France in the Global Value Chains : Revisiting the Competitiveness Loss

The increasing fragmentation of production across borders (the “global value chains” — GVCs) has important implications for the analysis of competitiveness. Two new databases allow to refine the assessment of France's competitiveness. In this context it appears that: 1) France export market shares in value added declined faster than in other European countries. This confirms the loss of competitiveness highlighted using gross exports. 2) Exports contribution to GDP is smaller in France than in other European countries of the same size. Moreover, the contribution of exports to France's income has declined since 2000. 3) Trade in value added terms shows that European countries are less significant trade partners than suggested by traditional trade data. This is largely due to the fact that the importance of Germany as an export market is much smaller in value added terms than in gross terms. In contrast, the importance of the United States and, to a lesser extent, Japan as trading partners is substantially larger. This leads to nuance trade linkages. 4) Services are crucial for France export performance. Services contribute to 55 percent of exported domestic value added. Therefore, productivity gains in services would have a positive impact on France export performance