France, Romania's third commercial partner

Romanian-French trade relations are at a high level as long as France ranks third in the dynamics of Romania's economic relations with other countries, being also the third foreign investor in our country, but also in the top 10 - 9th place th, regarding the goods and services provided by French companies to Romanian partners, according to the data provided by the National Association of Exporters and Importers from Romania.

Mihai Ionescu, president of ANEIR and co-president of the Export Council - a body that operates under the Ministry of Economy, Entrepreneurship and Tourism - told BURSA Newspaper: "France, indeed, is one of our first commercial partners, after Germany which occupies second place. If it wasn't for the "marriage" with Renault at Dacia Pitesti, which was realized thanks to the late Mr. Constantin Stroe, these economic relations would probably have remained at a rather low level. Both through Dacia and through the components that are made in connection with the cars produced in Pitesti, we have important export and import volumes with the French. We are also satisfied, and they are satisfied with this relationship, but that does not mean that there is no room for better".

According to the balance sheet for the past year, bilateral trade with France registered an increase of 8.1%, reaching 11.6 billion euros, being also supported by the 4150 French companies operating in our country. However, although France consolidated its market shares in 2023, the bilateral trade balance has deteriorated significantly, and France has a deficit of 1.2 billion euros on its relationship with Romania.

Mihai Ionescu told us: "Although there are over 4100 French companies in Romania, we are not interested in their number, but in the fact that they are quality investors. We need an entrepreneurial culture to harmonize with French investors. We have the same Latin roots, the French language was and is for many generations in our country a close language, and we expect the French side to do more for the development of economic and commercial relations with Romania. Unfortunately, there were not the best auspices, from a political point of view, to encourage such developments. Maybe now, with the new changes in the political structure in France, there will be a different kind of approach and we will no longer be seen as a second-rate people. Unfortunately, we were often treated this way by the French. Regarding the trade deficit recorded last year by France in the relationship with Romania, compared to the trade deficit of more than 30 billion euros that we have annually, the one billion euro deficit recorded last year by Hexagon with us is not a catastrophe, if we only look at the economic power that country has. We are interested in being able to value Romania's natural resources in these commercial relations, but not in the manner of taking them from us in the country and processing them in them. We can process them internally, in Romania. We still have deficient economic sectors such as the chemical industry, the agro-food industry, sectors in which France has a wealth of experience and could make many partnerships in our country through which we can value our natural resources either in the field of the chemical industry or in the food industry, and with advanced technology from the French side, with market education and international market opening - as France has - to be able to reduce Romania's trade balance deficit. That is our target and our main concern."

As for French companies, they are present in many sectors of economic activity and play an important economic and social role. Almost all the most important companies from France, which are in the CAC 40 index - that is, 35 of the 40 companies - are present on the Romanian market and are often leaders or co-leaders in their sector. The French presence is also structured around a diversified network of SMEs and companies created by the French. In total, in 2023, almost 4,150 companies with majority French capital were identified, which had more than 125,000 employees and which had a cumulative turnover of 18 billion euros, i.e. 8% of Romania's Gross Domestic Product. The French presence is important in manufacturing and distribution. On the automobile market, the manufacturer Dacia-Renault, which has 18,000 employees, is a company around which more large suppliers include Forvia (7,400 employees), Michelin (4,700 employees), Valeo (1,500 employees), Hutchinson (900 employees) and Akwel (500 employees). Also in the industry, the Saint-Gobain, Airbus, Thalès and Air Liquide groups play an important role in their market. In the energy sector, the Engie group is the largest gas distributor in the country, with almost 2 million residential customers, while the Orange group, with almost 11.1 million customers, is the main mobile operator. The Romanian branch of the Carrefour group is the third largest retailer and maintained a positive dynamic in 2023, with a 12% increase in turnover. In addition, the Auchan and Leroy-Merlin groups are also influential players in their markets, and in the banking sector BRD - Groupe Societe Generale is the fourth commercial bank in Romania in terms of assets, while Groupama occupies a central place in the insurance sector and became in 2023 the leader in the car insurance segment.

