france can't seal the deal

When Fench president Nicolas ­Sarkozy dines with Barack Obama at the White House this week, expect the smiles to be strained. A pair of multibillion-dollar military-­procurement disputes have marred relations in recent weeks. When Northrop Grumman, in partnership with European aerospace firm EADS, charged favoritism for Boeing and withdrew its bid for a $35 billion Pentagon contract, Sarkozy accused the U.S. of "protectionism." Meanwhile, Sarkozy's recent decision to sell Mistral assault ships to Russia has made Washington and NATO allies nervous.

Don't be surprised if it seems as though Paris is putting economics ahead of smooth relations with America. France is unusually reliant on big global contracts, thanks to an economy heavily dependent on a stable of world-class firms with tight historical links to the state. The president is expected to help these companies strike deals, meaning that setbacks aren't just economic--they're political. With France's trademark brands on a losing streak--French companies lost high-speed train deals in China and a ­nuclear-reactor contract in Abu Dhabi last year--and Sarkozy hurting at the polls, he can score more points protecting industry than friendships. Indeed, standing up to a U.S. president can't hurt at home. Even if it makes for awkward dinner conversation at the White House.

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