Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
..., according to Daniela Schwarzer and Sebastian Dullien the rates will be bad for Portugal and Italy plus economies with low domestic demand (read Germany?). The reason given for this is that Portugal and Italy are in more direct competition with Asian countries.

I was looking at the Spanish Institute for Foreign Trade (ICEX) webpages, which helps SPanish companies wishing to conduct business abroad, and looking at news items pertaining to the leatherworking sector, there was a lot of profiling of North African and Latin American countries. My interpretation of that (backed by some anecdotal evidence from press articles online) is that the Spanish leatherworking industry is dying off, except for high-end, high-quality manufacturing for major brands, and that the low-price range manufacturers are moving their operations abroad in an attempt to cut their labour costs to compete with China.

This is a point that is often made about Germany, but it seems to be true for al of the European productive economy, and it is that cheap labour abroad is forcing european producers to concentrate on high-quality, high-value-added, high-margin, low-volume products. Germany's capital goods are usually the prime example of this, but I think organic food and high-quality leatherworking can also follow the same pattern. There is still room for products made in europe, but they are in niche markets.

In the US, outsourcing seems to have hollowed out entire inductrial sectors to the point that not even the high-end manufacturing or even the design are carried out in the US any longer, just the branding. I am concern about Europe's ability to retain some manufacturing base in the sectors that are now being outsourced, because without contact with manufacturing one quickly loses the expertise necessary for doing the high-end stuff, or the design.

"It's the statue, man, The Statue."

by Carrie (migeru at eurotrib dot com) on Mon Feb 5th, 2007 at 04:42:37 AM EST

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