France is one of Russia's top-priority economic partners. Total trade between Russia and France reached $16.4 billion in 2007 and $22.5 billion in 2008. Compared to the same period in 2008, in the first eight months of 2009 the amount of trade decreased by 32.3% due to the global economic downturn, to $9.9 billion. Russian exports decreased by 36.4%, to $5.2 billion, and imports by 27.3%, to $4.7 billion.
By the end of June 2009, the total French investments in the Russian economy reached $9.9 billion, including $2 billion of direct investment, which exceeded the $7.9 billion of U.S. investment for the same year.
Russian exports to France are dominated by energy commodities, chemical and rubber products, metals and metal products, and timber. Russia mostly imports machinery, equipment, chemical products, and food. France ranks 6th among European countries in terms of the volume of imports from Russia.
The most promising areas of bilateral cooperation include the space industry, aviation, energy, telecommunications, automotive and oil industries, agriculture, and housing and utilities.
There are about 470 companies in Russia with French partners. The largest investment projects include:
1) Energy (Total S.A. is involved in the development of the Kharyaginskoye and Stockman deposits);
The French petroleum company Total S.A. has been involved in the development of the Stockman gas field. The French company has contributed much to the development of this project, which is unusual for its technological complexity. To develop the first phase of the 23.7-billion-cubic-meters-per-year Stockman gas field, Stockman Development AG was established in February 2008. Gazprom holds a 51% share in the company, Total S.A. a 25% share, and Norway's StatoilHydro a 24% share.
The company conducts engineering surveys, implements basic engineering projects, prepares feasibility studies and prepares contracts. The French company is involved in the construction of the undersea production unit, offshore platform and LNG plant.
2) Automobile Manufacturing (the Russian-French Avtoframos company manufactures automobiles at a factory in Moscow; Renault supports Russia's AvtoVAZ, in which it holds a 25% stake; Peugeot Citroen is constructing an automobile factory in the Kaluga Region);
At the first stage of the Avtoframos project, the French investments totalled 250 million euros. Despite a decrease in sales caused by the economic downturn, the company is completing the construction of a new assembly line, which will expand the Renault lineup and increase the plant's capacity to 160,000 cars per year. At this stage, an additional 150 million will be invested in the factory.
In the Kaluga Region, France's Peugeot-Citroen is constructing a factory to assemble Citroen-C, Peugeot-307 and Peugeot-4007 automobiles. The factory's projected capacity is 150,000 automobiles per year, and total investment will be 300 million euros. Construction began in June 2008 and is expected to begin operations in 2010 or 2011.
3) Pharmaceuticals (France's Servier opened a pharmaceutical plant in the Moscow Region);
4) The food industry (Danone produces fermented milk products at its plants in the Moscow and Samara Regions; Bonduelle Groupe produces canned vegetables in the Krasnodar Territory);
5) Nuclear engineering (the Alstom-Energomash joint venture manufactures slow-speed turbines for nuclear power plants);
6) Vehicle engineering (Alstom has a stake in Transmashholding and is involved in a project to build railway cars);
7) The chemical industry (Air Liquide produces industrial liquefied gases in cooperation with Russia's Severstal in the Vologda Region, and with Alabuga in Tatarstan);
8) Transport.
France's VINCI Concessions, which is included in the North-Western Concession Company consortium, is constructing the first section of the Moscow-St. Petersburg highway (from the 15th to the 58th kilometres). The North-Western Concession Company and the Federal Road Agency signed a concession agreement on July 27, 2009 in Moscow.
Leading French construction companies Vinci and Bouygues took part in tenders to build two toll highways, namely the St. Petersburg Western High-Speed Beltway and a highway bypassing Odintsovo in the Moscow Region.
Projects to build high-speed railways are a top priority. France's SNCF International is planning to take part in the tender to provide high-speed passenger service on the existing Moscow-St. Petersburg railway.
Russia and France have developed extensive scientific and technical cooperation. The two countries have been developing ties in physics, mathematics, chemistry, biology, aerospace industry, energy, oceanography, IT and science and technical information.
The first intergovernmental agreement regarding cooperation in space exploration for peaceful purposes was signed in 1966, during French President Charles de Gaulle's visit to the Soviet Union. He also visited the Baikonur Space Center.
At present, the Soyuz at Kourou project at the Guiana Space Centre is the flagship of Russian-French cooperation in space exploration. The total value of the project is 344 million euros, including 121 million from Russia. There will be no fewer than 50 commercial launches of Soyuz-ST launch vehicles within 15 years, with four launches per year. Ninety percent of the above-ground equipment has been assembled. One hundred and thirty Russian specialists were provided with housing and medical services. The first launch is planned for next summer.
Since 2004, the Federal Space Agency and France's National Centre for Space Studies have been working on the Ural program to develop a piloted transport system and the launch vehicles of the future.
In 2005, Russia began manufacturing components for the Airbus A320. The first shipments from the Irkutsk Aircraft Plant were dispatched in 2007, and were expected to reach $100 million per year, although orders were scaled back in the middle of 2009. In 2008, the Voronezh Aircraft Plant started manufacturing components for Airbuses. The plant's leadership has been holding talks on expanding the production at the Ulyanovsk-based Aviastar SP plant.
The Helicopters of Russia and the Kamov design bureau have developed a fruitful partnership with France's Turbomeca, using its engines on the Ka-226T and Ka-62.
The Almaz Antey Thomson Broadcast JV has been developing and manufacturing digital TV transmitters to implement the digital TV programme by 2015. Thomson Grass Valley France SA, in cooperation with Almaz Antey Telecommunications, will be developing a joint transmitter.
The body determining the strategy and development of Russian-French trade and economic relations is the Russian-French Commission on Bilateral Cooperation, which operates at the level of prime ministers (established in 1996). In November 2007, the 12th meeting of the Commission took place in Paris. The participants of the 13th meeting of the Commission, which took place in September 2008 in Sochi, signed several important agreements on cooperation in developing energy efficiency and renewable energy sources, exchange programmes for young people, and a framework agreement for the implementation of projects in compliance with Article 6 of the Kyoto Protocol. The Commission's main executive body is the Council on Economic, Financial, Industrial and Trade Issues. The Council's 16th meeting took place in Paris on June 16, 2009.