	Overview

U.S. commercial ties with France are extensive, mutually profitable, and growing. Each country has an increasingly large stake in the health and openness of the other's economy. In the case of merchandise trade, France is the 8 th largest trading partner for the United States and the United States is France's largest trading partner outside the European Union. In 2008, $42 billion or 57% of bilateral trade occurred in major industries such as aerospace, pharmaceuticals, medical and scientific equipment, electrical machinery, and plastics where both countries export and import similar products (see Table A-3 and Table A-4 in the Appendix ). The United States and France also have a large and growing trade in services such as tourism, education, finance, insurance, and other professional services. These amounts make France the sixth largest market for U.S. exports of services and the seventh largest provider of services to the United States. Investment Ties

While trade in goods and services receives most of the attention in terms of U.S.-France commercial ties, foreign direct investment and the activities of foreign affiliates can be viewed as the backbone of the commercial relationship. Compared to trade flows, the scale of commercial activities of U.S.-owned companies operating in France and French-owned companies operating in the United States outweighs trade flows by a factor of almost five . The combined U.S.-French annual $494.9 billion sales figure translates into over $1.35 billion in commercial transactions taking place every day of the year. In the case of foreign direct investment, France in 2006 was the eleventh largest host country for overall U.S. foreign direct investment and the United States was the number one foreign investor with investments valued at $65.9 billion (historical cost basis). During the same year, French companies had direct investments in the United States totaling $147 billion (valued on a historical cost basis), making France the fifth largest foreign investor in the United States in stock terms (see Table A-6 ). Most U.S. trade and investment with France, dominated by multinational companies and intra-firm trade, is non-controversial. Nevertheless, three prominent issues—agriculture, government intervention in corporate activity, and the war in Iraq—have contributed to increased bilateral tensions from time to time. Specific concerns that divisions over Iraq could spill over into the trade arena arose in early 2003 with reports of U.S. consumer boycotts of French goods and calls from some U.S. lawmakers for trade retaliation against France (and Germany). The spike in bilateral tensions and hard feelings, however, appears not to have had much impact on sales of the products—such as wines, perfumes, handbags, and cheeses—most prone to being boycotted. Effective boycotts would jeopardize thousands of jobs on both sides of the Atlantic.
U.S. commercial ties with France are extensive, mutually profitable, and growing. With over $1.35 billion in commercial transactions taking place between the two countries every day of the year, each country has an increasingly large stake in the health and openness of the other's economy.
France is the eighth largest merchandise trading partner for the United States and the United States is France's largest trading partner outside the European Union. More than half of bilateral trade occurs in major industries such as aerospace, pharmaceuticals, medical and scientific equipment, electrical machinery, and plastics where both countries export and import similar products.
The United States and France also have a large and growing trade in services such as tourism, education, finance, insurance and other professional services. In recent years, France has been the sixth largest market for U.S. exports of services.
Although trade in goods and services receive most of the attention in terms of the commercial relationship, foreign direct investment and the activities of foreign affiliates can be viewed as the backbone of the commercial relationship. The scale of sales of French-owned companies operating in the United States and U.S.-owned companies operating in France outweighs trade transactions by a factor of four and five, respectively.
In 2007, France was the thirteenth largest host country for U.S. foreign direct investment abroad and the United States with investments valued at $68.5 billion was the number one foreign investor in France. During that same year, French companies had direct investments in the United States totaling $169 billion (historical cost basis), making France the sixth largest investor in the United States. French-owned companies employed some 497,000 workers in the United States in 2006 compared to 651,500 employees of U.S. companies invested in France.
Most U.S. trade and investment transactions with France, dominated by multinational companies, are non-controversial. Nevertheless, three prominent issues—agriculture, government intervention in corporate activity, and the war in Iraq—have contributed periodically to increased bilateral tensions. The most pointed perhaps arose in early 2003 with reports of U.S. consumer boycotts of French goods and calls from some Members of Congress for trade retaliation against France (and Germany) due to foreign policy differences over the Iraq War.
The foreign policy dispute, however, appears not to have had much impact on sales of products such as French wines, perfumes and toiletries, travel goods and handbags, and cheeses that are most prone to being boycotted. While some public opinion polls at the time suggested support for economic boycotts as a way of expressing opposition to France's position on Iraq, an economic backlash appears not to have materialized. Effective boycotts would jeopardize thousands of jobs on both sides of the Atlantic. This report will be updated as needed. See also its companion report, CRS Report RL32464, France: Factors Shaping Foreign Policy, and Issues in U.S.-French Relations, by [author name scrubbed].