Country-of-Origin Labels: Does European Regulation Reinforce Reputation?

This brings to mind the old line about having five Europeans in a debate means at least eight points of view are represented. Global trade has caused companies to rethink what they are. Nationality? When it suits them. European? Up to a point. Global? Depends on what markets look attractive and an assessment of the tax advantages.

Country of origin labeling used to be a brand equity decision. Businesses in France, Germany, Italy and, of course, many others (who could forget Belgian chocolates)took pride in the reputational benefits that accrued from that association. But with cost driving the manufacturing equation and many national brands now being owned by others or made in export platforms, the label have been degraded. While an Italian textile company or French fashion house may still connote quality and exclusivity, the Made in Sri Lanka or Romania or wherever label raises uncomfortable questions about the company's priorities, its dedication to craft, compliance with work rules - and the fairness of their pricing.

By insisting on country of origin labels, the EU may be trying to protect companies still manufacturing within the Union's borders, but they have succeeded in raising much more profound questions about what it means - and does not mean - to be a good global citizen. JL

John Miller reports in the Wall Street Journal:

"A proposal that would force companies to slap "Made in" labels on billions of euros in goods sold in the European Union has split the bloc's southern manufacturing base from big, mostly northern, multinational companies that sell items imported from abroad. Trade experts say the idea's popularity in the EU—it has been approved by the EU Parliament and the European Commission—reflects concerns over a struggling economy and losing jobs to foreign competition.

"It's all about making it fair for European companies still making their goods in Europe," says Michele Tronconi, CEO of an Italian textile finisher.

It is odd that the heavily regulated EU doesn't already have country-of-origin labeling. Similar tags are mandated around the world, including in Japan and China, as a way to help domestic producers compete against foreign manufacturers.