03 August 2006
The Minister for Economic Development, Senator Philip Ozouf is today releasing a report assessing the likely economic benefit to the Island of increasing trade with France. The report concludes that it is unlikely to be in the economic interests of the Island for the States to subsidise a freight ferry to France, but that business and cultural relationships should be encouraged and grown so that the market can more easily respond to any opportunities that exist now, or that will emerge in the future.
At a high level the report, compiled by independent economic advisers Oxera, looks at whether there is any evidence of market failures which currently prevent increased trade with France and which, if addressed, could result in economic benefits for the Island. The general findings are that increasing trade with France is not a panacea for the Jersey economy, but that there could be some economic benefits from helping businesses identify new opportunities.
The report explores two key channels for potential economic benefit through increased trade with France: lower ferry transport costs and lower priced goods. It concludes that permanently subsidising an additional freight ferry to France, or re-directing some of the UK-Jersey freight routes to France-Jersey is unlikely to return economic benefit to the Island. The report confirms that whilst goods can often be bought cheaper in France, there are considerations, such as fluctuating exchange rates, additional costs incurred in Jersey and additional transport costs, which mean that this would not necessarily translate into cheaper prices in Jersey’s shops if trade links were redirected to France. Where the report finds scope for investment by the States, is in forging ever stronger links between France and Jersey where business and cultural exchanges are concerned and helping identify current trading opportunities.
The States is already involved in developing closer links with Brittany and Normandy. The Chief Minister’s Department has established a number of working groups who have met to explore opportunities for tourism, trade, cultural and educational initiatives and environmental cooperation.
Minister for Economic Development, Senator Philip Ozouf commented: “This report explains the facts behind the existing levels of trade with France. The message coming from it is clear; we should not be putting money into subsidising a freight ferry, we should be using our energy to develop our relationships with France. The role of government is to create the right conditions so that individuals and businesses can flourish, we will do this by strengthening existing relationships and developing new ones. I will be asking my department to consider these conclusions in detail. We will reappraise what we are doing and adjust as appropriate.”
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Notes to Editors:
1. A press briefing will be held on Friday 4 August at 0830.
2. For further information, please contact Senator Philip Ozouf: 07797713838 or Dougie Peedle: 440446 (d.peedle@gov.je). For technical questions please contact Fod Barnes from Oxera between 11-12 on Friday 4 August on 01865 253 048 (Fod.Barnes@oxera.com)
3. For a discussion of the findings please see the summary paper attached to this news release. A copy of both the summary and complete report are available from http://www.gov.je/ or by using the link at the bottom of this page.
4. Market Failure: where the market mechanism alone does not deliver economic efficiency and there is therefore scope for government intervention.
Please click on the link below to access the aforementioned reports
Increased Trade with France Summary and Technical Report
gov.je