Europe’s Emerging Commodities Mantra

It’s funny how the simple act of opening your e-mail can have a profound effect on your view of the world’s economic landscape.

Recently, I received a press release from South Korean tire manufacturer Hankook Tire Co. Ltd., which touted a deal with Volkswagen to outfit several of its vehicles with Hankook tires right out of the assembly plant. What really caught my eye was the “Made in Europe” tag used in the release. (Hankook has a production facility in Hungary.) That quotation led me to google Hankook's past press releases and, as far as I can tell, the company began using the “Made in Europe” hook about two years ago.

So what does “Made in Europe” really mean? The World Trade Organization's (WTO) General Agreement on Tariffs and Trade (GATT) determines that “...each contracting party was free to determine its own origin rules...,” but that's not what’s tickling my skull. What I find more interesting is the use of country of origin (COO) labeling as a marketing tool, the general public’s perception of what those labels mean to them personally, and how manufacturers' and retailers’ use of COOs shifts in relation to consumers’ perception of their country’s status as an exporter at any given time.

Back in the day, U.S. manufacturers put “Made in America” on their products to intimate a high-quality product. That was, of course, back in the day when America was a major exporter of product.

Currently, “Made in China” seems the most likely label you’ll see. Although that label is usually associated with high-quantity, low-quality products, Chinese manufacturers don't appear to have any shortage in demand for their product. Looks like most of us don't seem to care that something is “Made in China.”

Apparently H. James Harrington in his column “China: A Call to Action,” isn't the only one to recognize the value of competing in the global marketplace by delineating one's product as high quality vs. low priced. More than one European company now uses country of origin labeling and marketing to do just that, and—surprise, surprise—U.S. auto manufacturers have been successfully pushing that strategy for a number of years now.

These simple observations caused my light bulb of cognitive reasoning to flicker, and now when I see that COO label being used, I think a little more about why it’s there. Is it there due to regulatory demands? Is it there because a country’s industrial sector can’t compete in volume and is looking for a different marketing angle? Has a corporation invested the requisite research, engineering, capital, and employee training to manufacture a product so high in quality they feel it warrants distinguished status? And what does it all mean to consumers?

To the extent that international manufacturers take to heart true quality, lean business strategies, and ethical practices, I believe there will be a growing worldwide demand for their products, and high quality will be able to compete with mere low cost... no matter what the label says.   

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