French Foreign Policy

I wonder if the recent joint French/Chinese naval exercises just before the Taiwanese election weren’t connected to this story.

According to the Taipei Times in November 2003 Taiwan brought a US$600 million legal action against Thomson-CSF (now Thales) which had supplied six Lafayette class frigates to Taiwan in 1991.

The contract for the sale of the vessels had included a “no illegal commissions” clause. The clause made the payments representing a third of the value of the ships which somehow found their way into the hands of state-officials from France and the People’s Republic of China legally payable to Taiwan.

There was also a clause in which the French government had agreed to guarantee the frigates contract financially. This understandably worried the Elysee Palace when the case was filed and which commissioned a legal opinion on the matter.

The report drawn up by the Paris prosecutor’s office and handed over to the Ministry of Justice on Jan. 15 warned that France is financially liable because of a clause in the contract that stipulated that if commissions were found to have been paid the amount should be deducted from the sale price.

The above story shouldn’t be understood as the only reason the French might want to fire shot across Taiwan’s bows. The $600 million at stake is mere chickenfeed when compared with the potential profits selling arms to the People’s Republic of China represent and which France is keen to see go ahead as soon as possible.

Considering exactly which interests were uppermost in the minds of the French government when they decided to carry-out joint exercises with the Chinese Navy is not as important as occasionaly reminding ourselves that French foreign policy actions are never made without an underlying commercial rationale.