By Horst Widmann
Published: September 8 2008 12:23 Last updated: September 8 2008 12:23
In the coming weeks Brussels will have to decide whether it wants to reopen the bitter and divisive debate on trade defence that has been a recurring feature of recent years. By launching a review of anti-dumping duties on shoes from China and Vietnam, Europe will be putting off a long overdue departure from an outdated vision of global trade. Prolonging the shelf-life of ill-conceived policies in the name of protecting European industry demonstrates a complete disregard for economic reality. Protectionism in the name of protection makes no sense at all.
The shoe industry is not the only sector under the European Union’s spotlight. However, the footwear case neatly illustrates the dilemma faced by all European companies doing business on a global scale.
Operating between Europe and emerging markets presents both abundant opportunities and formidable challenges. The EU’s ability to compete will be conditioned by the way in which it responds to those challenges. It is clear that bringing down long-standing barriers to free trade better serves the interests of European businesses and consumers than erecting new ones.
This is not to underestimate the might of the emerging economies – China, for one, has undergone a staggering evolution over the past few decades. But to assume that one region’s economic success comes at the expense of another’s is a fallacy.
China’s rapid economic development certainly would not have been possible without the steady dismantling of barriers to international trade and investment that characterises today’s global economy.
The fortunes of the European footwear industry have been intimately linked to China’s economic surge and have contributed to the country’s transformation. At the same time, our industry and our employees have been among its main beneficiaries while European consumers have enjoyed an ever-widening choice of products at increasingly favourable prices.
The footwear industry is a prime example of how modern European businesses, big and small, position themselves between Asia and Europe to succeed. On the one hand, they expand their capacity in Europe to excel in product research and development, marketing, distribution, advertising, retailing and global corporate strategy. On the other hand, they invest in efficient global production and supply chains to deliver affordable goods to consumers both in Europe and in the rapidly expanding consumer markets in emerging economies, not least China.
Other parts of our industry have specialised in the production in Europe of such high-technology or high-quality products that they can compete internationally despite competitive pressures from Asia and other emerging markets.
For Europe to be globally competitive, its industry needs to find ways to harness the benefits of the Asian miracle. The European footwear industry identified this imperative more than 20 years ago. As a result, our brands are among the most successful in the world. Today, our companies are global market leaders which have consistently increased their investment in quality, high added-value jobs in Europe. This is not despite our engagement in China, but because of it.
It is wrong, therefore, to pose the choices facing many companies and industries as a strategic dilemma between “Europe or China”. They will need both in a partnership of solid mutual interest.
Peter Mandelson, the EU trade commissioner, said in a recent speech that “there is no longer a drawbridge to lift up between ‘them’ and ‘us’.” Indeed, Europe and China are now better placed than ever before to secure the huge opportunities and benefits that are within our grasp.
For Europe to continue delivering jobs and innovation and give consumers access to the quality, choice and prices they deserve, EU policymakers have to draw the right conclusions from China’s growth and success. In the footwear sector, and elsewhere, this means finally letting go of some archaic notions about how successful businesses operate and compete in today’s world.
The first misconception is that European companies only compete against Chinese or other foreign companies. Our brands, many of them European, compete with each other – in all markets across the globe – but we all depend on suppliers in China and their highly developed production know-how. This is a fact of global competition.
The second myth is that production in China occurs at the expense of production in Europe. Indeed, whenever manufacturing is outsourced to other parts of the world, it is Europe that creates product value, from research & development and design to marketing, distribution, retailing and advertising. These activities generate investment at home, growth in quality employment and cutting-edge technology embodied in footwear products that meet the expectations of the modern consumer.
Equally false as the idea that offshore production is a zero-sum game is the notion that China produces only for Europe and America. China’s 1.3bn people do not only produce, they also consume. And they consume more every day. European manufacturers with a presence in China have direct access to the most important consumer market of the future. Investment in China adds strength to the European economy rather than weakening it.
As the prospects for global and European economic growth become increasingly dependent on the continued success of the Chinese economy, Europe needs to build on its strengths and make China’s success its own. Above all we must avoid falling into the “us versus them” trap. It is the responsibility of policymakers, business leaders and decision makers to communicate to citizens the growing interdependencies in today’s world economy and what they mean for Europe’s own interests.
The writer is president of the Federation of the European Sporting Goods Industry and vice president of Puma. He is supported by Adidas Group, Asics, Nike and Timberland.
