Benjamin Grange, Senior Partner at Mascaret (formerly Dentsu Consulting) published an article in Forbes France on July 19, 2022. It deals with the relationship between economic sovereignty and economic competition.
Indeed, while there is talk of de-globalization, the economic sovereignty of States is increasingly interfering in the game of free competition.
A concept that is increasingly in vogue at a time when there is talk of de-globalization, sovereignty interferes in the game of free competition by creating one more uncertainty for economic actors.
In a world where economic competition is the norm, the game of pure and perfect competition is sometimes deviated by tacit or implicit practices that distort the competitive game to an extent that harms a country’s economy, its sovereignty or the security of its population. Let’s take the start-up XYZ, which excels in advanced technology (space, quantum, cybersecurity, biotechnology, etc.). It is currently seeking more than €100M. Several non-European funds are approaching it with, beyond financing, a desire to recover the technology. Under the guise of financing, it is in fact an act of economic predation, often characterized after the fact.
In another register, since the end of the 1990s, we have witnessed a proliferation of laws with extraterritorial scope, particularly of American origin. The “Discovery” procedure offers any party to a legal action brought before a non-US court the possibility of obtaining from the US judge the forced production of evidence held by any party on US territory, provided that the evidence in question is intended to be used for the purposes of the foreign proceedings. This is all it takes to serve as a lever of economic intelligence by requesting the production of all or part of documents or information normally protected by business secrecy. This abuse of extraterritorial laws has become an instrument of American foreign policy, and has grown in scope since 2001. Of the 26 companies condemned: 14 European and 5 French. No Chinese or Russian companies were convicted.
A French car manufacturer that sold nearly 450,000 vehicles in Iran yielded to the injunction of the Trump administration, which threatened retaliation against foreign companies doing business with Tehran, namely financial sanctions and eviction from the American market.
We can therefore understand the emergence of the concept of industrial and technological sovereignty. Close to economic security, it is defined as the materialization of a state policy aimed at protecting and promoting the strategic interests of a nation. Used very widely, even too much so since the beginning of de-globalization, it brings together the activities of protection of heritage, delimitation of critical industrial and technological perimeters and the fight against foreign economic intelligence activities. This is the difficulty linked to the subject of sovereignty. At what point does free competition stop and at what point does the act of economic predation that requires action begin? For the moment, it remains a question of national interpretation and of the regalian state of mind at the time the situation arises. The stronger the national feeling or the higher the interdependence with other countries, the more acute the will of a country to intervene, to discourage a priori or to block a posteriori. Without a common definition in Europe, and without really public doctrines of national intervention, the framework of action given to economic actors remains uncertain, generating a risk for those who want to act without offending, to deploy themselves serenely. This is one more uncertainty at a time when we are talking about de-globalization.
Benjamin GRANGE
