Resetting France-US Partnership – Analysis


By Ankita Dutta

President Emmanuel Macron’s visit to the United States (US) was aimed at reaffirming their economic, defence, and political partnership. The visit came against the backdrop of a difficult time for the transatlantic partners with tension ranging from increasing economic vulnerabilities, the ongoing conflict in Ukraine, and soaring energy prices. While the visit was low on deliverables, it allowed both leaders an opportunity to discuss a range of issues on which either they have convergences such as bilateral relations; have different outlooks such as the Inflation Reduction Act, or have converging interests but a different approach like the Ukraine crisis.

The key outcome of the visit was that it sent out a positive signal that the bilateral relations were on track for both France and the US. The relations had taken a turn for worse in 2021 when Washington announced AUKUS with Australia and the United Kingdom (UK). This led to the cancellation of a multi-billion euro project to supply Australia with submarines by France. AUKUS was described as ‘brutal, unilateral, and unpredictable’ and “a stab in the back” by the French Foreign Minister Jean-Yves Le Drian and led France to recall its ambassador from Washington and Canberra, who have since returned. However, the crisis in Ukraine changed the trajectory of the relations, with France emerging as a key ally for the US in the region. The state visit represented the normalisation of the relations as both leaders unified their positions to address the crisis in Europe. The first state visit under the Biden administration and the choice of the French President as the first state visitor—also signalled Washington’s preferred partner in Europe.

Moreover, the joint statement issued following the meeting highlighted that the US and France are on the same page on issues of critical importance such as climate, space, energy, trade, etc. The statement “outlined a shared vision to strengthen security and increase prosperity worldwide, combat climate change, build greater resilience to its effects, and advance democratic values”. However, two issues stand out in the document: First, on Russia, both partners noted Moscow’s “irresponsible nuclear rhetoric and its disinformation regarding alleged chemical attacks, and biological and nuclear weapons programs” and resolved to “hold Russia to account for widely documented atrocities and war crimes, committed both by its regular armed forces and by its proxies”, thereby hardening their positions towards Russia while recommitting both their countries’ support to Ukraine. Second, China was pointed out as a key competitor as well as partner for both countries in the Indo-Pacific region, where both leaders reiterated to “continue to coordinate on our concerns regarding China’s challenge to the rules-based international order, including respect for human rights, and to work together with China on important global issues like climate change”.

A key agenda of the visit was the averting of a potential trade war between the US and the European Union (EU). Two bills passed by the US Congress—TheInflation Reduction Act (IRA) and the CHIPS and Science Act—have been at the centre of intense discussions between the transatlantic partners. The IRA offers approximately US$ 370 billion in subsidies for the adoption, mitigation, and transition to clean energy. One of the key aspects includes tax credits for buying electric vehicles if they are assembled in the US, and their parts and components are made either in the country or in ‘free trade partners’. The CHIPS Act provides US$52 billion for semiconductors companies to establish their plants in the US. Both these acts are viewed as unfair by the European partners as they see these as unjustly subsidising US companies at the cost of European competitiveness. Moreover, with the economic slowdown due the Ukraine conflict, there are other economic issues at play in the partnership. The US and EU have maintained a unified stand on the sanctions against Russia; however, as the conflict drags on, it is felt that the European countries have paid a higher price with increased energy prices and inflation. This has put European industries at a disadvantage and these acts further dent the economic recovery process in the continent. The European countries have accused the American administration of discriminating against foreign companies and encouraging the ‘Buy American’ concept. As a response, many of the member states have called for formulating a European subsidy regime to include a ‘Buy European’ package.

The discussions on these diverging issues were a key element of President Macron’s agenda. While President Biden said that the ‘US makes no apologies’ for the IRA, he added that there were ‘tweaks’ that were needed in the Act, with President Macron emphasising on the ‘resynchronisation and discussion’ of the impact of this legislation on the US allies. However, no details of what these ‘tweaks’ will be or how they will resolve the issue were provided. Also, it remains unclear how these are going to be implemented given that the IRA has already been cleared by the Congress and it comes into force on 1 January 2023.

Also the nuanced approach to the crisis in Ukraine of both the US and France was highlighted during the visit. As the conflict enters its 10th month, transatlantic partners have shown a unified front in addressing the fallouts of the conflict. However, subtle differences in American and French approaches to the conflict were visible. President Biden said that while he had “no immediate plans to contact Mr. Putin,” however, he was open to the talks “if the Russian President decides that he’s looking for a way to end the war.” On the other hand, President Macron said that he has maintained frequent contact with President Putin since February. President Macron highlighted the three-pronged approach that France has taken for Ukraine – ‘First, help Ukraine resist; second, never give up on anything in the U.N. Charter.  Prevent any risk of escalation in this conflict; and third, make sure that, when the time comes, on basis of conditions to be set by Ukrainians themselves, help build peace’. While France has maintained flexibility and is concerned regarding the possible escalation of the conflict in the coming months, the US, on the other hand, has remained focused on supporting the country ‘as long as it takes’. However, as the winter sets in, how the conflict will shape remains to be seen, but what is certain is that a ‘war fatigue’ in Europe and the US might become a real issue and both partners need to work to find a middle ground to push for negotiations.

In short, President Macron’s state visit to the US appears to be: first, a step towards overcoming key challenges in the bilateral and transatlantic relations; and second, to coordinate closely on foreign policy issues. The state visit has sent out a clear message that the relations have moved beyond the concerns of 2021 and provided an opportunity for France to re-shore its foreign relations and for the US to bolster its relations with the old partner in the continent. This is primarily because the US’ allies in Europe are still trying to find their feet—the UK in the aftermath of the political crisis and Germany in the aftermath of Angela Merkel’s departure. This has led to the emergence of President Macron as the longest-serving G7 leader on one hand and as the most prominent and consistent voice on Ukraine in Europe, on the other. For France, this visit was crucial as it solidified its position as US’ key and oldest ally in the region, and reinforced its leadership position within the European Union. While the leaders may not have seen eye-to-eye on various issues, the visit has provided an opportunity for both allies to enhance bilateral cooperation and bolster transatlantic relations.

Observer Research Foundation

ORF was established on 5 September 1990 as a private, not for profit, ’think tank’ to influence public policy formulation. The Foundation brought together, for the first time, leading Indian economists and policymakers to present An Agenda for Economic Reforms in India. The idea was to help develop a consensus in favour of economic reforms.

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