Published: September 8 2008 12:23 Last updated: September 8 2008 12:23
In the coming weeks Brussels will have to decide whether it wants to reopen the bitter and divisive debate on trade defence that has been a recurring feature of recent years. By launching a review of anti-dumping duties on shoes from China and Vietnam, Europe will be putting off a long overdue departure from an outdated vision of global trade. Prolonging the shelf-life of ill-conceived policies in the name of protecting European industry demonstrates a complete disregard for economic reality. Protectionism in the name of protection makes no sense at all.
The shoe industry is not the only sector under the European Union’s spotlight. However, the footwear case neatly illustrates the dilemma faced by all European companies doing business on a global scale.
Operating between Europe and emerging markets presents both abundant opportunities and formidable challenges. The EU’s ability to compete will be conditioned by the way in which it responds to those challenges. It is clear that bringing down long-standing barriers to free trade better serves the interests of European businesses and consumers than erecting new ones.
This is not to underestimate the might of the emerging economies – China, for one, has undergone a staggering evolution over the past few decades. But to assume that one region’s economic success comes at the expense of another’s is a fallacy.
China’s rapid economic development certainly would not have been possible without the steady dismantling of barriers to international trade and investment that characterises today’s global economy.
The fortunes of the European footwear industry have been intimately linked to China’s economic surge and have contributed to the country’s transformation. At the same time, our industry and our employees have been among its main beneficiaries while European consumers have enjoyed an ever-widening choice of products at increasingly favourable prices.
The footwear industry is a prime example of how modern European businesses, big and small, position themselves between Asia and Europe to succeed. On the one hand, they expand their capacity in Europe to excel in product research and development, marketing, distribution, advertising, retailing and global corporate strategy. On the other hand, they invest in efficient global production and supply chains to deliver affordable goods to consumers both in Europe and in the rapidly expanding consumer markets in emerging economies, not least China.
Other parts of our industry have specialised in the production in Europe of such high-technology or high-quality products that they can compete internationally despite competitive pressures from Asia and other emerging markets.
For Europe to be globally competitive, its industry needs to find ways to harness the benefits of the Asian miracle. The European footwear industry identified this imperative more than 20 years ago. As a result, our brands are among the most successful in the world. Today, our companies are global market leaders which have consistently increased their investment in quality, high added-value jobs in Europe. This is not despite our engagement in China, but because of it.
It is wrong, therefore, to pose the choices facing many companies and industries as a strategic dilemma between “Europe or China”. They will need both in a partnership of solid mutual interest.
Peter Mandelson, the EU trade commissioner, said in a recent speech that “there is no longer a drawbridge to lift up between ‘them’ and ‘us’.” Indeed, Europe and China are now better placed than ever before to secure the huge opportunities and benefits that are within our grasp.
For Europe to continue delivering jobs and innovation and give consumers access to the quality, choice and prices they deserve, EU policymakers have to draw the right conclusions from China’s growth and success. In the footwear sector, and elsewhere, this means finally letting go of some archaic notions about how successful businesses operate and compete in today’s world.
The first misconception is that European companies only compete against Chinese or other foreign companies. Our brands, many of them European, compete with each other – in all markets across the globe – but we all depend on suppliers in China and their highly developed production know-how. This is a fact of global competition.
The second myth is that production in China occurs at the expense of production in Europe. Indeed, whenever manufacturing is outsourced to other parts of the world, it is Europe that creates product value, from research & development and design to marketing, distribution, retailing and advertising. These activities generate investment at home, growth in quality employment and cutting-edge technology embodied in footwear products that meet the expectations of the modern consumer.
Equally false as the idea that offshore production is a zero-sum game is the notion that China produces only for Europe and America. China’s 1.3bn people do not only produce, they also consume. And they consume more every day. European manufacturers with a presence in China have direct access to the most important consumer market of the future. Investment in China adds strength to the European economy rather than weakening it.
As the prospects for global and European economic growth become increasingly dependent on the continued success of the Chinese economy, Europe needs to build on its strengths and make China’s success its own. Above all we must avoid falling into the “us versus them” trap. It is the responsibility of policymakers, business leaders and decision makers to communicate to citizens the growing interdependencies in today’s world economy and what they mean for Europe’s own interests.
The writer is president of the Federation of the European Sporting Goods Industry and vice president of Puma. He is supported by Adidas Group, Asics, Nike and Timberland.
http://www.ft.com/cms/s/0/328f6bce-7d98-11dd-bdbd-000077b07658.html
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