La réforme de la réglementation en France: Renforcer l’ouverture du marché à travers la réforme de la réglementation[Regulatory Reform and Market Openness in France]

As traditional barriers to trade have fallen, the impact of domestic regulations on international trade and investment has become more apparent than ever before. While regulations aim at improving the functioning of market economies in a range of fields, such as market competition, business conduct, the labour market, consumer protection, public health and safety or the environment, they may directly or indirectly distort international competition and prevent market participants from taking full advantage of competitive markets. Maintaining an open world trading system requires regulation that promotes global competition and economic integration, thereby avoiding trade disputes and improving trust and mutual confidence across borders. This chapter assesses how the French regulatory system performs from these perspectives and how regulatory reform may contribute to enhancing market openness and the benefits which consumers and producers can reap from open markets. From the perspective of opening the market to international competition, the French record is on the whole positive. The French government and administration have gradually distanced themselves from the interventionist and paternalistic tradition of the State and have committed themselves to developing a regulatory framework supportive of sound market functioning. Nevertheless, there are still some shortcomings in terms of achieving a market-friendly regulatory environment, and these need to be addressed for the country to retain benefits from the progress achieved to date. Available evidence shows that the principles of favouring harmonised standards and of streamlining conformity assessment procedures are widely respected in practice, in particular under the influence of EU and WTO disciplines. Observance of competition principles also offers sound guarantees for the international openness of the French market, and the telecommunications sector offers a good example of such successful opening to competition. In sectors where incumbents still dominate the market, like in the electricity and gas sectors, the role of incumbents will be soon modified owing to the liberalisation of the European market. With respect to the other principles underlying market openness, a number of official or unofficial steps in the right direction have recently been taken. The principles relating to transparency and openness of the decision-making process are also well respected. Prior consultation with interested parties is becoming normal practice with the French administration, although the openness of the decision making process could be improved if such consultation were put on a formal and systematic basis. The principle of nondiscrimination is generally observed in regulatory practices, although a number of exceptions persist. From the viewpoint of market openness, the major weakness in the French regulatory framework has long been the cumbersome rigidity of a system that generated unnecessary restrictions on trade and was regularly criticized by economic players. A number of measures have been taken in recent years to improve and simplify the regulatory framework, and still others are in the course of preparation. These measures are likely to improve the quality of regulation and to create a regulatory environment supportive of market openness, but they are still handicapped to some extent by the persistence of old practices within the administration and the climate of mistrust that has long existed between the administration and the business world. The effectiveness of measures under way can only be assessed in the long term, but France will need to ensure that adopted plans of action translate into concrete changes in the day-to-day workings of government and backed up with communication efforts directed at the business community.