October 24, 2021

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Clear Variations Stay Between France and U.S., French Minister Says

Clear Differences Remain Between France and U.S., French Minister Says

PARIS — As world finance leaders collect this week in Washington for the annual conferences of the Worldwide Financial Fund, Bruno Le Maire, the finance minister of France, made clear that efficient French-American cooperation on an overhaul of the international tax system couldn’t masks stark variations on China and different points.

“America desires to confront China. The European Union desires to interact China,” Mr. Le Maire, a detailed ally of President Emmanuel Macron of France, stated in a wide-ranging interview forward of the conferences. This was pure, he added, as a result of the USA is the world’s main energy and doesn’t “need China to grow to be in a number of years or in a number of a long time the primary superpower on this planet.”

Europe’s strategic precedence, against this, is independence, “which suggests to have the ability to construct extra capacities on protection, to defend its personal view on the battle in opposition to local weather change, to defend its personal financial curiosity, to have entry to key applied sciences and never be too depending on American applied sciences,” he stated.

His remarks mirrored unresolved tensions that got here to the floor final month in a furious disagreement between France and the USA over President Biden’s determination to offer nuclear-powered submarines to Australia. The deal changed an earlier French contract to promote Australia standard submarines. Mr. Macron was not knowledgeable of Australia’s plans until the last minute.

“Clearly there was at the least an vital misunderstanding between France and the USA, and there has additionally been, I’d say, misbehavior from the U.S. administration,” Mr. Le Maire stated.

The important thing query now for the European Union, he stated, is to grow to be “unbiased from the USA, in a position to defend its personal pursuits, whether or not financial or strategic pursuits.” Nonetheless, he added, the USA stays “our closest companion” by way of values, financial mannequin, respect for the rule of legislation, and embrace of freedom.

However with China, he stated, “We don’t share the identical values or financial mannequin.”

France and the USA are striving to repair the damage from the submarine deal and the French ambassador, who was recalled to Paris in protest, has returned to Washington. Mr. Macron, who will meet Mr. Biden this month, desires to see a larger American dedication to unbiased European protection ambitions that he says could be complementary to NATO, in addition to proof of American respect for European strategic ambitions within the Indo-Pacific area.

Requested if variations over China meant inevitable divergence between the USA and Europe, Mr. Le Maire stated, “It may very well be if we aren’t cautious.” However each effort must be made to keep away from this, which suggests “recognizing Europe as one of many three superpowers on this planet for the twenty first century,” alongside the USA and China.

An space the place Europe and the USA have been working in lock step is on monetary reform. Efforts to press essentially the most sweeping overhaul of the worldwide tax system in a century are nearing a breakthrough.

Finance ministers of the Group of 20 largest economies are anticipated to again an accord on the I.M.F. conferences as early as Wednesday, following a landmark deal final week by practically 140 international locations to create a 15 p.c world minimal company tax and new guidelines that might drive company and expertise giants like Amazon and Fb to pay an applicable share of tax wherever they function.

The pact, meant to crack down on tax havens which have drained international locations of much-needed income, follows months of negotiations which have included intense behind-the-scenes lobbying by Mr. Le Maire and the U.S. Treasury secretary, Janet Yellen.

Mr. Le Maire stated that he had labored “very nicely with Janet Yellen on many key points,” and was decided to enhance the connection between the 2 international locations. “However it’s also as much as the USA to take some selections in the appropriate path to revive confidence between the 2 continents and between the 2 international locations.”

One of many greatest lingering factors of competition is over metallic tariffs that former President Donald J. Trump imposed globally in 2018. Officers face difficult negotiations in coming weeks. Europeans plan to impose retaliatory tariffs on a variety of U.S. merchandise as of Dec. 1, except Mr. Biden pulls again a 25 p.c responsibility on European metal and a ten p.c tax on aluminum.

“If we need to enhance the bilateral financial relationship between the continents, step one should be for the USA to carry the sanctions within the metal and aluminum case,” Mr. Le Maire stated. “We’re fed up with the commerce wars,” he added. “It’s clearly not within the curiosity of the USA and never within the curiosity of the E.U.”

Enhancing financial stability within the wake of the pandemic is essential. Mr. Le Maire has overseen a large support program to steer France out of a historic recession that included beneficiant state funding to stop mass layoffs by subsidizing wages and reduction for companies struggling to pay their payments.

The help is now being wound down because the economic system stabilizes amid widespread vaccinations. The economic system is predicted to develop 6.25 p.c this 12 months, whereas unemployment, a political lightning rod six months from a presidential election, is projected to fall to 7.6 p.c by year-end, the bottom in over a decade.

The rebound is essential as France gears up for its election in April. Mr. Le Maire stated he’s beginning a political motion to again the re-election of President Macron.

The far proper is presenting a robust problem as Éric Zemmour, a author and TV celeb identified for his anti-immigrant nationalism, features floor in political polls by tapping into insecurity over immigration and fears of rising financial inequality from globalization.

“You’ve gotten extremist events rising all over the place in Europe and all over the place within the Western international locations as a result of many individuals are afraid of what’s taking place as a consequence of local weather change, as a result of technological revolution, as a result of vital strikes of migration,” Mr. Le Maire stated. “The easiest way to battle in opposition to extremist events is to get outcomes,” he stated.

However within the nation the place the anti-elite Yellow Vest protest motion raged for a lot of months, beginning in 2018, Mr. Le Maire acknowledged that the frustrations that fueled the mass protests might flare once more in France and unfold to different European international locations if inequality worsens as governments attempt to sort out local weather change by shifting away from low cost gas to renewable vitality sources.

With the value of vitality wanted to bridge that transition hitting report highs, “local weather transition stays a danger for all of us, for all democracies, as a result of it is going to be very pricey — way more pricey than anticipated,” Mr. Le Maire stated.

“I actually assume {that a} new Yellow Vest motion stays potential all over the place inside Europe,” he added. Securing a world tax deal will probably be essential to assist keep away from that by bringing governments an important supply of latest income to scale back inequality divides, he stated.

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