In Washington, Macron to seek relief for Europe Inc amid China competition

PARIS – French President Emmanuel Macron will be hosted by US President Joe Biden next week in a rare state visit aimed at highlighting Franco-American friendship rather than bitter economic competition between the two sides of the pond.

More than a year after Washington, London and Canberra torpedoed a major French submarine contract, pushing Franco-US relations to breaking point, the two countries are expecting a show of unity over common threats from Russia and China.

But the elephant in the Oval Room will be the US Inflation Reduction Act (IRA). Europeans say a massive subsidy package to US manufacturers could deal a fatal blow to their industries, which are already suffering from high energy prices due to Russia’s invasion of Ukraine.

Macron will try to convince the United States that it is in its interest not to weaken European companies at a time when Western allies face intense economic competition from China, which he says is using its economic power as diplomatic leverage.

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“The pitch will be: there is obviously a Chinese challenge and we can help others in the EU out of their naivety on this. But you can’t ask us to help China and do an IRA on us,” said a French diplomat. Reuters on condition of anonymity.

The French leader will try to negotiate an exemption for European companies on the model of Mexico and Canada, an adviser to the French president said.

German carmakers, for whom the US is a major export market, are among the biggest victims of the IRA package that cuts US-made electric cars, the French president said. French car makers do not export to the US but France has a large supplier of car parts, which will be affected.

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Energy issues will also feature prominently in talks at the White House, with France hoping to boost nuclear energy cooperation. Macron wants France to build more nuclear reactors but it is struggling with corrosion issues at its aging plants.

French utility EDF has drafted in hundreds of specialized workers, including welders, from US nuclear plant maker Westinghouse to help fix problems at French nuclear plants and avoid power outages in Europe this winter.

Macron will also travel to Louisiana, apparently to pay tribute to the state’s French heritage, but also to discuss energy issues, an adviser to the French president said.

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French oil giant TotalEnergies owns a major liquefied natural gas terminal in the state on the Gulf of Mexico and Macron, who has complained about high prices for US gas exports, said he would raise the issue with Biden.

“The United States produces cheap gas but sells it to us at high prices,” Macron told French officials on November 8. “And on top of that they have massive subsidies in some areas that make our projects uncompetitive.”

“I think it is unethical and I will go to Washington at the end of the month in a spirit of friendship… just to plead for a level playing field,” he said.

(Reporting by Michelle Rose; Additional reporting by John Irish and Elizabeth Pineau; Editing by Philippa Fletcher)

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