States.

· Moreover, foreign businesses are firmly established in France and contribute strength: they account for 45% of our goods exports and 30% of our goods and services exports.

France is not only an open economy, it contributes actively to initiatives to make the economy more open, most notably through the WTO.

IV. Using the WTO to rationalize globalization

In conclusion, I would like to review the WTO negotiations, since it is one of the foremost tools for rationalizing globalization, even if not the only one (others include ILO, OECD, IMF, etc.).

 Trade can help integration in the world economy but can never do the job alone. Like the construction of a single Europe, it needs to be guided by a political process.

· The WTO represents the political dimension of globalization. Through its international rules, the WTO allows us to lay the groundwork for controlled development and globalization.

· The WTO has become a symbol of globalization because it is the only international regulator with a genuinely binding legal system.

 The Doha objectives and our interests :

The development round launched in Doha in November 2001 is an ambitious round with 3 objectives:

 (i) continuing to open up global trade;

 (ii) developing new multilateral rules for global trade;

 (iii) fostering better integration of the developing countries in global trade.

Our interests :

· Our businesses have much to gain from increased liberalization of trade and rules guaranteeing fair and equitable trade practices.

· The liberalization of the machine sector alone could boost exports by $35 bn, which would represent 500,000 new jobs in Europe.

 Main results of the Hong Kong meeting in December :

- Agricultural support is set to end by 2013 provided our partners offer equivalent market access;

- Special measures for the Least Developed Countries (LDCs): application of the Everything But Arms initiative by other developed countries in the WTO (+ pharmaceuticals and cotton).

 Most recent WTO developments :

While the concrete results of the G6 meeting in London (10-11 March) seem to be limited, DG Pascal Lamy still wants to lay the groundwork for a global "agreement".

The parties continue to hope for a positive momentum in the triangle formed by the United States (domestic support for agriculture), the European Union (access to the agricultural market) and Brazil (NAMA).

V. The attractiveness of France

France offers significant strengths for investors, including the following seven :

- France is situated in the heartland of a market with 460 million consumers and GDP of over € 10,500 billion ;

- France's economic weight is higher than its demographic weight (with 5% of global GDP and 1 % of the world population); moreover, it is the 5th-ranked exporter of goods and the 4th-ranked exporter of services in the world ;

- France has one of the best infrastructure networks in the world: a dense road network, a reliable railroad network and several major international airports ;

- hourly labor productivity is among the best in the world. It is 2% higher than US productivity and 16% above the European average ;

- workers are skilled and open to foreign languages: 36% of French citizens from 25 to 34 years old have higher education, compared with an average of 28% for Europe and 31% for the United Kingdom. Moreover, 32% of the French speak English, compared with 17% for the Spanish and 27% for the Italians. Lastly, 53% of the French speak 3 living languages, compared with 18% of American citizens ;

- the labor climate in the private sector is better than is often asserted: the number of days of strikes per 1,000 employees is 25% lower than in the United States ;

- setting up a business is easier in France than almost anywhere else in the world in terms of number of procedures, times and cost. This conclusion is mainly based on the World Bank's Doing Business report, which praises France's good performance in this area.

In recent years, these strengths have been consolidated by a series of measures intended to make France's business environment even more attractive.

These measures include :

    - a tax reform :

· a local business tax reform introducing a cap of 3.5% of value added and exemption for new investments ;

· a historic tax reform for private citizens which aligns France with international standards: the aggregate amount of all taxes combined is limited to 60% of income, while the upper marginal income tax rate has been lowered to 40% ;

· a more flexible tax regime for impatriates, particularly tax exemption of expatriation bonuses.

    - measures to promote business growth :

· reform of winding-up proceedings in order to anticipate difficulties and to intervene further upstream ;

·i nitiatives to foster employee stock ownership ;

· exemption from capital gains tax on shares held for 8 years or more.

    - adaptation of labor law through the before-mentioned measures, which are making the labor market more flexible;

    - simplification of establishment conditions for foreign investors, particularly as regards the delivery of working and residence permits for senior managers and their family.

The resolve reflected in these government measures remains just as strong in 2006 : new measures are on the drawing board to make France even more attractive for foreign investors.

France has chosen to welcome and assist foreign investors. This choice is paying off: France is one of the top-five destinations for foreign direct investment in the world with €38.3 billion in 2005.

Moreover, France is the second-seeded destination for direct establishment in Europe, right behind the United Kingdom. With 580 projects in 2004, foreign investors created or preserved 30,000 jobs.

Foreign investment is beneficial for the French economy and employment since it creates employment and takes a commercial or industrial approach. This is why the government pursues the policy I have just described to make French territory more attractive and this is why the French authorities are available to help potential investors realize their projects.

In conclusion, I have drawn a picture of France as a country which is opened to the world and has chosen to play a role in the regulation of global trade.

Thank you for your attention.