However, members of ANEIR and the Export Council believe that a change of attitude on the part of French companies would further boost economic relations between the two states.

Mihai Ionescu, president of ANEIR and co-president of the Export Council, told us: "We expect from the French side to have a different attitude, of collaboration, of friendship, of empathy with the Romanian economy and with the partners in our country, that is, not we are still treated as pariahs of the European Union. We, the Romanians, who have a great expressed sympathy and a tradition and cultural ties with France, consider France as our second homeland in terms of cultural value, but from an economic point of view our relations are still suffering, Romanian entrepreneurs being treated with superiority by their Hexagon counterparts. That is why I believe that a change of attitude on the part of French trading partners and investors would lead to an unprecedented development of economic relations between the two states".

We also mention that in the relationship with our country, although bilateral trade increased by 8.1% last year, the position has decreased in the last five years, due to the polycrises that dominated Europe during 2020-2022. After surpassing its pre-pandemic level in 2021, trade between France and Romania reached 11.6 billion euros in 2023, but despite this progression France's market share tends to decline in the face of intense competition from emerging countries ( China, Turkey ) and the regional competition exercised by Poland, Hungary and Bulgaria, countries that benefit from a significant advantage in terms of logistics costs. The French market share has decreased by 0.8 percentage points in the last five years, both in terms of exports and imports from our country.

In 2023, French exports to Romania increased by 5.7% compared to 2022, reaching 5.2 billion euros, being quite diversified deliveries in the mechanical, electrical, electronic and IT equipment sector, which represent 28.5 % of total exports, or 1.5 billion euros, mainly driven by industrial and agricultural machinery (+14.3%, i.e. 768 million euros) and electrical and household equipment (+27.9%, i.e. 381 million euro). This is followed by exports of transport equipment (+14.8%, respectively 901 million euros), as well as chemical and cosmetic products (669 million euros) and metallurgical products (503 million euros).

French imports of Romanian products increased last year by 10.1% compared to 2022, reaching 6.4 billion euros, which means a trade deficit of France of 1.2 billion euros on the relationship with Romania. 41% of these imports are transport equipment, i.e. 2.6 billion euros (+13% on a year) and 23.9% mechanical equipment, electrical, electronic and IT equipment worth 1.5 billion euros ( +17%). French imports also consist of rubber and plastic products (euro438 million), textiles and footwear (euro434 million) and agricultural products (euro289 million, up 69.1% from 2022.

France's 1.2 billion euro trade deficit with Romania recorded last year is mainly determined by the negative balance of trade in transport equipment, which represents 1.7 billion euro in 2023. The sector particularly benefits from the success in France of vehicles from the manufacturer Dacia, which has a market share of 8.8%, up by 0.3 percentage points compared to 2022.

However, in 2023 France consolidated its market share, both in export (+0.4 percentage points) and in import (+0.3 percentage points) and thus concentrates 5.2% of Romanian international trade . Trade between France and Romania is mainly driven by intragroup trade, due to the density of French subsidiaries present locally.

As for foreigns investements in Romania, France ranks 3rd, with almost 11 billion euros out of a quarter of 108.8 billion euros, being behind Germany and Austria, but ahead of Italy and the USA. Moreover, France is the second greenfield investor in our country, after Germany, but before Austria. French investments in Romania are concentrated in industry (37.9% of the total), wholesale and retail trade (16.9%), financial intermediation and insurance (14.5%), as well as construction and real estate activities (11 .7%). Regarding Romanian investments in France, that country is in 9th place in the preferences of Romanian businessmen, benefiting from investments of 110 million euros (2.5% of the total), after Cyprus (15.8 %), Moldova (8.9%), Italy (5.6%), Hungary. (3.5%), Bulgaria (5.7%) and Spain (4.5%).