French cancellations problematic for bilateral trade

By Zev Stub & Sigalit Shachor
Jerusalem Post
23 May 2002

When yet another French client cancelled sales from plastic films manufacturer Polyon Barkai Industries recently, marketing manager Haim Levy wrote an open letter to the French media.

Levy mobilized Kibbutz Barkai’s 500 members to bombard French media channels with the letter, which can be found on the company’s site, and Levy expects will be published shortly in Le Figaro.

“When I see such bias in the French media, I understand why there is such discrimination against Israel, and why so many companies are pulling orders,” Levy said. “Our company’s European sales have declined 30 to 40% since September 11, while Asian sales have skyrocketed. Although both markets were equal then, the Asian market is now almost double the European.”

“There is a real problem here,” he added.

Inon Elroy, commercial attache at the Israeli Embassy in France, agreed. “I can’t say that there is not a problem. There is,” said Elroy.

“There’s no doubt that recently, following the tough portrayal of the ‘Israeli Conqueror’ as seen by a biased French media, Israel and Israelis have suffered from this image in the eyes of the French business world and business decisions have been strongly affected,” he said.

Elroy said there has been a significant decrease in economic activities between the two countries. Over the last few years, trade between France and Israel had increased to more than $2 billion. However, the balance of trade was heavily skewed in France’s favor, with only about 36% of products coming from Israeli producers, and the percentage declining each year.

According to the Central Bureau of Statistics’ foreign trade report published this week, exports to the EU, the country’s leading trading partner, fell 7.2% from the beginning of the year, to $1.9b. for the first four months. Exports to France were $213.6m. during the period, while imports were $376.9m. Declines from the same period last year were 17% and 13%, respectively.

With many European companies cancelling orders from Israeli trading partners, Levy said they tend to use one of three types of excuses. “We have distributors who will tell us their clients don’t want to buy Israeli products. Other companies tell us straight out, ‘We won’t buy Israeli.’ The rest blame the cancellation on the economic difficulties in Europe.”

Elroy notes that the problem is not only ideological. “Senior businessmen prefer not to take risks in uncertain situations or invest money in unstable countries. If they have a choice between two similar products from Israel or, let’s say, Singapore, they’d prefer Singapore. Their assumption is that in a time of war economic activities and production are paralyzed.”

Levy does not believe that cancelled orders are inevitable, however. “I am friends with a businessman in France who has never bought from me,” he said. “One day, I spent four hours with him explaining the situation here. The next week, I received a nice-sized order from his company.”