Clear Variations Stay 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 worldwide tax system couldn’t masks stark variations on China and different points.

“The USA desires to confront China. The European Union desires to interact China,” Mr. Le Maire, an in depth 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 develop into in a couple of years or in a couple of a long time the primary superpower on the planet.”

Europe’s strategic precedence, in contrast, is independence, “which implies to have the ability to construct extra capacities on protection, to defend its personal view on the struggle towards 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 livid disagreement between France and the USA over President Biden’s choice 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 till the final minute.

“Clearly there was a minimum of an essential misunderstanding between France and the USA, and there has additionally been, I might say, misbehavior from the U.S. administration,” Mr. Le Maire stated.

The important thing query now for the European Union, he stated, is to develop into “impartial 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 associate” when it comes to 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 restore the harm 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 higher American dedication to impartial European protection ambitions that he says can 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 might be if we aren’t cautious.” However each effort ought to be made to keep away from this, which implies “recognizing Europe as one of many three superpowers on the planet for the 21st 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 probably 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 nations to create a 15 p.c world minimal company tax and new guidelines that might power company and know-how giants like Amazon and Fb to pay an acceptable share of tax wherever they function.

The pact, meant to crack down on tax havens which have drained nations 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 effectively with Janet Yellen on many key points,” and was decided to enhance the connection between the 2 nations. “However additionally it is as much as the USA to take some choices in the best path to revive confidence between the 2 continents and between the 2 nations.”

One of many largest lingering factors of competition is over metallic tariffs that former President Donald J. Trump imposed globally in 2018. Officers face troublesome negotiations in coming weeks. Europeans plan to impose retaliatory tariffs on a spread of U.S. merchandise as of Dec. 1, until Mr. Biden pulls again a 25 p.c obligation on European metal and a 10 p.c tax on aluminum.

“If we need to enhance the bilateral financial relationship between the continents, step one have to be for the USA to raise 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.”

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

The assist is now being wound down because the economic system stabilizes amid widespread vaccinations. The economic system is anticipated to develop 6.25 p.c this yr, 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 powerful problem as Éric Zemmour, a author and TV movie star identified for his anti-immigrant nationalism, positive aspects floor in political polls by tapping into insecurity over immigration and fears of rising financial inequality from globalization.

“You’ve got extremist events rising in all places in Europe and in all places within the Western nations as a result of many individuals are afraid of what’s occurring resulting from local weather change, because of the technological revolution, because of the essential strikes of migration,” Mr. Le Maire stated. “The easiest way to struggle towards 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 may flare once more in France and unfold to different European nations 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 worth 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 will likely be very pricey — much more pricey than anticipated,” Mr. Le Maire stated.

“I actually assume {that a} new Yellow Vest motion stays attainable in all places inside Europe,” he added. Securing a worldwide tax deal might be essential to assist keep away from that by bringing governments an important supply of latest income to cut back inequality divides, he stated.

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