French defence exports drop to €14bn

The French Armed Forces Ministry on 7 July published its 2017 report to Parliament on arms exports, which, we would like to remind our readers, are prohibited by French law unless they are authorised by the state and “under its control.” With €14bn of orders in 2016, the figure is below the €20bn forecast in February by defence minister at the time Jean-Yves Le Drian, but falls “in the same order of magnitude” as 2015 with its “nearly €17bn of order intake.

The evolution of France’s defence order intake from 2007-2016 (in €M)

 

The 100-page report points out that the “key defence sector… contributes positively to France’s trade balance by exporting on average about one-third of its turnover,” but also “ensures the balance of the Military Programme Law [MPL]” as did the exports of the Rafale to Egypt, Qatar and India for the 2014-2019 MPL.

If there has been a “radical change of scale” in French exports since 2015 “it is also thanks to a method implemented by the Minister of the Armed Forces who coordinates the political authorities, the DGA [France’s procurement agency] and manufactureres, gathered together in a ‘Team France’,” explains the report, adding that this change of method has resulted in a major transformation “by inducing new behaviours and mechanisms, based on a more adaptable approach and the search for greater overall coherence and true synergies between industrialists – large groups, middle-sized ones and SMEs – and state services, involved up to the highest level of responsibility.

On the other hand, in the face of particularly intense competition on the supply side and insofar as it is difficult for France to embark on a price war, it has been essential to take customers’ needs and expectations into as close account as possible “in order to be able to offer them the most suitable product and contractual response.”

In 2016 France granted more than 200 export licences to three countries: India (260), Saudi Arabia (218) and Great Britain (204), and more than 100 to nine others: United Arab Emirates (189), U.S.A. (186), Italy (176), Germany (153), Spain (121), South Korea (108) Singapore (106), China (104) and Turkey (100). To see all the figures, charts and the particularly interesting appendices, we invite you to consult the full report (in French only) here.

Where France’s export orders have come from in the period 2012-2016

The high level of exports in recent years “suggests that between 30,000 and 40,000 jobs will be created over 10 years,” adds the report, highlighting France’s strengths in the sector and stressing that “the France label is synonymous of quality materials, used daily by the French forces engaged in various theatres of operation. This constitutes a decisive argument in the eyes of certain partners, who are themselves engaged in operations …

The Armed Forces Ministry emphasizes that it is not because there is a new person at its head that the “export” dynamic will change. In a press release it stressed that “Florence Parly, Minister of the Armed Forces, is fully committed at the head of Team France to develop exports” and recalls that “last Thursday in Brussels, the Minister signed a declaration of intent for the sale of armoured vehicles to Belgium in the framework of the Scorpion programme.

Number of contracts by value