France trumpeted business successes during a trip by President Nicolas Sarkozy to Morocco on Tuesday, but a post mortem has already begun into how Paris was snubbed over a major fighter order, defence analysts said.
In a surprise blow to France's standing in the region, industry sources said Morocco had cancelled interest in French Rafale combat jets and opted for cheaper F-16s from the United States, casting a pall over Sarkozy's first visit as president.
After losing out on key deals in Asia, France had been banking on its former colony as the first export buyer for the successor to the Mirage -- an emblem of its standalone defence ambitions developed and produced at a cost of 28 billion euros ($39.79 billion).
Instead, Sarkozy's trip yielded rail, frigate and nuclear deals, some assembled hurriedly to remove the sting of defeat on the strategic fighter deal in France's diplomatic backyard.
French officials played up the value of the haul of deals, but commentators and defence industry sources presented them as a weak consolation prize for the loss of the Rafale order.
"A French frigate shoots down 18 Rafales...assisted by a high-speed train," quipped Secret Defense, a blog operated by defence specialist Jean-Dominique Merchet of daily Liberation.
Standing in the firing line as an informal inquest gets under way is France's defence procurement and export agency, DGA, which handled the government-to-government negotiations on behalf of the Rafale's manufacturer Dassault Aviation.
Many also blame the French economy ministry for dithering over financing before French elections in April and May, a period in which decision-making on sensitive matters gums up.
"It was impossible to lose this contract, and they did," said a defence industry source, asking not to be identified.
The DGA was not available for comment.
Dassault Aviation declined to comment on the talks.
OUR MAN IN RABAT
Industry sources said the DGA had undercut Dassault by 300 million euros on the price of the multirole Rafales and complicated talks by widening them to frigates and helicopters.
Specialist IntelligenceOnline.fr said the deal was bungled because France lacked a single dedicated coordinator in Rabat.
Morocco ended up buying one Franco-Italian FREMM frigate but that deal is seen worth much less than the 2 billion euros estimated price of the lost Rafale contract including support.
French defence analysts fear cost in sacrificed prestige and diminished sphere of influence may be higher.
Despite a thaw in French-U.S. relations that had been strained by then President Jacques Chirac's opposition to the war in Iraq, competition for defence deals is as fierce as ever.
"There is no equipment in which as much strategic sovereign technology is as concentrated as in a combat aircraft," said a French defence industry analyst, asking not to be named.
France will be hoping to shake off the loss of pride as it pitches the Rafale in a much larger race to sell fighter jets to India. France, the United States, Russia, Sweden and the European Eurofighter consortium all eagerly want the order.
France is the world's number three arms exporter, according to Britain's International Institute for Strategic Studies.
Sensing disarray in the French camp and a chance to boost its role as middleman in the region, the United States stepped in during the summer with a competitive offer for Lockheed F16s, according to several specialist French media reports.
Washington also granted $698 million in aid in September.
Lockheed declined comment.
A U.S. State Department official said: "The State Department cannot comment until there has been notification to Congress."
As hopes for the Rafale fell apart ahead of Sarkozy's visit to Morocco, strains began to show on the French side as Defence Minister Herve Morin criticised the Rafale as elaborate and costly, angering contractors. But by then the race was over.
By Tuesday, Morin was focusing on wider lapses in procedures for handling France's 6 billion euro annual arms sales.
"I realised when I arrived at the ministry (in May) the extent to which we need a strategic plan for exports," he said.
"We need one place where decisions can be made quickly."
Asked whether it was this which had sunk the Rafale deal, he said: "It was a mixture of everything. It's a big programme." (Additional reporting by Sue Pleming, Bill Rigby)
