FRANCE France maintains no review or prior notification requirements on foreign investment in new economic activities. Acquisitions of French firms by non-EC companies (defined as 20 percent of the shares of a publicly owned firm; 33.3 percent for a non-quoted firm) are subject to a one month review period (which can be extended) and can be denied or delayed for reasons of national interest. In deciding whether to give such approval, the Government of France. often seeks commitments from investors regarding their future conduct of the activity. (EC firms are required to make an after the fact notification, or at worst are subject to a maximum 15 day delay while their EC bonafides are verified.) France does not maintain formal local content or performance requirements. 6. Export Subsidy Policies France is a party to the OECD guidelines on the arrangement for export credits, which includes provisions regarding concessionality of foreign aid. The French government maintains a foreign commercial service to promote French exports and to provide assistance to French business executives abroad. The government has begun examining ways to concentrate the benefits of its export promotion efforts more on small and medium-sized businesses. 7. Protection of U.S. Intellectual Property France is a strong defender of intellectual property rights and an advocate of improving protection. It is a party to the Berne Convention on copyright, the Paris Convention on patents, the Universal Copyright Convention, the Patent Cooperation Treaty, and the Madrid Convention on Trademarks. Until 1984, French law did not provide for injunctive relief prior to final judgment in patent infringement disputes. An amendment to the patent law that year permitted judges to grant injunctive relief in cases where the patent holder manufactures the product in France. The French patent law permits a judge to grant a compulsory license in cases where a patent is not worked in France and where the patent holder has refused to license it in France. In practice, French courts have been strict in their interpretation of this statute, and compulsory licenses have been granted in very few cases. A 1985 amendment to the French Copyright Law extended protection to computer software, although it limited protection to 25 years. It also improved the protection of video recordings. 8. Worker Rights a. Right of Association The Constitution guarantees the right of workers to form unions. Although union membership is approximately ten percent of the workforce, the institutional role of organized labor is far greater than its numerical strength might indicate. The French government regularly consults labor leaders on economic and social issues, and joint works FRANCE councils play a role even in industries only marginally unionized. Although not formally affiliated with political parties, unions are close to either the Communist or Socialist Parties. Both private and public employees may strike, except in cases where public safety may be threatened. b. Right to Organize and Bargain Collectively The principle of free collective bargaining was re-established after World War II and subsequent amendments in labor laws encourage collective bargaining at the national, regional, local and plant levels. Antiunion discrimination is illegal. c. Prohibition of Forced or Compulsory Labor d. Minimum Age for Employment of children With a few exceptions for those enrolled in recognized apprenticeship programs, children under the age of 16 may not be employed. France has an administratively determined minimum wage, revised whenever the cost of living index rises two percentage points. The standard work week is 39 hours, and overtime is controlled. In general terms, French labor legislation and practice, including that pertaining to Occupational Safety and Health, are fully comparable to those in other industrialized market economies. f. Rights in Sectors with U.S. Investment France has two small export processing zones where regular French labor legislation and wage scales apply. Labor law and practice are uniform throughout all industries of the private sector. (D) -Suppressed to avoid disclosing data of individual companies Source: U.S. Department of Commerce, Survey of Current Business 1/ Percent of civilian labor force. 2/ Since July 1990 inclusion of eastern Germany. 3/ As of August. 4/ Dec. avg., credits over DM 1 billion and under DM 5 billion. 5/ As of September. GERMANY 11/ Total public sector debt service payments for external and domestic debts; adjusted for double counting among different levels of government. Germany's economy and economic policy are dominated by the demands of reunification of the eastern and western parts of the country. Reunification, accompanied by massive transfers from west to east, unleashed tremendous demand from eastern Germany. This demand was a primary force behind surging growth (4.5 percent in 1990) in western Germany in 1990 and early 1991, high government budget deficits, and rapid elimination of Germany's current account surpluses. Real German interest rates have risen sharply over the past two years, largely in response to unification strains, and the German Central Bank has adopted a vigilant anti-inflationary stance to combat price pressures emanating from unification. Unification, which contributed to strong growth in employment and output in the western part of the country, led to sharp declines in employment and output in eastern Germany as it changed overnight from a command to a market-based economy. Much of eastern industry, handicapped by antiquated technology, poor organization, and inadequate infrastructure, was no longer viable. The first step in the transition to a market economy has been a jump from virtually no unemployment to an unemployment rate of more than ten percent. Including short time workers, who retain their jobs but work fewer hours and receive compensatory payments of up to 90 percent of full-time pay, the un- and under-employment rate in eastern Germany is well over 20 percent. It is difficult to accurately measure eastern German GNP, but industrial production is currently only 60 to 65 percent of the third quarter 1990 level. The eastern German economy is widely expected to pick up over the next year, with a growth rate of about ten percent predicted. The massive job of restructuring will take time to accomplish, however, and eastern Germany will likely continue to rely on large transfers from western Germany for many years to come. The west German current account was in surplus by roughly DM 100 billion in 1989 and DM 75 billion in 1990, but is expected to register a deficit of close to DM 30 billion in 1991. The major factor behind this decline was a sharp increase in imports as west German demand surged and east Germans rushed to buy newly available goods from western countries (east German imports coming through west Germany are counted as west German imports in balance of payments statistics). West German exports were flat in 1990, contributing to the current account deficit. Slow growth in industrial countries and diversion of resources to eastern Germany both contributed to the export slowdown. Payments to the United States for the Gulf War also added to the current account deficit in 1991. Higher growth rates in Germany's western trading partners in 1992 should help raise German export levels in 1992, and the current account is expected to be in near balance as well. |