Leading Article: French interests on the line

FOR ALL France's growing success as a trading nation - in services as well as goods, with a current balance of payments surplus as evidence - the ethos of the country remains hostile to free trade. This is partly because French agriculture, in which half the workforce was employed as recently as 1930, has traditionally been protected from outside competition - and continues to be under the EC's Common Agricultural Policy; partly because free trade is regarded as in some ways an Anglo-American device inherently antipathetic to France's tradition of dirigisme; and partly because the country has no effective consumer lobby.

The big question - for Europe at least - raised by the installation of a centre-right government in Paris is whether its electioneering rhetoric about reasserting French interests vis-a-vis Brussels and Washington is transformed into political action. A rebuff would be certain if the possibility of renegotiating last year's reforms of the CAP, involving substantial cuts in the production of cereals, were to be raised within the Council of Ministers. But it is clearly well within the new government's powers to hold up completion of the long-drawn- out Gatt talks on the liberalisation of world trade.

The impression at yesterday's meeting in Brussels of US and EC negotiators was that the Americans at least were anxious to avert the trade war which small measures and big threats on both sides have seemed to bring nearer. But politicians on the Gaullist right have threatened not just to defend French interests aggressively in any further negotiations, but to seek to unpick last year's crucial agreement on limits to the subsidised production of oilseeds within the EC, and notably in France.

French politicians seem impervious to the argument that France would gain overall from a successful Gatt round that also liberalised services and intellectual property. Yet they will surely not be deaf to all appeals to self-interest. Given the nature of voting within the EC, for example, they cannot afford to alienate both the Germans and the British. From Bonn the new government will be hoping for some sign of solidarity on the monetary front. A cut in German interest rates, to which France's are tied within the Exchange Rate Mechanism, is desperately needed to help to minimise the growing recession. Some reward for giving the Banque de France its intended Bundesbank-like independence would also be appreciated.

The French see themselves as having cleaved to the path of monetary rectitude while Germany, long the model, strayed from it under the pressures of unification. They want some return for their virtue. If they damage Germany's manufacturing sector by triggering a trade war, they will severely damage Franco-German relations.

There are the makings of a closer relationship between the new government's views on the EC and Britain's. Both give a high priority to enlargement. Both are conscious of the importance of strengthening democracy in Eastern Europe. Both are inclined to prefer closer inter- governmental co-operation to any extension of the powers of the European Commission. The British have not been very reliable partners in the past. But they will certainly share German anger if the French torpedo a trade deal. The appointment of Edouard Balladur as prime minister is reassuring. His views on trade - should they prevail - are closer to John Major's than those of the Gaullist party's leader, Jacques Chirac.