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

By Michel Rose and John Irish

PARIS, Nov 25 (Reuters) – French President Emmanuel
Macron will be hosted by U.S. President Joe Biden next week in a
rare state visit aimed at highlighting Franco-American
friendship rather than the bitter economic competition between
the two sides of the pond.

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

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

Macron will try to convince the United States it is in their
interest not to weaken European companies at a time Western
allies are facing intense economic competition from China, which
they say uses its economic might as diplomatic leverage.

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

The French leader will try to negotiate exemptions for
European companies on the model of those Mexico and Canada has
already got, a French presidential adviser said.

German carmakers, for which the U.S. is a big export market,
are among the biggest victims of the IRA package which subsides
U.S.-made electric cars, the French presidential said. French
carmakers do not export to the U.S. but France has major car
parts suppliers, which would be affected.

Energy issues will also feature prominently in the 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 ageing plants.

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

Macron will also travel to Louisiana, ostensibly to pay
tribute to the state’s French heritage, but also to discuss
energy issues, the French presidential advisor said.

French oil giant TotalEnergies owns a big
liquefied natural gas terminal in the state on the Gulf of
Mexico and Macron, who has complained about the high price of
U.S. gas exports, said he will bring up the issue with Biden.

“The United States produce cheap gas but sell it to us at
high price,” Macron told French executives on November 8. “And
on top of that they have massive subsidies in some sectors that
make our projects uncompetitive.”

“I think that’s unfriendly and I will go to Washington in a
spirit of friendship at the end of the month… to simply plead
for a level playing field,” he said.
(Reporting by Michel Rose; additional reporting by John Irish
and Elizabeth Pineau; editing by Philippa Fletcher)